The success of any business depends on the demand for the products or services that they are offering. This demand depends on many things such as the needs of buyers, quality, price and even your brand value as many customers have a preference for specific brands. Let’s consider these aspects for a forex brokerage business. You can see that the demand never dies as the number of traders in the global currency market is constantly rising. The trading volume is in trillions and your profit potential is also high as all traders need a broker to access the OTC marketplace.
Taking all these factors into account, becoming a forex broker sounds like a promising business idea that can give good results if you can implement it well. When it comes to launching your own Fx brokerage, there are two routes that you can take. The first route is a tough one to travel for a beginner as it requires you to build the technological infrastructure yourself incurring heavy expenditure. The second route is a simple solution known as forex white labelling which is a feasible alternative that makes things easier for a brand new broker. Now, what benefits do you get while choosing this option and how it can improve your success rate as a new broker? You will get to know everything by the end of this article.
What Is White Label Solution?
White labelling is generally done to establish your brand name while selling the products and services of another business that has agreed to the same. You add your own brand name to their products or services which allows you to cut down on the cost and set up your business in less time. Brand building is the main goal of opening a business with the help of white label providers. But what is the white label solution in the context of the forex brokerage business? In simple words, it is like forming a forex partnership with an experienced broker and operating under their umbrella.
You will get a ready-to-use IT infrastructure along with trading platform integration, a business website, customised tools and a platform with your own brand name and ongoing support from the white label provider. Even the liquidity arrangements and order execution along with CRM solution and back-office processes will be taken care of by the WL provider. Thus, it is a perfect way to enter the forex brokerage industry without rigorous efforts. Let’s see how it can benefit you in the competitive forex brokerage industry.
Benefits Of Using A White Label Solution
Get Started Right Away
The process of setting up a brokerage platform on your own is time-consuming as you have to hire expert developers to design the website and even if you have the best IT professionals on your side, the coding and test runs will take a lot of time to complete. The legal formalities and liquidity arrangements can also delay the launch of your business. It will take several months or even years in the worst-case scenario. But the white label solution can be set up real quick allowing you to get started right away.
Guidance & Support
The white label provider can act as your mentor and guide, besides functioning as your technology provider. Some white label providers even offer training programs for their white label partner brokers. The ongoing support you get from an experienced broker makes you feel at ease. You just have to make sure that the white label provider has a responsive customer support system so that you can seek their help and advice as and when needed.
Superior Technology
All traders prefer a platform that provides cutting-edge technology to carry out the trading process without any interruption. Modern traders often look for advanced platforms like MT5. They want a seamless trading experience every time and you may not be able to offer it due to the limitations you have as a new broker. But when you opt for a white label solution, you will be rebranding high-end technology which comes with a superior trading tool and that way, you can provide the best user experience to your future clients.
Less Risk Involved
The forex brokerage business has high profit potential but the risk is equally high due to complexity, high costs and severe competition. But all these risks can be reduced when you choose a reliable white label provider to help you establish your business. It does not fully eliminate the risk and uncertainty but it is surely a lot safer than starting as an independent broker which may lead to a lot of costly mistakes due to inexperience and incompetence.
Better Marketing & Promotion
Most independent brokers tend to focus on building the platform and providing quality services to their clients. When you have to do everything on your own, marketing and promotion take a backseat which affects the performance and profitability of your brokerage business. When you choose a WL solution, you can do better at marketing and promotions as all other key functions are outsourced to the WL provider
Customisation & Branding
You may be doubtful about the customisation and branding possibilities of white label solutions since you are just offering the technology and platform of an existing broker. But the best thing about white labelling is that they are highly customisable and you can change the entire look of the platform to blend well with your brand image.
How Much Capital Is Required For Opening A White Label Forex Brokerage?
The capital requirement to launch a brokerage with white label solution is much lower than the total cost involved in entering the industry as an independent broker. But there will be an initial setup cost and platform maintenance fees which is an ongoing cost that has to be paid every month. Now, these charges will vary depending on the provider you choose. Besides this, you should also consider marketing and promotions expenses. You will not be able to generate revenue right from the beginning, so having sufficient funds is essential for the smooth running of your brokerage.
How Long Does It Take To Launch Your Brokerage Using White Label Solution?
Like I said earlier, the white label solution allows us to set up our brokerage faster than ever as it is a turnkey solution that can be customised and rebranded within a short period. Still, the time taken to launch your brokerage will vary depending on the WL provider you choose. Normally the processes can be completed within a few weeks but we cannot say how much time it will take to get the necessary licences and approvals based on the jurisdiction that you choose for operating. The WL provider may help you in entering the market as a regulated broker.
Summary
To summarise, a forex white label solution is a feasible alternative to gain a competitive advantage in the brokerage industry. Because it allows you to offer superior technology without having to build it from scratch, saving a lot of time and money. Another benefit you get here is being able to focus on brand building.