Amazon Private Label: Truly Building Your Own Business
I feel like Amazon Private Label is a poor choice of words, but it's what you guys are searching for so I have to use it. We've all witnessed Amazon Private Label and it's growing in leaps and bounds. Walmart is the master of Private Label. Essentially, they replicate a top selling product made by a name brand and sell it for a cheaper price.
This is why I don't like the term Private Label. I do not advocate replicating products and selling them for cheaper. Contraire mon frère!
For us, we find Private Label products to sell that are popular but may have some design flaws or materials weaknesses. We then improve upon these issues and sell the products for more, not less!
And that's where the differences end. From there, the fundamentals of how to Private Label products are similar. Here's the basic low-down:
- Perform Product Research On Amazon To Find Viable Products To Sell
- Contact Suppliers On Alibaba To Understand Their Capabilities & Pricing
- Buy Samples To Test Supplier's Product Quality
- Move Forward With The Highest Quality Supplier
- Place Small Test Order
- Import Products From Overseas To An Amazon FBA Warehouse
- Launch Your Product And Advertise
- Refine Product, Place Larger Order & Scale
Now, this is a perfect progression of how to Private Label products to sell on Amazon. And yes, there's a strong chance that you won't nail it on your first shot.
It's high risk, high reward. That's why, even though there are plenty of Private Label sellers on Amazon, not many of them stick around very long.
Want To Get Started With Private Label Products To Sell On Amazon? Check Out This In-Depth Case Study!
Why Amazon Private Label?
We've made the progression from Retail Arbitrage (RA) to Online Arbitrage (OA) to Wholesale to Amazon Private Label. As we've progressed, we didn't completely bail on the prior sourcing method. We merely refined our business model.
Private Label gives you the most control over your business. When you are reselling name brands bought via RA, OA or Wholesale, what it comes down to is who's getting the product for the cheapest price. That's all the control you have.
This is why the Amazon opportunity for RA/OA and Wholesale has rapidly weened, becoming a race to the bottom where profits are small.
With Amazon Private Label, you can control just about everything there is to control with the product. From the quality of your Private Label manufacturers to your unique marketing strategy, you have the ability to differentiate. Yes, a particular product can get saturated with other Amazon Private Label sellers. But, if you make your product unique enough, you can offset competitors that simply flood the market and try to undercut average pricing.
In short, it is the most long-term product souring strategy for Amazon FBA or any other eCommerce Marketplace.
Our Experience With Amazon Private Label
Although we started to sell Private Label products on Amazon back in the early days, it was more dabbling than anything. And we had moderate success. In fact, we still sell one of the first Private Label products that we ever imported from China.
But, it wasn't all glamour and glitz at first. We've spent a lot of money samples of different products that we never moved forward with. We even had a customs crisis where our one bath product was confused as a clock and held for inspection for over a month!
If you want to get into Private Label, you need to make short term sacrifices for long term gains. You'll also have to have a higher risk tolerance.
Over the years, we've always tried to stay a few steps ahead of the game. OK, we were enamored with Retail and Online Arbitrage, so that took away potential time and effort that could have been used on Private Label.
Nevertheless, as we've seen the Amazon FBA marketplace evolve, we could see that RA, OA and Wholesale would not be viable options long term. There's two reason why:
- Pricing: There's always, eventually, going to be a larger distributor that can get products cheaper than you can, effectively cutting you out of the market.
- Brand Enforcement: Brands have been cutting down hard on who can resell their products, where these products can be sold and how much they can be sold for. Look at products like Nike and Birkenstock.
Because of these reasons, we felt the urge to push harder for Amazon Private Label, where we were not subjugated to these kinds of risks. In 2016, we really started ramping up the number of Private Label products to sell on Amazon. Or should I say, developing our product lines and building out brands.
Now, in 2018 we have 2 very popular product lines which generate over 80% of our total sales and we are working diligently to increase our brand awareness. We even have a Shopify store featuring our Private Label products that receives traffic in the top 5% of all Shopify stores created at the same time as us.
As we've refined our sourcing method, we've refined our product lines and expanded to multiple marketplaces including: Amazon UK, Amazon Canada, Walmart, JET, eBay and of course, our own Shopify stores.
Look, Private Label isn't for the feint of heart. Yes, you get tons more control. But with that comes lots of responsibility. You need to be on top of everything from quality control to importing to packaging. And yes, negative reviews hurt the ego big time! These products become like your baby.
While it's definitely been stressful at times, it's also been very rewarding. And the one brand that we've really been working scrupulously on makes us excited to work on every day!
