So, have you heard about the latest trend among entrepreneurs looking to make money? It’s all about private labeling on Amazon! With e-commerce giants like Amazon taking over the market, private labeling has become a popular way for individual sellers to create their unique brand and make some profit. The idea is simple – take generic products and put your own brand name on them.
But don’t be fooled, my friend. While it may sound like a piece of cake, creating a successful private label on Amazon takes a lot more than just slapping your name on a product. Luckily, I’m here to help.
In this article, I’m going to give you some tips and tricks on how to create a successful private label on Amazon. Let’s dive in!
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What is an Amazon Private Label?
Private labeling is a simple concept where you purchase products from a manufacturer and sell them under your own brand.
Amazon Basics is a great example of a successful private label brand. They don’t manufacture the products themselves, but instead source them from other manufacturers and sell them under the Amazon Basics name. The private label business has been growing fast and in 2018 alone it reached a profit of $5.5 billion, a 4.4% increase from the previous year.
Did you know that nearly one out of every four products sold in the US is a private label or store brand product? With that kind of growth, private labeling gives Fulfilled by Amazon (FBA) sellers an amazing opportunity to create a trusted brand. You won’t have to worry about manufacturing and Amazon takes care of most of the logistics and customer service for you. All you need to do is find a great generic product and a reliable supplier!
So if you’re ready to start your own brand and make your mark on the e-commerce world, private labeling is definitely something to consider.
Pros of Selling Amazon Private Label Products
Selling private label products on Amazon can be a challenge, but it’s definitely worth considering for anyone looking to start their own brand. Here are three good reasons why you should consider selling Amazon private label products:
1. No More Restriction Worries
When you sell products from other brands, you have to worry about any restrictions that brand has on Amazon. This can be frustrating and time-consuming, and it can limit what you’re able to do with your business.
However, when you sell your own private label products, you don’t have to worry about these kinds of restrictions. You have the freedom to create and sell what you want without limitations!
2. Less Competition, More Sales
As a private label seller, you won’t have to worry about other sellers undercutting your prices, and you won’t have to compete with other sellers of the same brand.
This gives you a significant advantage in the marketplace, allowing you to sell your products without the fear of being overshadowed by other competitors. With less competition, you can attract more customers and generate more sales!
3. Enhance Your Listings
Amazon A+ Content, also known as Enhanced Brand Content, is a premium content feature only available to brands registered on Amazon. With Amazon EBC, you can customize your listings with multimedia content, including videos, images, and detailed descriptions. This can enhance the user experience and improve your chances of converting shoppers into customers. With EBC, you can take your listings to the next level and stand out from the crowd!
Cons of Selling Amazon Private Label Products
While selling private label products on Amazon can be a lucrative business, it’s not without its drawbacks. Here are some of the cons you should consider before embarking on this journey.
1. Upfront Capital Investment
One of the biggest challenges you’ll face as a private label seller is the upfront capital investment required to get started. Manufacturers often require bulk orders, and in order to be competitive, you’ll need to keep your product costs low.
This means you’ll need to invest a significant amount of money upfront, often several thousand dollars, to get your private label off the ground. So, before you start, make sure you have the financial resources to make this long-term investment.
2. Standing Out from the Competition
Creating a private label brand that stands out from the competition is easier said than done. Branding your product and building a customer base takes a lot of hard work and dedication. With so many other private label products on Amazon, it’s not easy to make your brand stand out. You’ll need to put in the time and effort to create a unique selling proposition and market your product effectively.
3. Risk of Failure
When you invest a significant amount of money in product purchases and branding, there’s always a risk that your private label won’t take off. Unlike an established brand, there’s no guarantee that customers will be drawn to your product.
In these cases, you may end up losing more money than if you were a regular seller. So, before you start selling private label products, it’s important to weigh the risks and rewards carefully.
Getting Started With Private Label on Amazon in 2023
If you’re looking to start your own online business, Amazon’s Fulfilled-by-Amazon (FBA) program is a great way to sell private label products. Here are the important steps to get started.
Step 1. Make a list of product ideas
When it comes to generating ideas for private label products, inspiration can come from anywhere. Here are a few ways to come up with new ideas:
- Look for trending products: Keep an eye out for hot new products in stores, especially those that haven’t made it to larger retailers like Walmart and Target. For example, you might see a unique set of measuring cups in a store like Anthropologie and realize it could be a great product to sell.
