As the host of Hubstaff’s Agency Advantage Podcast, I’ve done my best to create content to help digital agency owners build and grow their business, but there is one subset of agencies that I haven’t talked much about – white label agencies.

White labeling is when a service produced by one agency is branded to appear as though it is coming from a different agency.

Say you run a web design agency and you have a client who needs help with SEO. You could refer them to another agency that offers those services, or you could partner with a white label SEO agency who could provide those services for your client while making it seem as though they come from you. This lets you build a deeper relationship with your client and gives you additional revenue by adding a margin on top of what the white label agency charges you.

While this makes sense for the agencies they partner with, how does this work for the white labelers themselves? What is it like to run a white label agency, and what are the challenges?

To answer these questions and more, I spoke with 7 owners of successful white label agencies in different fields to get their opinions. The result is a guide to help you understand the challenges of building your own white label agency as well as the best way to overcome them.

Meet the Experts

Einar Emilsson

In 2013, Einar launched The White Label Agency to focus solely on white label WordPress development services and in the 3 years they’ve been in business the team has grown to 60 employees.

Chris started Third Marble in 2009 and today they help agencies get their clients to page one of Google using SEO and AdWords.

Maciej Fita, Owner of Brandignity

Based in Naples, FL, Brandignity was founded by Maciej in 2010 and offers SEO service plans and professional management services for companies looking to grow their online branding & search engine ranking efforts.

Travis founded Real-Time Outsource in 2009 as a social media white label service providers and they offer their services to agencies and social media management companies.

Nate and his partner Connor Hood started Code My Views in July 2015 as a full-service development partner serving creative agencies and brands out of San Francisco and Austin.

Damian Papworth, CEO of SEO Resellers Australia and SEO Resellers South Africa

Damian launched SEO Resellers Australia in 2014 to help his partners offer add-on services to their clients such as SEO, PPC management, Social Media Marketing, Web design and development, and copywriting services.

In 2009, John founded PPC for Small Biz and today they provide white label PPC programs to complement their partners’ service offerings.

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1. What was the hardest part of building a white label service business?

While building any agency is hard, building a white label business presents its own set of challenges, so I wanted to learn some of the challenges specific to this type of agency.

Domain experience

A prerequisite for starting any agency is having domain experience to actually get the job done, and because of that, most of these agency owners didn’t jump right into white labeling:

John Pfeiffer: I’ve been in the direct marketing world for over 20 years, so I already had expertise and industry knowledge that I could leverage to transition into the PPC world which made things easier. Without that, getting your first client can be difficult.

Being able to share your experience

When you do great work as a traditional agency, you usually can add it to your portfolio to let prospective clients see the kind of work you’ve done, or at the very least you can add a logo to your website. As a white label agency, however, you have to remain behind the scenes, so even if you put out something amazing, you can’t publicize it:

Nate McGuire: White labeling is the best of both worlds to us. You get to work with great clients and you don’t have to go through the procurement process to connect with large clients (and budgets). The only bad part is not being able to show all the awesome work we’ve done and cool clients we’ve coded for.

For us this becomes a hands-on process: hopping on a call to talk live about requirements is the best way to demonstrate you have the experience and skills to do the job.

Being competitive

Maciej quickly realized that he had to find a balance between offering an attractive price and still having enough margin to make the relationship worth it. This was compounded by the fact that much of the market seems to be in a race to the bottom on price:

Maciej Fita: Being competitive in pricing. We’re a U.S based agency and many of the “SEO resellers” out there outsource many SEO efforts overseas which we can never compete with. You have to find that sweet spot in pricing where there is enough meat on the bone for everyone while still providing value. At the end of the day your partners need to be 100% satisfied and their clients need to see results because without them you have no white label program



We’re a company that is always trying to keep our overheads down in order to pass the savings onto the client. We have found a sweet spot that works for us from a pricing standpoint. The hopes are we find partners that will provide volume allowing us to price a bit lower so everyone is happy. We’re not greedy. If we can make a profit and the partner can as well while providing value to the client it’s a win-win.

Technology

Once you have the clients, one of the first challenges any white label agency faces is that they need to be able to deliver everything as though they are the partner agency. This includes simple things like making sure all reporting has your partners’ logos, but it gets more complex when it comes to managing accounts and other information:

John Pfeiffer: As a white label agency, it’s important to build a firewall between our partner and the end client and this can quickly get complicated when managing AdWords accounts and setting up MCCs (AdWords manager accounts) and sub-MCCs. It’s important to develop these processes early on to prevent problems down the road.