Where To Start With Amazon Private Label
Amazon Private Label comes down to three core processes:
- Finding Private Label Products To Sell
- Finding Private Label Manufacturers To Make The Products
- Getting Your Private Label Products To Amazon FBA
Finding Products To Sell On Amazon
The marketplace that is going to make you the most money with Private Label is Amazon.com. So that's always the best place to look for Private Label product ideas to potentially create on your own. If you don't know what to look for, I'd strongly suggest that you check out this article about Private Label Product Research.
Finding Private Label Manufacturers To Make The Products
Look no further than Alibaba.com when searching for Private Label manufacturers. Alibaba is the website where you'll find a manufacturer for just about anything under the sun.
Getting Your Private Label Products To Amazon FBA
We've gone the route of hiring each player in the importing process piece-meal to using "all-inclusive" Freight Forwarders. And I'd recommend the latter. While hiring a customs broker and freight forwarder all separately is a good learning experience, it can make the process cumbersome. And we haven't found it to be cheaper than hiring one company that handles everything for you.
While we do have a specific Freight Forwarder that we use to get our Amazon Private Label products from China to Amazon FBA, we would highly recommend checking out www.Freightos.com.
Freightos is a platform that aggregates all the Freight Forwarders and provides accurate shipping quotes in a matter of seconds. All you need to do is have the weight and dimensions of your shipment, plus it's origin and destination address, and you'll be on your way to getting accurate rate quotes.
This was not the case 3-4 years ago, so consider yourself lucky! And, the Freight Forwarders on Freightos specifically specialize in getting your goods from your supplier in China to Amazon FBA, whether that be in the United States, Canada or the United Kingdom.
Tools That We Use For Amazon Private Label
Amazon Private Label sellers should have no trouble finding tools that will help them improve their business. In fact, it's easy to get carried away with spending money on the newest, fancy tool that's going to catapult your business into super-stardom.
Yes, we use tools. But we review them monthly and ensure we are using the best ones, and are actually using them at all. Here's our list:
Inventory Lab: We use this to create Amazon FBA Shipments, track our profitability and determine the profitability of a product. Inventory Lab has a research tool that tells you how much you'd make on a product after Amazon FBA fees. It also has some nice variables like shipping cost by weight for your inbound shipment and sales tax. You'll also have a direct link to Camel Camel Camel to check sales history too. If you want a free solution to this type of Scout tool, use the Amazon Revenue Calculator.
Keepa (Chrome) (Firefox): Like Camel Camel Camel, Keepa shows you the Best Sellers Rank and pricing history of a particular product on Amazon. What Is really nice about Keepa is that it does it directly on the Amazon listing page.
Jungle Scout Extension: Don't know how to interpret Best Sellers Rank? Well, you're not alone. While we do have a good grasp of what it means, it's always nice to put context around what it means in terms of units sold and revenue. That's exactly what the Jungle Scout extension does. The extension shows you all the interpreted sales data right on the Amazon Search Results page or the Amazon product listing page. While there is also the Jungle Scout Web App for in depth product research to find Private Label product ideas, at minimum I'd highly getting the Jungle Scout extension.
AZoptimizer: This is a free suite of Amazon keyword research tools that is truly a one stop shop for researching keyword search volume and getting your Amazon Private Label products to rank for specific keywords. And yes, it's entirely FREE! I'd highly recommend checking this out. You got nothing to lose!
Feedback Genius: If you want to make it in the Amazon Private Label business, you'll need to have a sound follow up strategy to generate product reviews. Sending emails, although becoming more and more of a challenge, is a great way to generate reviews and, at minimum, show the customer that you care about their experience. Feedback Genius offers the most comprehensive and user friendly platform to email your Amazon customers after they have place orders. We can develop beautiful templates, track how many emails are sent and even our open rates. In addition, we receive alerts when negative feedback or reviews are left so we can be proactive in resolving issues with customers.
Ignite: Using Amazon Sponsored Ads to advertise your products is essential to get consistent sales on Amazon. But, it can get expensive and hard to manage all of the data points that go into it. Ignite essentially acts as your virtual Amazon ads manager for a fraction of the price of a real-life ads manager. Ignite will recommend how much you should adjust bids, determine if you should add or remove keywords and really get you on track to achieving your desired Average Cost of a Sale (ACoS).
JumpSend: Generating sales in the early stages of your Amazon Private Label product launch is vital to long-term success of your product. JumpSend is a platform that allows you to get your Amazon product promotions in front of thousands of potential buyers. You simply create an Amazon promotion, set up your JumpSend listing and disperse coupon codes to interested buyers. Each sale will help boost your Best Sellers Rank and give you another customer to target for leaving a product review.
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