- Check out Amazon: Take a look at Amazon’s categories and subcategories to find new products. Pay attention to the “Hot New Releases” column and look at what other sellers are offering on their storefronts and product listings.
- Browse the web: Social media is a great source for finding new and viral products. You can also check out crowdfunding platforms like Kickstarter and IndieGoGo for innovative product ideas.
Step 2. Choose the right product
Choosing the right product is crucial when it comes to selling private label products. The product should meet specific criteria to ensure that it’s profitable and easy to sell. Here are a few things to keep in mind:
- Small and Lightweight: Choose products that are small and lightweight so that they fit into a small, flat-rate box and weigh no more than one or two pounds. This will help you save on shipping costs.
- Non-Seasonal: Avoid seasonal products like Christmas lights or winter clothing because their sales are dependent on the time of year.
- Unregulated: Certain products like food, toys, and batteries come with “red tape” that can make selling that product difficult. So, stick to items that don’t require a lot of legal paperwork and/or certifications.
- Uncomplicated: Avoid products like electronics or clothing, which may require you to have multiple colors and sizes for a single SKU. These products can lead to headaches and customer service issues.
To learn more, you can check out our guide “10 Tips to Find Best Selling Products on Amazon”.
Step 3. Do market research
Market research is essential when it comes to selling private label products. You need to know whether there is demand for the product you want to sell, and whether the competition is too high. Here’s how you can do it:
- Use Jungle Scout’s Chrome Extension: Jungle Scout’s Chrome Extension can help you research products for you instantly. You can search for your product idea on Amazon.com, and the extension will show you the average monthly sales and reviews for the search’s results.
- Check the Criteria: Personally, I prefer products that sell an average of 250 – 400 units per month. Also, make sure that the average number of reviews for a product is less than 100. This will give you an idea of the competition and whether there is demand for the product.
Step 4. Find a supplier
Once you have a product idea in mind, it’s time to find a supplier who can manufacture it for you. Alibaba is a great resource for this, as it allows you to purchase wholesale and bulk products directly from overseas manufacturers.
To get started, create a buyer account on Alibaba.com and search for your product. When you find a product listing that matches your private label idea, send a message to the supplier requesting more information. I recommend reaching out to 3-5 suppliers and ordering a sample from each one. This will help you compare quality and pricing before making a final decision.
Learn more about how to find wholesale suppliers for Amazon FBA.
Step 5. Customize your product
Since you’ll be selling a private label product, you’ll want to make it stand out from the competition.
One way to do this is by customizing the product design, such as adding your own logo or changing the color. If you’re not skilled in graphic design, you can find affordable designers on freelance sites like Jungle Market.
Additionally, consider improving the packaging to create a better customer experience. You can even use the packaging to market your brand by including your website URL or other helpful information.
Step 6. Decide your fulfillment strategy
Once your products are manufactured and ready to sell, it’s time to think about fulfillment and shipping. Many sellers use Amazon’s Fulfillment by Amazon (FBA) service, which handles storage, picking, packing, and shipping of your products. FBA also provides customer service for your customers, making it a convenient option for many sellers.
However, you can also fulfill orders yourself if you prefer. This might involve storing inventory in your own garage or warehouse, or using a third-party fulfillment center to ship your goods.
Step 7. Choose a manufacturer
Now that you have done your market research, designed your logo and packaging, and have an understanding of Amazon’s fulfillment process, it’s time to select a manufacturer.
It’s crucial to reach out to multiple manufacturers, around 3-5, and request product samples. This process will help you assess the quality of the product, the supplier’s communication skills, and shipping times. Quality and communication are more important than the cost of the product. Remember not to select a manufacturer just because they have the lowest cost.
Once you’ve decided on a manufacturer, you can arrange payment through PayPal or Alibaba’s Trade Assurance to ensure safe and secure transactions.
Step 8. Create an Amazon listing
The manufacturer typically takes 4-6 weeks to create your product and deliver it to you or the nearest Amazon fulfillment center. This period is perfect for creating your Amazon listing.
