In today’s world of digital technology, white labelling has become a game-changer, offering a cost-effective and efficient way to build custom mobile and web applications without having to develop them from scratch.
In many cases, however, white-label apps are not the best choice as they are limited in terms of customisation, functionality and brand identity. In the long run, such a system might also be more expensive than building custom software from scratch. It might turn out that the investment in the development team will pay off relatively quickly.
So, what to do? What solution to choose?
In this article, we’ll take a closer look at what white-label apps are and how this kind of software can benefit businesses of all sizes. I will also guide you through the not-that-obvious pitfalls so you can see both sides of this solution. We also investigate how they differ from tailor-made apps and answer the question of when it’s worth investing in custom software development solutions instead.
What is a white-label app?
A white-label app is ready-made software that can be rebranded and customized to match the look and feel of a particular business and its brand. It’s usually a SaaS (Software as a Service) solution which means that as long as you pay some fee, you can use the software.
White-label apps are pre-built with essential features that are common to many types of businesses. These features may include user authentication, payment processing, user management, and more. This means that they work just like a custom mobile app. White-label apps are designed to be easily customizable, allowing customers to change the app’s appearance, branding, and functionality (at least to some extent) to meet their specific needs.
How do white-label apps differ from custom mobile apps or web solutions?
Now that you know what a white-label system is, let’s take a look at how it’s different from a custom solution.
The first and most important difference is who owns the app. In the case of white-label service, even if you pay a monthly or yearly fee (or any other kind of payment) for a business app and can brand it, it’s not your software. You don’t have any rights to it. You can use it as long as you pay for it, but when you cancel the subscription, you can’t use it anymore.
On the other hand, if you decide to develop your own custom app, all the rights (including intellectual rights) are transferred from a software development company to you. You can also build your in-house team, your employees will build an app for your company (feel free to check our comparison of an in-house team and outsourcing). Anyway, in the case of custom development, you are the app’s owner. That means you can use your software how you want and without any deadline. You can even sell it in the future.
Budget and ongoing expenses
If you’re just starting your business (and it’s not dependent on an innovative generic application idea that requires building an app from scratch), you probably don’t have the money to invest in custom app development. Application development services, whether it comes to web or mobile apps, are way more expensive than subscribing to a white-label app (no matter how great and advanced it would be). Potential benefits (if there are some in your case) of choosing a custom one will be visible after a few years rather than months.
That’s because by developing your own app, you need to handle all the development expenses. When you pay for and use an already-made solution (white-label services) that is offered to many other companies, you participate in those costs, but in a tiny percentage. When you go for mobile app development (by an in-house developer or an app development company), you need to cover all the expenses, and it’s not only paying rates to developers who write the code.
I suggest you check my article on software development costs to learn more about what you’ll pay for in the case of a custom app development and how pricy that might be.
Customisation & features
Although you must wait and pay a significant amount of money in the case of custom app development, you pay for what exactly you want. Your custom app is tailored to your needs, so you not only receive a better-adjusted product but also don’t need to pay for any white-label app features you don’t need.
In some cases, it might turn out that although custom apps are a huge investment, they might return the revenue in a shorter time than you expect. It all depends on how pricy the white-label app you chose is and what monetisation model it offers.
In the case of white-label apps subscription (in the multi-tenant approach), you are limited to the features that apps offer. There are many monetisation models, but the most common seems to be tier-based. You need to choose one of a few (three, usually) plans that define what features you can use (and which are unavailable). In many cases, to gain access to white labelling, you need to buy the highest plan (which is even more expensive).
On the other hand, you might be forced to pay for the monthly amount of users in your app. If your app becomes popular, a white-label software might not be a cost-effective solution.
If the white-label apps supplier offers a backend-based approach, you will be provided with a backend solution and able to implement your own front-end. In this case, you still need developers who will build the face of the app for you.
Development process & maintenance
As you already know, software development costs are associated with the development process, infrastructure and maintenance. If you decide to build your own custom app, you need not only to pay a digital project agency for the job they do but also invest in infrastructure (cloud or on-premise) and further maintenance and improvements.
On the other hand, when subscribing to SaaS white-label system, you don’t need to bother with development services (the app already exists), infrastructure or maintenance. It’s up to your white-label app service provider, and all you need to take care of is pay the fee.
It might happen that with time when your business grows, you realise that it would be cheaper or more efficient for you to invest in developing your own app than paying fees for white-label apps over and over again.
Software development is a huge investment, so you need to make sure you have a budget to spend before you start.
Time to launch
Another difference associated with the software development process is that it lasts some time. The right amount depends on the project’s complexity, but we can say that a year’s quarter is the minimum required to build and launch a really simple MVP. That’s why if you decide to build your own custom app, you must be aware you won’t launch it for months.
On the contrary, when subscribing to white-label apps, people can start immediately. All they need to do is pay the fee and follow the onboarding steps.
It’s easy to start when a white-label solution is ready, and all you need to do is to subscribe. You will probably receive many guidebooks or even an introductory call or training. It will take some time, depending on the type of app and its complication, but it’s rather straightforward to start.
When it comes to your own custom app, onboarding is more challenging. The case is that you don’t have an app yet. You need to build it from the ground up, so you need to figure out how the app will work first – and that’s the toughest part. The good news is that once the app is ready, you’ll be an expert 🙂
Even if a white-label app provides you with the possibility to change colours and logotypes, you must be aware there are dozens of similar apps on the market. If your audience notices that, your branding efforts might lose their effectiveness. Perhaps you should investigate the white-label mobile app offer on the market and see which white-label apps allow you better branding, more customization options and are overall more unique.
