White Labelling.  How to approach it and how to make it successful.

White Labelling:   What the hell is that then?

The drone industry in the UK is made up of a LOT of sole traders and one-man companies.  There are also a few bigger companies whose business model is to advertise for large contracts involving lots of small jobs but to make this work by farming out a large proportion of those jobs to other operators.

So if you are a small business (in terms of staff) with tremendous marketing capabilities then the chances are you won’t be able to sensibly handle the amount of work coming in.  Alternatively, you may be a small operator with time on your hands and able to help somebody with some of their overflow.  This is where white labelling comes in.

White labelling is different from working against another company’s ops manual.  If you are doing that then you are just a sub-contract remote pilot.  you will be operating against their processes, risk assessment and insurance.  True white labelling is where you provide the service against your own procedures, risk assessment and insurance but…and here’s where the “white label” bit comes in…the client just sees the prime contractor.  They don’t see your brand, business cards or anything else that advertises your operation.

What could possibly go wrong?

Like any relationship white labelling is subject to all sorts of potential problems.  This is exacerbated in the UAS industry because sometimes the work can be sporadic.  One minute there is a job that needs doing (urgently…it’s always urgent) but then there are months with no extra work to be doled out.  This means that many operators don’t get into the swing of white labelling so a stable process doesn’t have a chance to evolve.

This can lead to fallings out between the “prime contractor” and the “white labeller”, two terms that I’ll define below.  The relationship can become strained because of misunderstandings of the requirement, or the cost, whether the specification has been met or whether expenses are covered…in fact the parties can fall out over any aspect of the white label agreement.

What the UAS world needs now…

What we need is a guide on what is expected of both parties involved in a white label agreement.  I’m not going to write this in contractual language.  For one thing it is unnecessary.  If something is written so that both parties and a third party can understand it then that is contractual enough.  For another, people make lots of money writing contracts so who am I to steal their crust?

First we need a couple of definitions.

The Client in the jabber below is the person who ultimately wants the work doing..  They need a roof survey and they invariably need it NOW!

The Client does an internet trawl and finds a great company (which they think is nearby but is actually 250 miles away) and asks them to do the work.  This company has just become the…Prime Contractor.

The Prime Contractor is the organisation that is dealing directly with the client.  The client may set the Prime Contractor up on their purchasing system (or they may already be there) and expects to see an invoice from them.  However in this case the Prime Contractor is sitting in their hot tub and doesn’t actually want to drive 250 miles to do a roof inspection.   So the Prime Contractor gets onto a Facebook group and advertises a job for a “White Labeller”, because in this case he doesn’t want the hassle of getting a new operator onto his manual.

The “White Labeller” is the person who is going to go and do the job.

Roles and Responsibilities

Let’s make it clear from the outset.  A job needs doing here.  The problem is that in many cases the Client may be new to using UAS data and doesn’t really understand exactly what they want or what’s achievable safely and legally.  This may not matter if they have low expectations because they’ll be delighted with almost anything.  However, if they have specific requirements then it is the clear responsibility of the Prime Contractor to understand the requirement and to specify this clearly to the White Labeller.

The Prime Contractor must specify the requirement clearly.

Often at this stage the only discussions on price might revolve around a fixed price or day rate.  The price may include expenses or they may be extra.  It sort of doesn’t matter providing both parties are happy at the cost arrangement.

Both parties need to agree the price for the job.

What is often forgotten at this stage are the payment terms.  Where the parties haven’t worked together before there can be a little dance at this stage.  Until the data is passed across, whether payment is made or not, the Prime Contractor is vulnerable.  If it has passed without payment being made, the White Labeller is vulnerable.  Various points lend themselves to the payment being made dependent upon the trust between the parties.  One is payment before the White Labeller will do the job.  The next would be once the job is complete but before the data is sent (though evidence that the task is complete may be available from on-site images).  Finally, payment could be made once all data has been sent.  It is also possible that the White Labeller could extend payment terms out to 30 days or even longer.

What is not acceptable is where the Prime Contractor unilaterally stretches the payment terms.  Often, this occurs because of poor cash flow and the Prime Contractor has not received payment itself.  Let’s be perfectly clear…the lack of ability of the Prime Contactor to collect their debts should not become a problem for the White Labeller.  They have carried out work, often at cut rates, in good faith and deserve to be paid on time.

