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November 24, 2023

Choosing Between Custom and White-Label Apps: Pros and Cons

November 24, 2023
Read 10 min

In 2023, establishing a strong online presence is the key priority for businesses that want to survive and thrive. Among the benefits of going online, there are a broader customer base, enhanced customer experience, data insights for informed decisions, and a whole lot more.

When it comes to choosing the format of that online presence, mobile apps outperform websites or web apps from all viewpoints. Apps are faster and more responsive than websites, and they offer a more personalized experience for users. and they also allow for push notifications, which is a powerful tool when it comes to customer engagement and sales promotion. On the other hand, developing a custom app from scratch is a far more resource-consuming process compared to building a website, which may deter non-technical companies from digitization.

This is where white-label apps come into play. A white-label app is a software application developed by one company, rebranded, and offered by other businesses under their own branding. It’s an affordable way for companies to provide their customers with a tailored mobile experience without making significant investments. However, white-label apps have their drawbacks.

Ultimately, the choice between custom-made and white label app depends on your business’s specific needs and goals. In this article, we define and explore the pros and cons of each option. Read on to understand all the small details and make a well-informed decision.

white label vs custom development

Custom app development explained

Developing a custom business app from scratch requires strong planning, technical, and management skills. The process usually involves the following steps:

  • Concept and planning. To give a project a good start, it’s necessary to thoroughly research the target audience and market, and outline a clear project roadmap that includes main milestones, budgets, and other important details.
  • Prototyping and design. A good app allows users to perform their tasks effortlessly. To ensure a seamless user experience, designers create wireframes, mockups, and prototypes, test them, and make adjustments. Then the interface is created with a unique brand-tailored appearance.
  • Development. Now backend and frontend developers take the process over. They code the application according to the tech stack defined at the planning stage and integrate the app with third-party services, if necessary.
  • Testing. The application undergoes thorough testing to identify and resolve any potential bugs or issues before being released to users.
  • Deployment. In a nutshell, deployment is the process of making the app available to be used by users. While this definition may seem simple, it is one of the most important stages of the app development process as it will directly impact how quickly an application can respond to changes in user preferences or requirements, and most importantly, the quality of each change.
  • Post-launch maintenance and support. The journey isn’t finished yet. After the release, the team continues to maintain and support the application, introduce new features, and monitor app’s performance to timely fix any issues.

As you can see, custom app development is a complex and resource-intensive process. To efficiently execute all the steps described, you will need to assemble a team comprising at least a business analyst, a project manager, a few frontend and backend developers, UI/UX designers, QA engineers, and a DevOps specialist.

Another option is to outsource the project to a mobile app development company. This is a more affordable way to build a custom app for business, as you will only pay for the hours worked by the team on your project. Other costs, such as hiring expenses, employee salaries, taxes, benefits, insurance, and hardware costs, will be the responsibility of the company you outsource the project. You can use software development outsourcing guide to get more detailed information. This option also enables a shorter time-to-market, which can be crucial in highly competitive markets or industries.

To make an informed choice between in-house development and outsourcing, you need more information on both options. You can find this information right away in our article about the cost of app development.

White-label app explained

As mentioned previously, a white-label app is developed by one company and then purchased by another. It can then be customized, branded, and used to serve the customers of the buying company. Many businesses can utilize the same white-label application, customized to their specific brand requirements.

Typically white-label app providers offer the option to purchase either just the back end of the app or the entire package, which includes both the server and client sides.

  • If you only pay for the app’s back end, you can create the front end yourself. This allows for more flexibility and customization. However, if you don’t have in-house developers, you will need to hire someone to build the front end using a white-label application’s infrastructure.
  • If you purchase an app with both server and client components, you will only need to make a few minor modifications. However, this approach limits customization and scalability. If your business requires additional features or infrastructure to handle the increased workload, you will need to seek an alternative solution.

As for the costs of white-label apps, there are two common options:

  • one-time payment for the source code, which grants the buying business lifelong rights to use the white-label app without any additional fees.
  • subscription-based fees – monthly, quarterly, or yearly.

Let’s explain what is white label app with an example. Imagine a company named “Billzilla”. They made a white-label e-commerce app, which is a flexible ready-to-use mobile application made for selling things online. This app is like a blank page that can be easily customized and branded.

Now, consider another fictional business – let’s say it’s a pet shop called “Purrfect”. Purrfect wants to enable its customers to buy online and use a mobile app for viewing the catalog, reading reviews, placing orders, and making payments. Instead of creating their own mobile app from the beginning, they chose to use the white-label app offered by Billzilla. Here’s how it works:

  1. Branding and customization. Purrfect asks Billzilla if they can use their white-label app. Billzilla customizes the app by changing its colors and logos and adding Purrfect’s name and branding elements. The final product is a customized app that is based on the white-label app but with Purrfect’s branding.
  2. Feature set. Purrfect might want to add extra features such as loyalty rewards for their loyal customers. The white-label app can be adjusted to include or exclude specific features based on Purrfect’s needs.
  3. Deployment. Billzilla assists Purrfect in deploying the app to the respective app stores under their name.
  4. Customer experience. Customers of Purrfect can use their app to shop online instead of going to the store. They can view the available products, read and leave reviews, place orders, make payments, and more.
  5. Maintenance and updates. Billzilla keeps the main white-label app up-to-date and secure, following industry standards. The custom app used by Purrfect automatically gets these updates.

