Your product team just built an embeddable widget. Sales says three partners want to white label it. Marketing thinks this means "free distribution."
Six months later you have four white label partners. Each one wants custom features. Support is drowning in tickets. You can't tell which partner is driving actual usage.
Partner revenue looks great on paper. Actual profitability is unclear. You're supporting someone else's customers without knowing if it's worth it.
This happens when companies treat white label partnerships as "easy revenue" without building proper program structure.
Here's how to build white label and OEM programs that scale profitably.
The White Label Partnership Models: What You're Actually Selling
Not all white label deals are the same. Structure drives economics.
Model 1: Pure OEM (Original Equipment Manufacturer)
- Partner buys your product, rebrands completely, sells as their own
- Zero brand visibility for you
- Partner owns customer relationship entirely
- You provide: Core product + white label customization
- Economics: Wholesale pricing (typically 40-60% discount)
Example: Twilio provides messaging infrastructure that dozens of CRM and marketing platforms rebrand as their own SMS capabilities. Customers don't know Twilio powers it.
Model 2: Powered-By Partnership
- Partner integrates your product with co-branding
- Your brand visible but secondary
- Partner owns customer relationship
- You provide: Product + co-marketing assets
- Economics: Revenue share (typically 20-40% to you)
Example: Stripe's "Powered by Stripe" in checkout flows. Customers know it's Stripe, but merchant owns the relationship.
Model 3: Embedded Partnership
- Your product embedded in partner platform
- Shared customer visibility
- Hybrid relationship ownership
- You provide: Product + API access + developer support
- Economics: Usage-based or platform fee (30-50% margin)
Example: Plaid embedded in fintech apps. Customers see Plaid during authentication, but fintech app owns ongoing relationship.
Model 4: Reseller with White Label Rights
- Partner resells with limited customization
- You maintain brand presence
- Partner manages sales, you support product
- You provide: Product + sales enablement
- Economics: Reseller margin (20-35% to partner)
The critical question: How much customer relationship are you willing to give up for distribution?
The Partner Selection Framework: Who Makes a Good White Label Partner
Bad selection: "This partner has 10,000 customers, let's do a deal"
Good selection: Strategic fit + capability assessment + economic validation
Criteria 1: Market Access
- Do they sell to a segment you can't reach efficiently?
- Is their customer base your ICP?
- Do they have distribution you don't?
Segment's approach: They white label to agencies serving B2B companies. Agencies reach mid-market segment Segment couldn't activate profitably through direct sales.
Criteria 2: Technical Capability
- Can they integrate and maintain your product?
- Do they have engineering resources for custom implementations?
- Can they handle support escalations?
Red flag: Partner has no technical team and expects you to support their customers.
Criteria 3: Volume Commitment
- Will they hit minimum usage thresholds?
- Do they have existing customer base to migrate?
- What's their sales capacity for new customer acquisition?
Shopify's approach: White label partners must commit to minimum monthly payment ($10K) or volume threshold. Filters out tire-kickers.
Criteria 4: Strategic Alignment
- Are they building their platform or just reselling?
- Will success with them create competitive moats?
- Can this partnership lead to acquisition or deeper integration?
The Economic Model: Pricing That Actually Works
The mistake: Offering standard SaaS pricing to white label partners
The reality: White label economics are fundamentally different from direct sales
Pricing Structure 1: Wholesale with Minimums
Partner pays wholesale rate (40-60% off list) with minimum monthly commitment.
Example structure:
- List price: $100/user/month
- White label wholesale: $50/user/month
- Minimum: $5,000/month (100 users minimum)
- Overage: Same $50/user/month rate
Works best for: OEM deals where partner fully rebrands and owns pricing to end customers
Pricing Structure 2: Revenue Share
Partner sells at their pricing, you receive percentage of revenue.
Example structure:
- Partner sells at $150/user/month
- You receive 30% of partner revenue ($45/user)
- No minimums, pure usage-based
- Partner keeps margin and owns pricing
Works best for: Powered-by partnerships where partner adds significant value on top
Auth0's model: Revenue share with identity platform partners who bundle authentication into broader offerings.
Pricing Structure 3: Usage-Based Platform Fee
Partner pays based on actual customer usage or API calls.
Example structure:
- $0.05 per API call
- Monthly minimum: $2,000
- Volume discounts at 1M, 5M, 10M calls
- Partner bills their customers however they want
Works best for: Embedded partnerships where usage varies significantly by customer
Stripe's approach: Usage-based pricing for white label payment partners. Pay per transaction processed.