Both parties need to agree the payment terms.

Having been given the specification, the White Labeller needs to agree a time and day by which they will complete the task.  This may be subject to the usual caveats such as ability to obtain airspace permissions or weather.  Until these points are agreed then there really is no contract in place.

Both parties need to agree the completion date and surrounding conditions.

OK, the White Labeller is good to go.  They need to go and collect the data as they normally do, but with a really important exception.  When on site you are there to represent the Prime Contractor, not your own company.  There is no handing out business cards unless they are those of the Prime Contractor.  If you are wearing a jacket or hi-viz make sure it has a neutral name or no name on it (some Prime Contractors may even provide you with one  of theirs if you do regular work for them).  Basically, you are not only flying a drone, you are acting as one yourself.  You are there to do the bidding of another.  If you don’t like this concept and insist on constantly pushing your own company then maybe white labelling isn’t for you!

The White Labeller must represent the interests of the Prime Contractor with the Client.

The White Labeller must ensure they follow the specification to the letter.  If this isn’t possible then you must communicate with the Prime Contractor to clarify what can be achieved.  One way or another, you need to be delivering an agreed set of data, even if this changes throughout the job.

The White Labeller must meet the data specification.

Part of the overall job specification should include how the data is delivered (and often how quickly.  The White Labeller needs to ensure they get it to the Prime Contractor as soon as possible.  Sometimes this may be absolutely critical to the Client.  If you haven’t already you can send your invoice at the same time.

The White Labeller must deliver the data in the requested manner.

Let’s go back to payment again shall we?  I’m not going to apologise for this since it is key to a harmonious relationship.  At this point the White Labeller has done their bit.  Now it’s time for the Main Contractor to put up or shut up.  Get that invoice paid please.

The Main Contractor must pay the White Labeller (if not already done).

Is that it?  Not quite.  The White Labeller may have a copy of the data (well, the original strictly speaking).  Many operators are justifiably proud of their work and have and almost obsessive compulsion to post a sample of their latest handiwork online.  That’s fine when they have an understanding that it is OK to do so with their own client.  But in this case they are one step removed and need to understand that this changes things.  Technically, they may own the copyright to the images.  But morally, they owe a duty of care to their Prime Contractor.  If it isn’t clear in your agreement that it is OK to post then don’t.  If you do and are requested to delete it then do so with good grace.

In some cases the Main Contractor will be happy to release permission to use images but this may not be for some time after the task.  Images may relate to future property developments which could have local sensitivities for example.

The White Labeller should not use data without the permission of the Main Contractor.

This last one can be frustrating.  I did some TV work nine months ago for an operator but neither of us are able to use any of the output until the series airs.  There were some superb and unique images captured and neither of us can wait!

Sometimes both parties need to be patient!

That’s that then?

Just about.  The key points are these.  Payment and performance.  Nobody wants to have paid for poor quality images and likewise nobody wants to provide great data but not get paid what was agreed or in the agreed time.

Just to recap:

The Prime Contractor must specify the requirement clearly.

Both parties need to agree the price for the job.

Both parties need to agree the payment terms.

Both parties need to agree the completion date and surrounding conditions.

The White Labeller must represent the interests of the Prime Contractor with the Client.

The White Labeller must meet the data specification.

The White Labeller must deliver the data in the requested manner.

The Main Contractor must pay the White Labeller (if not already done).

The White Labeller should not use data without the permission of the Main Contractor.

Sometimes both parties need to be patient!

Why should I listen to you?

To be honest I’m not sure why anybody does.  However, I do have some knowledge in this area.

As a part time operator with a very demanding full-time job I don’t have time to go running around winning flying business.  The commercial customers I would be interested in tend to work the same hours as me so I can’t go flogging my services to them out of hours or at the weekend.  I have a thriving training and consultancy business though and that leads me to know a lot of successful operators.  I also have a great set of exemptions that allow me to carry out some pretty cool flights legally and with the safety mitigations that big commercial organisations love.

What this boils down to is that most of my flying work comes to me from other operators and I usually have to fulfil it under my own, unique, Operational Authorisation.  By providing white label services for 90% of my flights I’ve got to understand which relationships work and which don’t.

I also have a background of 30 years working with procurement contracts.  So I know how short and long-term service arrangements work best.