Establishing a workflow

With clients coming in and software to handle the technical side of the business, you need to ensure you develop a workflow that keeps communication between all parties running smoothly. For white label agencies, there is a middle man between the end client and yourself, so if you don’t optimize the ways you work and communicate, you are quickly going to be burdened by a constant back-and-forth.

White label agencies need to function as part of their partner’s team and to do that the agencies need to adapt to the way their partners work. Not only that, but you need to make sure your team is communicating efficiently so that you don’t add to the already complex nature of the job.

The better your workflow, the more you can minimize this.

Chris Fawcett: The hardest part of building a white label service is figuring out how you’re going to communicate with the end customer. You need to understand their goals and expectations but have to get the information by asking a third party. A lot can get lost in the translation. The third party will also not typically know how to drill down to get the information needed without several back-and-forth discussions.

Einar Emilsson: The hardest part was the first two years when we were rapidly building a team, simultaneously learning the product, and gaining the experience to work with marketing agencies on a big scale. We didn’t have the workflow in place to streamline all of this.

Travis Huff: The biggest part of our white label service is developing a workflow that works effectively for both our team and our white label partner. As we partner with large full-service advertising agencies, digital firms, social media companies, PR firms, and small boutique agencies, each with their own goals and agendas, we work hard to develop a flow that provides the most benefits to both partners.

Finding ways to continue providing value

Those are the challenges you face while getting ramped up, but after you have your processes in place, you can’t just go on autopilot. More work needs to be done in order to make sure those clients remain clients:

Damian Papworth: Beyond that, the ongoing challenge is ensuring that everyone involved in the business gets real value from their involvement – and from every element of our structure. From the end beneficiaries of our services, to our clients, to sales teams and other stakeholders, they all must get real value. Not just token value but real solid value. This impacts so much of our decision making: from new products, to marketing, to structural changes, etc.

The challenge here is that, being wholesale, our prices and margins must be low, so how then do we ensure ALL stakeholders get value from every element of the business.

Answering this question consistently well is one of the core reasons for our success.

2. How do you earn your partner’s trust that you won’t let their clients down?

As a white label agency, your partners are trusting you with their clients. They know it should be in your best interest to deliver results, that hasn’t always been in their experience. Because of these bad past experiences, there is a gap of trust the white label agency needs to cross to get those first few projects and prove themselves.

Here’s how these 5 experts earned their partners’ trust:

Prove you know what you’re doing

The first step is showing your partners that you know what you’re doing and that you can get them a consistent result. While having successes in the past is important, you need to prove that you can do it again in the future.

Chris Fawcett: We earn trust by answering all the agency’s questions. There is a period of “are you handing me a bunch of excuses, or are you actually going to make me look good?” The only way to get past that period is to answer all their questions professionally. We also offer 2-3 months of free service for the agency’s business so they can get a better feel for how we operate and the type of reports they’ll get.

Damian Papworth: We have a very strong track record performance-wise, which has led to quite a few friendly clients who are happy to be reference sites for us. We also have a strong quality framework where our clients (partner agencies) form a vital role by cross checking and approving our work. This step ensures quality in our final product but also engenders our clients’ confidence in us.

Achieving this consistency isn’t simple, so I asked Damian to expand on how he trains his team to produce reliable results:

Damian Papworth: I think the first step is to get a quality leadership team. Where we have done this well and have the right people in leadership positions, most staff issues go away, our teams become highly effective and our staff becomes highly loyal.

On the recruitment side, our operation is very process driven, so with output, we need our staff to be able to follow processes well. The rest is about communication with our clients – in listening, setting expectations well and following up. These are the two qualities we look for when hiring. Combine this with the right leadership and everything falls into place.

Technical skills can always be taught, these type of qualities can’t though.

Be transparent

Throughout all of my questions, the strongest recurring theme was the importance of transparency at all steps of the process, but especially when earning trust:

Damian Papworth: Our systems are deliberately designed to provide complete transparency to our clients (agencies) so they know what is going on at all times.

Einar Emilsson: To earn a partner’s trust we focus on explaining in detail our processes to make them feel confident that we are up for the task and that we are capable of delivering with good quality and in the right time. It is also important to make sure that we are 100% transparent, with a focus on communicating clearly and frequently.

Maciej Fita: We’re very transparent in our approach, so our clients know and understand what we are doing at any given moment. We try to reiterate that no client is left in the dark which is something that happens quite often in our industry. Our clients know what we are doing before we do it.