When creating an Amazon listing, make sure everything is ready to publish and launch in advance. High-quality product photos are a must, and if you don’t have the photography skills, consider hiring a professional. You can find quality photographers on Jungle Market.
Your Amazon listing’s title is one of the most important elements of the listing. It’s what helps Amazon determine where to display your product in its database. Therefore, ensure that you use relevant keywords in your title. If you’re selling “copper measuring cups” and want to rank for that keyword, be sure to include “copper measuring cups” at the front of the title. After that, use your secondary and tertiary keywords that you want to rank for.
Incorporate your product’s strongest features and benefits in the product description field and bullet points. These features and benefits will help customers make purchasing decisions when they visit your page. The more your private label product meets their wants and needs, the more likely they are to buy.
To learn more, you can read our guide “How To List Products for Sale on Amazon”.
Step 9. Boost your Amazon sales with Amazon PPC and A/B testing
So, you’ve got your private label product listed. But, are you doing everything you can to boost your sales? Even if you’re using the “set it and forget it” method, it’s worth checking that your product listing is performing its best.
Thankfully, Amazon’s internal advertising system, Amazon PPC, is here to help. With Amazon PPC, you can bid on “sponsored ads” that can get your product listed on the first page of search results, on remarketing ads outside of Amazon, and even on your competitors’ product pages.
To make the most of this system, you can run reports on Amazon Seller Central to find out the best selling and converting keywords to bid on via PPC. Plus, Jungle Scout’s Keyword Scout tool can give you an insight into your competitors’ keywords that are driving sales.
It may take a bit of tweaking and adjusting your bids, but after a few weeks, you can potentially double or triple your Amazon sales! Once you’ve got the hang of Amazon PPC, you can use other tools to test and refine your product listing.
A/B testing (or split testing) is a great way to see what works and what doesn’t. With split testing, you can run two concurrent tests featuring small changes to your product listing, such as the main image or price point. Then, tools like Splitly can help you analyze and determine what’s working and what’s not.
You might be surprised to learn that images and titles that you thought were bringing in sales were actually hurting your sales. So, take the time to test and refine your Amazon FBA private label product listing, and you’ll be sure to see better results!
3 Tips for Selling Private Label Products on Amazon
Selling private label products on Amazon can be a profitable business venture if you know how to do it right. Here are three tips that can help you maximize your profits and stand out from the competition.
1. Use Amazon FBA
If you’re selling private label products, using Amazon FBA (Fulfillment by Amazon) can save you time and reduce your risk. Amazon FBA will handle your inventory, shipping, customer service, and returns, allowing you to focus on growing your business.
While you can fulfill orders yourself, using Amazon FBA is a better option if you want to streamline your business operations.
2. Optimize your price
Setting the right price for your private label products can be a challenge. Pricing too low can hurt your profit margins, while pricing too high can lead to slower sales and negative customer reviews. To set an effective price point, research your competitors and understand the demand for your product.
Aim to keep your price point within 20% of your competitors’ average sales price. Instead of pricing your product lower than your competitors, find ways to make it stand out through better design, packaging, and customer service.
3. Create a branded product
Creating a branded product can increase your chances of success on Amazon. One way to do this is by creating a logo and color scheme for your private label brand. When choosing your brand elements, avoid blindly following trends and aim for a unique design. Identify two or three main brand colors and stick to them. Keep your logo and font simple and minimalistic.
Additionally, customize your packaging to include your branding elements, such as your brand name, product name, photograph, manufacturing details, and legal information. Creating a branded product can help you stand out from the competition and build customer loyalty.
- Learn more about how to build a brand on Amazon.
Final Thoughts
Running a successful private label requires a lot of hard work, innovation, and dedication. But if you do it right, you could end up becoming your own boss and creating a massive e-commerce empire!
One great way to kickstart your brand is by running PPC (pay-per-click) campaigns early on. By marketing your private label from the get-go, you can draw in organic traffic and start building a loyal customer base for the future.
Remember, building a private label is not a get-rich-quick scheme. It’s a long-term investment that requires patience, persistence, and a willingness to take risks. But with the right mindset and marketing strategies, you can turn your private label into a thriving e-commerce business.
For more guidance, sign up for my online business coaching.