Pros and Cons of White Label App Development

Every new technology is often a solution to a problem that has existed for quite a while. When the world went digital, non-tech businesses also faced a problem - how do we build apps for small business with the lowest possible investment? Very soon, white label mobile apps emerged as an attractive solution. However, like any other tech innovation, this one too comes with a lot of benefits as well as limitations. So here’s a detailed guide on the pros and cons of mobile apps white label development.

Table of Content

• What is a white label mobile app?
• Types of white label mobile apps
• White label mobile apps vs custom mobile apps: what’s the difference?
• Pros of white label apps over custom apps
• Cons of white label apps
• Ultimately, should you procure a white label app or build a custom app for your business?

What is a white label mobile app?

A white label mobile app is a generic app built by a company with an intention to resell it to another business that, in turn, can rebrand the app as their own.

The concept of white label apps emerged as a way to develop small business apps with the least possible investment.

That is why white label apps are mostly built for the industry as a whole.

For example, a white label mobile app development company, let’s call it Company A, may build a generic framework of a delivery app for food businesses. Most food businesses require a similar set of features if they decide to launch their own delivery app. So instead of building an app from scratch, they can buy one from Company A, customize it a bit and rebrand it as their own app.

That way, Company A can resell its app framework to multiple businesses and generate more revenue. On the other hand, the business that buys a white label app can have a fully functional app in their own name, without getting into the complex app development process at all.

Many agencies also consider buying white label apps solely for the purpose of reselling these apps to other businesses. These resellers usually have a vast network of software companies that build white label apps and businesses that want to buy such apps.

Types of white label mobile apps

White label mobile apps are sold to businesses in two ways. First, the white label seller sells you the back-end code of the app and provides you with the liberty to write the front-end code.

The main idea behind this white labeling approach is that you, as a client, can have more control over the design and UI of your app. But then again, this can’t be considered a fully white label solution as you anyway will have to invest time and resources into building the front-end of the app.

Alternatively, a seller can sell you a complete mobile app solution with both back-end and front-end. They do leave a little scope for you to replace the branding elements on the front-end with your own brand identity. However, this approach will leave you with very little flexibility in terms of customization and scalability.

White label mobile apps vs custom mobile apps: what’s the difference?

As I explained above, a white label is a ready-made solution prebuilt for businesses in an industry. You just have to rebrand it and position it in the market as if you have created it. For that reason, white label apps may or may not cater to all the unique needs of your business particularly.

On the other hand, a custom mobile app is an app developed specifically for your business, keeping all your unique requirements and your target audience in mind. You could either build the app in-house or you could hire a reliable mobile app development company to do the job.

So acquiring a white label app and building a custom app for your business are two entirely different approaches to getting an app in your business name. Both these approaches have their own pros and cons, and they cater to different types of needs of the businesses.

Pros of white label apps over custom apps

Now let’s understand how white label apps became such a success in a short span. Check out these top advantages of white label apps:

Cost-efficiency

The biggest advantage of white label apps is their cost-efficiency. In most cases, buying a ready-made app solution costs you much less compared to building a custom app.

When you want to build a custom app, you have to hire designers, developers, project managers, etc. in house. Or, you have to outsource app development to a software agency that will build your app from scratch.

In both these cases, the app development process requires considerable research, unique design, efficient development, and extensive testing. Each phase of development, when carried out exclusively for one app, is very cost-intensive.

On the other hand, white label app development companies sell their apps to multiple businesses. So they don’t charge you for the entire app development cost but only a small part of it.

No involvement in the project management process

Cost efficiency in itself is a great advantage of using a white label app. But you know what’s even better? Your business doesn’t have to worry about the development process at all!

Imagine you hire an app development company to build your custom app. You will have to make efforts to understand how they work, how they manage projects. Someone from your in-house team will consistently track the progress, raise issues, communicate with the project management team et al.

But when you buy a ready-made white label app from a reliable seller, you don’t even have to worry about the project management process at all. In fact, they might already have a proven solution readily available for your business.

Readily available solutions

They say luck is when opportunity meets preparation. The business ecosystem is rapidly evolving and you never know when other businesses take yours over with their modern solutions.

The day you decide to build a custom app and the day you actually launch could be months or even a year apart.

App development is a complex task with a number of phases involved in the process. While you are getting the app built, your competitors may have already bagged their first thousand downloads or so.

To eliminate the risks of lagging behind, businesses decide to procure white label apps instead. The app is already prebuilt, you just need to buy it and customize it a little to position it under your business name. This reduces time to market manifolds.

