Question
A hardware based startup with an innovative technical solution is looking to enter into a mature, consolidated market.
There is enough of technical advantage to consider direct sales, but this would have a longer road to break-even.
Alternatively, there is the option to work with companies already established in the field.
My main questions are:
1) What is the correct word/jargon to define a) selling a subassembly exclusively to an existing player, b) selling a manufactured product to be branded and sold to an established player (possibly exclusively for a time) [white label?],
2) How do I find cases/examples of these type of arrangements to get reference numbers so I can run financial projections?
We have met a few of the bigger players, and definitely see a road with JV or some other partnership. Need to build out my understanding of how these type of deals work - otherwise I am flying blind.
Thank you.
Answer
The answer to your first question is pretty simple. Basically you are talking about doing an exclusive deal on a (hopefully pattented) item, or just slapping another companies logo on an item which would be a custom label or private label. White label usually refers to SaaS.
Cases are all around you. This just happened to me at Walmart. The Ragu brand and GreatValue brand were right next to each other and were in the same jars. Ragu more than likely did a private label spaghetti sauce for Walmart's GreatValue brand. You can also Google - "top private label brands" or other variations of this search phrase.
