Agencies often extend their capabilities by partnering with other providers—but the terminology can confuse. "White label" and "subcontracting" are related but distinct. Both involve one party doing work that another delivers to the end client. The differences lie in branding, relationship structure, client awareness, and legal implications. Understanding these nuances helps you structure the right partnership, comply with legal requirements, and manage client expectations.
Key Takeaways:
- White label emphasizes brand invisibility; subcontracting emphasizes a prime/sub hierarchy
- Both models require proper contracts covering IP, liability, and confidentiality
- Quality control starts with rigorous vetting, clear briefs, and built-in review checkpoints
- When in doubt on disclosure, share in general terms that you work with trusted partners
This guide clarifies the definitions, compares the models, and helps you choose and execute the right approach for your agency.
Definitions
White Label
In a white-label arrangement, one company (the "white-label provider" or "white-label partner") delivers work that another company (the "reseller" or "agency") sells under its own brand. The end client typically does not know the provider exists. From the client's perspective, they're hiring one agency that does everything. The reseller owns the client relationship, sets the price, and presents the work as theirs. The provider works behind the scenes, often invisible to the client.
Example: A marketing agency sells "full-service digital" including web development. They don't have developers in-house. They white-label dev work to a development shop. The client sees one agency; the dev shop delivers the product.
Subcontracting
In subcontracting, your agency wins the client and owns the relationship. You subcontract specific work (or overflow) to another agency or freelancer—the subcontractor. You pay them a fixed or hourly rate; you charge the client your rate. The subcontractor works under your direction. The client may or may not know about the subcontractor depending on your agreement and disclosure practices. Structurally, you're the prime contractor; they're the sub.
Example: A design agency wins a website project. They subcontract development to a dev agency. The design agency charges the client $25K; pays the dev $15K; keeps $10K for project management and design. The client may know a dev partner is involved, or they may not—depending on how the relationship is framed.
For more on agency partnerships, see our guide on agency partnerships and subcontracting.
Key Differences
| Factor | White Label | Subcontracting | |--------|-------------|----------------| | Branding | Work delivered under reseller's brand only | Work may be presented as yours or as a partnership | | Client awareness | Provider typically unknown to client | Subcontractor may or may not be disclosed | | Relationship structure | Reseller buys from provider, sells to client | You hire sub, you deliver to client | | Control | Reseller sets client-facing terms; provider delivers | You direct the work; sub reports to you | | Typical use | Expanding service offerings you don't deliver | Capacity overflow, specialized work | | Legal focus | Reseller liability; IP and branding | Prime-sub liability; work-for-hire, indemnification |
The line can blur. According to Clutch's agency outsourcing research, a majority of agencies use some form of external partnerships. A white-label relationship is often a form of subcontracting where the sub's role is intentionally invisible. The main distinction: white label emphasizes brand and secrecy; subcontracting emphasizes the structural relationship (prime/sub) regardless of disclosure.