John Pfeiffer: Ralph Waldo Emerson said it best, “Trust men and they will be true to you; treat them greatly and they will show themselves great.” Trust is paramount when working with people that you may have never met in person. I rarely meet face-to-face with most of my clients and have worked with them for many many years. Trust is instilled in others by being your true authentic self. In the internet marketing work that we do, trust is communicated via email, phone, IM, etc. and I gain the trust of others by embracing my trust in them. Say what you’re going to do and do what you say.

Treat it like a partnership

In the white label space, there are more than a few fly-by-night operators out there just looking to make quick money and not worrying about the quality of their work. To earn the trust of your partners, you need to prove that you’re in it for the long haul, and often that can come by guaranteeing your work:

Einar Emilsson: We have learned focusing on the long-term relationship is the most important. We do not make money on the first projects, but instead, we generate value from the 20-30+ projects we do for our loyal partners. By keeping a warm and open atmosphere in our offices and in our chats with the partner, our partners come to understand that we are committed to the relationship and that we are an extension to their in-house team.

Travis Huff: We truly look at our white label service as a partnership, and it starts with the first 30 days of our service! We look at the first 90 days of our relationship as a vital zone to deliver the most value to our campaigns and our team.

Nate McGuire: True trust comes over time and working together successfully. Many clients have seen developers disappear, so the fact we are a legitimate business (vs. a freelancer) helps. We offer 100% guarantees on all our projects so if we miss the deadline we refund your money. We also have a list of great references from past work that have been so kind as to speak with new clients. That combination of guarantees, expertise, and recommendations makes sure new clients are comfortable working with us.

3. What is the most important advice you can share for keeping your partners happy?

By the nature of the work, most white label agencies are providing an ongoing service to their partners. Even though an agency like Code My Views does one-off projects for their partners’ end clients, those partners don’t change. Because of this dynamic, in order for a white label agency to be successful, they need to make sure to keep their partners happy.

First and foremost, deliver results

The simple answer is results. If you can’t get your partners results, it doesn’t matter what else you do:

Chris Fawcett: Easy – deliver results. If the phone is ringing, the end client is happy.

Be reliable

If all you give your partners are results, but you are difficult to work with, then they are going to go with somebody else. As a white label agency, your partners are already offering their own services to the end clients, so you simply cannot make it difficult for them to use your services, otherwise it isn’t worth the distraction:

Einar Emilsson: Keeping our clients happy is all about being reliable and solving problems when they come up. A service is very different from a product in the sense that it is an ongoing transaction where we keep adapting and improving what we do to suit our partners.

Travis Huff: Realtime is primarily focused on customer service to our white label partners, getting urgent posts out on pages, making revisions, and moderating the communities every day of the week including nights, holidays and weekends. As our team grows we provide even more added value to our white label partners as well, which is the most exciting part of our business. Our job is to help our clients make more money from social.

Have a plan

Clients want to know that you aren’t just throwing a bunch of ideas against the wall and seeing what sticks. They want to know that you have a long-term plan, know what you’re doing, and aren’t afraid to push back if you spot any red flags:

Maciej Fita: We actually construct a 12-month roadmap for each client (for free) and then show our clients what we’re doing. This is something that most resellers don’t offer because they are worried they will take off with the info and do it themselves. If someone wanted to do that with our strategy I wish them the best of luck. It’s constant bobbing and weaving and most strategies shift and evolve because the industry is dynamic. Most won’t get that part.

Nate McGuire: Don’t be afraid to say no or speak up when there are red flags. Your client is working with you because you are a trusted resource – by not saying anything you are doing a disservice to them and the end client. That being said, in a white-label business, being accommodating (within reason) is the name of the game.

Educate your partners

Not only do your clients view you as a true partner to their business, but you’re also an expert in your field. Part of your job as an expert is to educate your partners on how the changes in your field impact their business and their clients’ business:

Damian Papworth: The first part of this question is recognising who exactly our clients really are. In a wholesale situation, this is a bit tricky as the services we provide are not necessarily directly for our clients, rather they are for our clients’ clients. So it’s really important we understand who exactly our clients are and always make decisions that are to their specific benefit.

The second part is real communication. I get feedback from our clients all the time. Sometimes it is valid, other times it is not and comes from a lack of understanding or awareness. When the feedback is valid, we do everything we can to take that feedback and build a better service for our clients, and thereby a better business for ourselves. Where it’s not, we offer education and support to upskill our clients so they can use our system better. Once again doing this well results in a better business for both our clients, their clients, and us.

John Pfeiffer: Results go a long way in keeping your clients happy, but especially when working with small businesses, results alone aren’t enough to keep them around. To make the partnership work, you need to do more than just deliver the service, you need to act as an advisor to your partners and help educate them on the changes in your space so that they can better sell your services.

