When it comes to the various business models that fall under the umbrella of eCommerce, private label is the most well known one. It is a model that requires more focus and planning than many others. However, it’s the model that can potentially pay off the most.
Starting a private label business on Amazon means that you create your own brand, source your own line of products and sell them on the platform. This is the route that most Amazon sellers take and it’s not something that was easily available in the past.
How to start selling private label items
Step 1 – Product research
This is the first and the most crucial step. It is imperative that you don’t rush this one AT ALL. Other steps can be time sensitive. However, in this case, you should not move forward until you are confident that you have found the right product to sell.
Product research can be done a few different ways. You want to find items that are already selling well (which shouldn’t be that hard to find). You can browse Amazon, especially sections like Movers and Shakers or the Bestseller pages.
You can read the latest Amazon trends report or even use free online tools like Google trends. However, if you want to get the best results, you should use specialized Amazon market intelligence tools like the AMZScout pro Chrome Extension to check your product ideas:
This tool allows you to see beneath the veil of every page on Amazon. You can view crucial information like sales volume and estimated monthly revenue of every product, the age of the listing, and the number of reviews.
Basically, this tool shows every single bit of available information that you need in order to make the best decision possible. You can also examine charts that show you the sales and price history of any item:
There are also helpful scores such as an individual score for any individual search as well as a group score for the entire page of search results called a “nioche score”.
Here, you can access a breakdown of how difficult it would be to enter a niche and what your approximate chances of success are. This way, you can have an idea of the situation in terms of supply and demand and about the unique circumstances surrounding a niche you are interested in.
There are also a few criteria you would be wise to stick to as a first time private label seller, besides the high demand and low supply which you can see with the tool:
Size and weight – Try and find products that don’t weigh more than 2-3lbs and that don’t take up too much space in order to save on shipping costs.
Evergreen – You want to find a product that is not subjected to any seasonal trends.
Margins – You don’t want your manufacturing cost to be more than 25% of your selling price
No moving parts – Avoid sourcing products with mechanical or electrical components.
Step 2 – Find a supplier
Once you find a product that meets your criteria, it’s time to find a supplier that can make it for you. Most sellers choose to go to Alibaba.com to look for suppliers. Odds are, this is where you will find exactly what you need.
You can ask for price quotes and negotiate with potential suppliers. As a private label seller, you need to find a supplier that will print the product packaging with your logo and design as well as customize it and place it on your product as well.
Step 3 – Register on Amazon and fulfill your orders
Once you find your product and your supplier, you need to register on Amazon before you can order your first batch of products. The registration process is fairly easy and straightforward. All you need to do is to input your personal or company information along with your credit card details.
At this point you need to figure out if you wish to sell using the FBA system or not. There is an advantage to fulfilling your own orders, which is that you don’t have to pay Amazon storage and Fulfillment fees.
On the other hand, unless you have your own facilities or a better way to fulfill your orders, it’s best to stick with the FBA. If you wish to see what the difference is between the two models, you can use this free tool to easily calculate the fees for any product.
Step 4 – Create your listing
Once your first batch is incoming, it’s time to put together your listing. You need to perform proper keyword research and include all of the relevant keywords that you can find in the copy of the listing.
It’s also very important for the listing to find a fine balance between actually writing a compelling copy and including those keywords This is not easy to do and it can have a significant impact on your potential sales.
You should also ensure that you have high quality product images. If you are having trouble putting together a well rounded listing, hiring professional help is something to seriously consider.
Additional tips for a good start
Start with aggressive PPC and promotion:
Amazon has one of the best internal marketing systems and promotion is a proven tool of the trade of a successful Amazon seller. This is something that needs to be worked on continuously.
However, at the start you should be even more aggressive than you usually would be. You need to start getting organic rankings for your product, and there is no better way of doing that than with PPC.
To begin with, don’t focus too much on cost efficiency. Just focus on getting sales. Once orders start coming in, you can always adjust strategy over time. If you can afford it, you can also invest some money on off platform promotions using social media marketing or Google adwords so that you can get established more quickly.
Join the Brand registry: The brand registry is basically a partnership with Amazon. Any private label seller has the option of joining. You need to meet a few conditions first. The most important condition is that you have a registered trademark on your brand.
Sellers used to have to wait for months for registration to complete, but now Amazon will let you into the Brand registry by simply showing proof that you have submitted a trademark for registration.
As a registered brand, you receive a lot of benefits such as the ability to customize your listings and storefront to a much greater extent as well as access to more PPC tools.
In conclusion, starting a private label business on Amazon is not at all difficult. What can be difficult is finding the right product and the right supplier as well as making smart movies to facilitate growth.
However, what makes selling on Amazon attractive is the fact that Amazon can take on all of the heavy lifting while you can focus on sales and promotion. With a bit of creativity and diligence, you can create your own success story on Amazon. Good luck sellers!