Pricing Structure 4: Hybrid: Base + Usage
Combination of platform fee and usage charges.
Example structure:
- Monthly platform fee: $3,000
- Usage fee: $10 per 1,000 events
- Partner gets wholesale rates
- Incentivizes partner to drive usage
Works best for: Complex integrations with variable usage patterns
The Enablement Challenge: How to Scale Partner Success
The problem: Each white label partner wants custom features, dedicated support, and special treatment.
The solution: Tiered enablement based on partner revenue potential
Tier 1: Strategic Partners (Expected $500K+ ARR)
You provide:
- Dedicated partner manager
- Custom feature development (within reason)
- Co-marketing budget and campaigns
- Priority support with SLAs
- Quarterly business reviews
You expect:
- Minimum revenue commitments
- Joint roadmap planning
- Customer reference sharing
- Co-investment in marketing
Tier 2: Growth Partners ($100K-500K ARR)
You provide:
- Shared partner manager (1:5 ratio)
- Standard API access and documentation
- Self-service enablement materials
- Slack channel for support
- Monthly check-ins
You expect:
- Hit usage minimums
- Basic co-marketing (case study, logo)
- Escalation path for critical issues
Tier 3: Standard Partners (<$100K ARR)
You provide:
- Self-service onboarding
- Documentation and developer portal
- Community support forum
- Quarterly webinars
You expect:
- Minimum platform fee payment
- Self-sufficient integration
- Limited custom requests
Contentful's tiering: They have 50+ white label partners. Top 5 partners get dedicated resources. Rest use self-service developer portal.
The Control Points: What to Standardize vs. Customize
The tension: Partners want customization. You need standardization to scale.
Non-negotiable standards (don't customize):
- Core product functionality and features
- API architecture and data models
- Security and compliance protocols
- Pricing structure and minimums
- Support escalation processes
Slack's rule: White label partners get zero custom features. Use public APIs only. Ensures they can scale partnership program without engineering burden.
Flexible customization (within limits):
- Branding and UI elements
- Workflow configurations
- Integration options
- Reporting dashboards
- Feature access levels
The balance: Partners can customize presentation layer but not core product logic.
The Revenue Tracking Challenge: Know What's Actually Working
The dysfunction: You have four white label partners generating "$2M ARR" but can't tell which ones are profitable or which customer segments are working.
What to track:
Partner-level metrics:
- Gross revenue vs. net revenue (after partner share)
- Customer acquisition cost by partner
- Customer lifetime value by partner source
- Support cost per partner customer
- Churn rate by partner
Product usage metrics:
- Active users per partner
- Feature adoption by partner customer
- API call volume and patterns
- Performance and reliability by partner deployment
Strategic value metrics:
- Market segments reached through partner
- Customer logo value (enterprise vs. SMB)
- Up-sell and cross-sell potential
- Strategic competitive positioning
Zapier's dashboard: They track partner performance across 30+ metrics. Review quarterly. Cut partners who don't hit minimum thresholds or have excessive support costs.
Common White Label Partnership Failures
Failure 1: Accepting every partner who asks
Fix: Have clear partner criteria and say no to partners who don't fit strategic goals.
Failure 2: Custom features for each partner
Fix: Product roadmap drives features, not individual partner requests. Partners use what exists.
Failure 3: No minimum commitments
Fix: Every partner has minimum monthly fee or usage threshold. Filters out low-value partnerships.
Failure 4: Can't measure true profitability
Fix: Build cost allocation model tracking support, infrastructure, and partner management costs.
The Uncomfortable Truth
Most white label partnerships look like revenue growth but hide profitability problems. You're supporting someone else's customers, customizing product for their needs, and splitting revenue.
What doesn't work:
- Accepting any partner who wants to resell
- Custom feature development for each partner
- No minimums or volume commitments
- Treating all partners equally regardless of revenue potential
What works:
- Selective partner recruitment with clear criteria
- Standardized product with limited customization
- Tiered enablement based on partner value
- Economic models with minimum commitments
- Tracking true profitability, not just revenue
The best white label programs treat partners as a distribution channel with specific economics. If you can't tell whether a partner is profitable, you don't have a partnership program - you have a support burden.
Stop saying yes to every partnership request. Start building a scalable partner program.