And that is how white-label apps can be a cost-effective and practical solution for businesses looking to establish an online presence without the need for extensive development and maintenance efforts. Just like Purrfect, other businesses that want to sell online can use Billzilla’s white-label app.

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Pros and cons of white label vs custom-made apps

Now when you clearly understand how these two options work, it’s time to decide which one is the right choice for you. To help you make a well-informed decision, we prepared a comparative table of custom-made and white-label apps. Check it out:

ConsPros
White-label apps• limited customization options
• lack of uniqueness
• limited scalability
• dependency on the provider
• quick launch
• lower cost
• support & maintenance are handled by the provider
Custom apps• higher development cost
• longer time-to-market
• tailored solution that meets the business’s specific needs
• flexibility
• unique features that may serve as competitive advantages
• scalability
Pros and cons of white label vs custom-made apps

Let’s dive deeper into each point.

Cons of white-label apps

❌ Limited customization options. Customization options in white-label apps are typically limited by branding and some minor adjustments. Incorporating advanced features can be costly or may not be available at all.

❌ Lack of uniqueness. White-label apps often lack a unique and recognizable identity because providers strive to build more generic and less personalized solutions in order to serve a wide range of customers.

❌ Limited scalability. When your business experiences rapid growth, your app needs to grow along with it. However, this can be challenging with white-label apps, as they may not easily scale to meet the growing load.

❌ Dependency on provider. Dependency on a provider and its decisions can have significant implications for a business, potentially affecting its ability to operate and compete effectively in the market. Therefore, it’s important for businesses to carefully consider the track record and reputation of the provider before committing to their app, particularly in reputation-sensitive niches such as finance.

Pros of white-label apps

✅ Quick launch. White-label apps are readily available, enabling you to go online within a few weeks.

✅ Lower cost. Opting for a white-label app is often more affordable compared to custom mobile app development.

✅ The provider handles support & maintenance. Maintenance and support for white-label apps are usually handled by the provider and included in the fee. There are no additional expenses involved.

Cons of Custom-Made Software

❌ Higher development cost. Compared to a white-label solution, developing a custom mobile app is a more expensive option. However, in the long term, this price difference is balanced out by the cost of customizing and adding advanced features to the white-label app when the need arises. In the long run, the cost of a custom app may actually be lower than using a white-label app for an extended period of time. Considering that you have long-term plans for the success of your business, it makes sense to invest in a custom app rather than opting for a white-label solution.

❌ Longer time-to-market. Building a tailored app that meets your business’s specific needs definitely requires more time than branding a white-label app.

Pros of Custom-Made Software

✅ Tailored solution that meets the business’s specific needs. Your application is carefully crafted from scratch, taking into consideration the specific requirements, preferences, and challenges that your business faces. It caters to the individual needs of your company, ensuring perfect alignment with your operations and setting the stage for sustainable growth.

✅ Flexibility. With a custom app, you have the flexibility and control to easily and quickly adapt to market changes and customer demands.

✅ Unique features that may serve as competitive advantages. In a crowded app market, offering unique features can differentiate your business from the competition. Users are more inclined to select and stick with an app that provides something they cannot find elsewhere, and with a custom app, you can introduce new features quickly.

✅ Scalability. Having a dedicated team that works on your custom app makes it easily scalable. On the other hand, with a white-label app, scaling usually takes time. Scalability allows for the efficient handling of increased user loads and peak traffic periods, ensuring a smooth user experience. It supports business growth and minimizes infrastructure costs by accommodating user and feature expansion. Additionally, scalability future-proofs the app, making it adaptable to evolving technologies and market trends, enhancing reliability and flexibility.

Summary

As you can see, both white-label and custom apps have their benefits and drawbacks. There is no single checklist that can help you determine which of two options will be more beneficial for your business. However, based on our experience, the current state of affairs is as follows:

  • If you have a limited budget, need to roll out the app to users as soon as possible, and time-to-market is the most important metric, then choosing a white-label solution is your best option.
  • If you are aiming for long-term, sustainable growth, we recommend you choose custom app development.

The key is to look at where you are now and where you want to be in the future to make a choice.

At Itexus, we understand that every business is unique, with its own goals and challenges. We believe that custom app development is the most effective way for businesses to establish an online presence. We craft each line of code with a specific purpose in mind, helping you maximize your returns on investments in technology. If this approach resonates with you and you are aiming for long-term success for your business, contact us to discuss collaboration.

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