Pros and Cons
White Label
Pros:
- Expand offerings without hiring: Offer SEO, dev, video, etc. without building a team
- Seamless client experience: One brand, one point of contact
- Predictable for provider: Reseller brings steady volume
- Higher perceived value: Client pays agency rates; you mark up provider costs
- Speed to market: Add new services quickly via partners
- White-label tools: White-label software and client portals let you brand everything from proposals to deliverables—platforms like AgencyPro offer white-label options so partners stay invisible to your clients
Cons:
- Quality depends on provider: You're only as good as your partner
- Margin pressure: Provider wants their cut; your markup must stay reasonable
- Communication overhead: Three-way coordination (you, provider, client)
- Dependency: Lose the provider, and you may lose the capability
- Liability: If provider messes up, the client holds you responsible
- Potential disclosure issues: Some clients or contracts require disclosure of subcontractors
Subcontracting
Pros:
- Flexibility: Scale up and down; no full-time commitment
- Access to specialized skills: Dev, video, technical SEO—without hiring
- Margin opportunity: Mark up the sub's rate; your margin is the spread
- Capacity overflow: Handle busy periods without turning down work
- Direct control: You direct the work; sub reports to you
- Clear structure: Prime/sub is a well-understood legal and operational framework
Cons:
- You're responsible: Client holds you liable; sub's mistakes are your problems
- Quality management: You must vet, brief, and review—management overhead
- Margin depends on markup: Thin spread means thin profit
- Relationship management: Finding, onboarding, and retaining good subs takes work
- Coordination: Briefs, feedback, revisions—you're in the middle
- Client disclosure: Some agreements require you to disclose subs; check contracts
Legal Considerations
Contracts
White label: Have a white-label or reseller agreement that covers:
- Scope of services the provider will deliver
- Pricing (your cost, markup structure)
- IP ownership (work typically transfers to you, then to client)
- Confidentiality (provider doesn't contact client directly; doesn't reveal relationship)
- Liability and indemnification
- Term, termination, and transition
Subcontracting: Use a subcontractor agreement that covers:
- Scope of work
- Payment terms (fixed or hourly)
- Work-for-hire / IP assignment
- Confidentiality and non-disclosure
- Indemnification (sub indemnifies you for their errors)
- Insurance requirements
- Term and termination
Don't rely on handshakes. Use proper contracts—our freelance contract can be adapted for subcontractor relationships, but for complex white-label setups, consider legal review.
Disclosure
Some client contracts, RFPs, or procurement rules require disclosure of subcontractors or third-party providers. Government, enterprise, and regulated industries often have these requirements, as outlined by SBA contracting guidelines. Check your client agreements and RFP terms. Failing to disclose when required can void contracts or create legal exposure.
IP and Work-for-Hire
Ensure your agreements with providers/subs explicitly assign all IP to you (or grant you the right to assign to the client). You need a clean chain of title—client pays you, they get clear ownership. Gaps in IP assignment create risk and can block client acceptance.
Quality Control
Vetting: Both models require rigorous vendor selection. Check portfolios, references, and processes. Start with a small pilot before committing to large projects.
Briefing: Clear briefs, scope documents, and brand guidelines reduce rework. The more you invest upfront, the better the output.
Reviews and approvals: Don't send sub work to clients without review. Build in checkpoints—concept approval, draft approval, final—so you catch issues before the client sees them.
Escalation: Have a process when quality falls short. Who fixes it? Who pays for rework? Define it in your agreement.
Client Transparency
When to disclose:
- Contract or RFP requires it
- Client asks directly
- Work is highly specialized and credit matters (e.g., celebrity voiceover)
- Relationship is framed as a partnership ("We work with X for development")
- Ethical or industry norms favor transparency
When disclosure may be optional:
- General execution work (design, dev, content) where you're directing and responsible
- Client expects you to have a team/network
- No contractual or legal requirement to disclose
- White-label is industry standard (e.g., many agencies white-label dev)
Best practice: When in doubt, disclose in general terms—"We work with trusted partners for specialized execution"—without necessarily naming names. Many clients don't care who does the work as long as you're accountable and the quality is there.
Choosing the Right Model
Use white label when:
- You want to offer a service you don't deliver and present it as fully in-house
- Brand consistency and seamless experience are paramount
- You have a provider willing to work behind the scenes
- Margin structure supports it
Use subcontracting when:
- You need capacity or specialized skills for specific projects
- You're comfortable with the client knowing you use partners (or it's required)
- You want direct control and a prime-sub structure
- Work is project-based rather than an ongoing "offering"
Both: Many agencies use both. White-label for certain services (e.g., dev, SEO) they want to sell as their own. Subcontracting for overflow or one-off specialty work (e.g., video, animation). The models complement each other.
Conclusion
White label and subcontracting are both ways to extend your agency's capabilities without hiring. White label emphasizes brand and invisibility—you sell, they deliver, client sees you. Subcontracting emphasizes structure—you're the prime, they're the sub, you're accountable. The right choice depends on your goals, client expectations, and legal context.
Whatever you choose, use proper contracts, manage quality rigorously, and be clear on disclosure obligations. When executed well, both models help you grow, scale, and serve clients better—without trying to do everything in-house.