The best way to reflect your own branding is to invest in custom development, where you can add your own brand identity elements according to your needs.
Security and data
Another aspect that might affect your reputation (but not only, as it has an influence on meeting law restrictions, too) is data security. If you subscribe to a white-label app, you don’t have control over data processing, security solutions and threats. You can’t control the code and may be unsure how secure the app is.
The bad news is that in the case of personal data processing, it is you who’s responsible for meeting all the regulations, not the white-label apps’ owners. You can read more about personal data in app development on our blog.
In the case of custom app development, you have full control over how the app is built. That makes you certain of whether it meets all the regulations and requirements.
E.g. FinTech is the most growing industry nowadays. Many startups often rely on white-label Software as a Service or Banking as a Service solution, but that trend is forecasted to be reversed. The number of regulations they need to comply with is growing, and this trend is expected to keep going down in the nearest future. In these circumstances, the best way to ensure they operate legally is to gain control over every aspect of the app.
App Store acceptance
If you are about to subscribe to a mobile app that you would like to add to App Store, you must remember that such template-based apps might be banned by App Store. If that happens, your app will be inaccessible to your end users.
By building your custom application, your developers are to ensure there won’t be any problems with uploading it to Google Play or App Store.
Scalability and updates
Even if everything works great, and you have a perfect white-label app that is launched where it should be, you might still face a problem with scalability and updates. The system you subscribed to might not be prepared to handle that many users you have or delay fixing important bugs that might discourage people to use your app.
They can also schedule maintenance when your app is at its peak of usage. As you expect, users won’t be satisfied when the app they use suddenly stops responding.
When developing your own custom app, you don’t have those problems because you have control over the situation. You can take action in advance to not only improve the app according to end-users’ needs but also scale it before any problems occur and schedule maintenance based on usage data.
Pros and cons of each solution
Pros of white-label apps
- quick start
- easy onboarding
- don’t require development skills
- less expensive in the short term
- small regular subscription fees
- development and maintenance is on the provider
Cons of white-label apps
- might be more expensive in the long run
- little visual customisation
- limited to app features
- not unique app design
- no control over security and code
- App Store can ban such an app
- might not be scalable enough
- problematic updates
- you need to wait for support in case of problems
Pros of custom app development
- you are the expert on how to use the app
- no regular fees for using the app
- you can design the app as you like
- unique app design
- you decide what features the app has
- you don’t pay for features you don’t need
- full control over security and code
- no problems with uploading to Apple Store or Google Play
- perfectly scalable
- controlled updates
- the immediate reaction when issues appear
Cons of custom app development
- longer time to maker
- demanding conceptualisation
- require high development skills
- huge investment
- development and maintenance are on your team
- costs of maintenance and improvements
When to choose custom app development instead of subscribing to a white-label solution?
If the strength of your business is a revolutionary app idea, you rather have no choice than to invest in a custom application. The chances that you’ll be able to build an innovative solution using an already existing platform are close to zero.
In other cases, you might be wondering when it’s worth investing in software development and when to stick to a simpler solution.
While white-label app development has its advantages, there are times when custom application development may be a better choice. Let’s take a look at some situations where a custom app seems to be a better fit (especially when you have time and budget).
If your business requires unique functionality that is not available in white-label apps, custom application development may be the best option. Custom application development allows you to create a mobile or web app that is tailored specifically to your needs, with features and functionalities that are unique to your business.
If it’s important for you to differentiate your brand from competitors, custom app development can help. A custom application can be designed to reflect your company’s brand identity and create a unique user experience that stands out from other apps in the market.
White-label apps are in this field inferior as they all tend to look like siblings with different hair colours.
Integration with existing systems
If a business already has existing systems or databases that need to be integrated into the app, custom app development may be necessary. It can be designed to work seamlessly with existing systems, providing a more streamlined user experience.
White-label mobile apps are not likely to support your existing system as they don’t tend to make big software changes for single clients.
Security requirements & compliance
If your company is about to store or process sensitive data in the app or requires a high level of security, custom app development may be necessary. Custom application development gives you more control over security features and protocols, ensuring that the app meets specific security and compliance requirements. Therefore, if you operate in FinTech, MedTech or even Marketing industry, it might be better to invest in custom application development.
White-label app provider is well-protected when it comes to responsibility for any security violations. In fact, in white labelling, any issues in this field are blamed on you, the user, not the white-label app builder.
In conclusion, you should consider your unique needs and requirements when deciding between white-label app development and custom application development. While white-label app development may be a good fit for some businesses, custom application development may be necessary to meet specific requirements or to create a unique user experience that sets the business apart from competitors.
Making a choice remember that while white-label app development can be cost-effective in the short term, custom application development may provide you with long-term cost savings. With a custom app, you can avoid ongoing licensing fees and maintenance costs associated with white-label software services.
If you need a hand with establishing which solution will be more suitable for you, feel free to reach out to me on LinkedIn!
Gabriela is a lead project manager and keeps in mind that the crucial thing in project management is always seeing the business objectives. She takes care of clients' business outcomes, and that's why clients usually give her a lot of independence.
As a web developer, she understands teammates, which is an asset in project management. UX designer background is handy when clients ask her for advice or consult their app ideas. Having this knowledge, she can address their confusedness or curiosity.
Data analysis and research have no secrets from her as she's a physicist. She knows how to discover data patterns and dependencies, which brings additional value to her everyday work.