Free from maintenance complications

In the case of white labeling, the sellers generally host the apps on their own servers. The buyer gets a functioning app but doesn’t have full access to the back-end source code.

While this approach has its own disadvantages, a clear advantage here is that headache to maintain the app is not yours to bear.

These white label app sellers usually have a dedicated team of developers and QA experts that keep tracking the app’s performance. If there are any technical glitches, you can just let the seller know and their team will take care of the rest.

On the contrary, a custom app is yours and only yours to maintain. Having incurred so much time and money on building the app, you have to spend more on maintaining the app.

Cons of white label apps

Despite the above benefits, there are so many businesses that continue to invest in building custom apps. Why is that so? It’s because of these very serious disadvantages of white label apps:

Limited scope for customization

The biggest disadvantage of white label apps is that there is little to no scope for customization.

As I mentioned earlier, white labeling companies build these apps as generic solutions to businesses in the entire industry. So they add only standard features in the app that are relevant to the industry.

On the other hand, a custom app is well, a custom app. You build it or get it built keeping your unique business needs in mind. You can include all those features that address the pain points of your target audience. Even smaller features play a huge role here.

A custom app is more likely to satisfy your customer’s needs and hence, gives your app a good retention rate.

Brand identity overlap

It’s true that a white label app allows you to add your own brand identity elements to the user interface. But then all the businesses that buy this app also have the same kind of placements of their brand elements.

Ultimately, the app design and user interface fail to distinguish your brand from other brands in the industry.

On the other hand, in the case of custom app development, you can design the entire app interface to match your existing brand tonality. If you are a business that has a quirky brand image, you can incorporate the same in your custom app.

Similarly, if your brand has positioned itself as a high-tech brand, you can reflect the same in your app UX and UI.

Source code ownership and data exploitation risks

Most companies providing white label apps will not give you access to the app source code or the server. So you can neither confirm how robust the source code is nor ascertain how secure your users’ data will remain on the server.

If there is any breach in the data, it will damage your business’s reputation beyond repair. Moreover, there is no way for you to find out whether your app data is being exported or sold to third parties.

However, when you build your own app, there are no such risks because you hold exclusive rights to your app data. Even if you hire an app development company, they will transfer the IP rights over to you so you can confirm the server’s safety.

Needless to say, you have full ownership of the source code when you build your own custom app.

High chances of App Store rejection

Remember when Apple had banned the publication of white labeled apps on the App Store? Thankfully, the decision was soon taken back considering how so many small businesses would lose their apps.

However, if you take a look at the new App Store guidelines, you’d see that a “copycat” app will still likely be removed. So if you decide to use a templatized app, with a very common design, you run the risk of getting your app banned from the App Store.

Even the Play Store is very particular about businesses that seemingly copied the design from other apps and published the new apps as their own.

To avoid any such risks, the only solution is to build a custom mobile app for your business.

Difficult to scale and upgrade

If there’s one thing that the dreadful COVID-19 pandemic has taught us, it’s to always be prepared for much more than you could ever expect.

The trends in your industry or how your business functions can change at any time in the future. So your business app needs to be developed in such a way that you can incorporate changes in it quite easily.

In the case of white label apps, adding or removing functionalities is a tedious task.

First, you need to communicate your new requirements to the source code owner. They will then decide whether they can make the changes or not because they may be hosting multiple apps using the same source code. The process can be a real headache, to be honest.

On the other hand, scaling an app is much easier when it is custom-built solely for your business. Even if you outsource the development process, you can still get the changes made quickly because the source code is with you.

Ultimately, should you procure a white label app or build a custom app for your business?

That depends on your business needs, how important your brand image is for you, and how tight your development budgets are.

There is no arguing the fact that white label apps have much lower development costs compared to custom apps. But I believe a more accurate comparison will be the one based on Return on Investment (ROI).

You get a white label app for fewer bucks but how significantly will they help you build a stronger brand or generate higher revenues? Not much. Because at least a couple of businesses in your niche are using white label apps with a similar design too.

But when you build a custom app and invest more money in it, your brand becomes stronger and your business garners trust from the users.

Once you are seen as a bigger brand, you can generate higher revenues and increased retention rates.

So based on your long-term goals, you can decide whether you want a white label app for your business or a highly efficient custom app.

Krunal Shah

Krunal Shah is the CTO and Co-founder at Third Rock Techkno. With an extensive experienced gained over a decade, Krunal helps his clients build software solutions that stand out in the industry and are lighter on the pocket.

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