When Google removed the right side column for AdWords it forced us to change our entire strategy, and it was crucial that we explained those changes to our partners and what that meant for their end client. You need to remember, the partner is selling the client, so they need to fully understand the current conditions in order to effectively sell the service.

4. What do you do differently than your competition?

By its very nature, white labeling is treated as more of a commodity than traditional agency services. While you need to understand the end clients’ goals to do your job, you aren’t able to convey that value to them, and when partners are evaluating alternatives it becomes much harder to differentiate yourself.

In order to come out on top and earn new business, a white label agency needs to have a sound strategy for standing out from the crowd.

Offer real transparency

While we often think being transparent about our services is the bare minimum we can do as an agency, after seeing how other agencies function, that’s not always the case and providing transparency to your work can be a differentiator:

Chris Fawcett: I think we report results better. Several of the very large white-label providers produce very thin and non-transparent reports. When we ask for access to their client’s accounts, they refuse. Our reports are transparent and comprehensive. Most of our reports are 20 pages long. We also provide the agency and the end client with log-ins and passwords so they can log in and see the raw data if they want. We don’t add an extra fee or a markup to the true cost of the click. If the agency or client wants to leave us, we give them the account to take with them. After all, it is their data, not ours.

Add value for every party involved

Even though building long-term relationships is one of the best ways to make it in the white label space, many agencies are focused on the short term. If you can focus on consistently providing value for your clients, you are going to be successful:

Damian Papworth: I think it’s our approach to value. We don’t accept the concept of “churn” in our business, which, I think, is quite common in our industry. Every single service for every single client is of the highest value to us. With this focus, we are 100% committed to adding real value to every party associated with our business. This covers everything; from pricing, to process mapping, to quality control, to product development, to remuneration, to constant internal review and improvement.

I hate the idea of letting anyone down who commits to my business. This is a matter of real pride for me. And the funny thing is, every time we get the value equation right, our business succeeds.

Responsive to partners’ needs

When your service is viewed as a commodity, you need to find something else to differentiate yourself on and soft skills like communication are a great way to do that. When it isn’t uncommon for freelancers and even agencies to take days to get a response and charge for every piece of communication, just being responsive can be enough to set you apart:

Maciej Frita: We’re very approachable, easy to communicate with, and friendly. We have some resellers where we literally spend 5 hours per week on client phone calls just so everyone is happy and feels good. I don’t know anyone that would do that and not charge for it.

Maintain a narrow focus

This last point is one of the strongest value propositions for a white label agency. Your partners come to you because they know they can’t offer every service under the sun and still do a good job. By picking a single area to focus on, you’re able to build your entire business in a way that maximizes your efficiency and skill there, which is invaluable to your partners:

Einar Emilsson: The main difference is our focus. We have focused on WordPress only and all processes in our company are built around how to turn a PSD into a WordPress website in the best possible way. Another differentiator is that we always have the long-term relationship in mind.

Travis Huff: We price all our campaigns based on the goals and the objectives of the campaign, which allows us to deliver custom proposals and give our partners the biggest opportunities to maximize revenues. Many of our competitors try to do it all SEO, SEM, Logo Design, Website, Graphics, etc etc etc… we only focus on Social Media Management which allows us to adopt the ever-surmounting changes that happen in social media as well.

John Pfeiffer: While we do work with larger clients, our main focus is (as the name implies) PPC for small business. By having this focus, we’re able to streamline and optimize our processes solely around PPC for a specific niche, making us a highly effective organization. It’s because of this focus and efficiency that we’re able to take on clients that other agencies would turn down for being too small which is a great differentiator in the market.

Nate McGuire: Code My Views works exclusively with agency teams. Rather than try to be everything to everyone who does software development – startups, small businesses, enterprise, freelancers – we only work with agencies and understand all the intricacies of client facing development for their teams. That means being willing and able to make changes, support builds and be a high-quality technical advisor, not just a production team.

Conclusion

Anybody looking to start offering white label services needs to be able to answer the four questions in this guide, but as our experts today showed, there isn’t just one answer to each question.

Throughout all of the experts’ responses, I identified 4 themes for building a successful white label agency:

You need to establish a strong workflow It is vital to be transparent with your partner every step of the process Treat your client relationships like real partnerships and be in it for the long run Be laser-focused on what you do best

Building a white label agency is by no means easy, and following these themes alone is not enough, but if you are able to build your agency around these principles, you are going to have the best chance for success.

Good luck and thank you to all the experts who contributed to this guide!

Share your story

Have you had any experience white labeling your services? What about working with a white label agency? I’d love to hear what has worked well for you and what hasn’t, so add your story to the comments below.