Amazon has opened up a new way for independent sellers to make money – through private label products. For independent sellers, private labeling presents them with an opportunity to create a unique, authentic, and profitable brand. While all of this sounds straightforward and easy, it takes a lot of effort and research to create a successful Amazon private label.
What Is an Amazon Private Label?
Private labeling is a straightforward concept. You purchase products from a manufacturer but label and market them under your own brand. For example, Amazon does not manufacture the products they sell but simply sources them from trusted manufacturers. The e-commerce giant then markets them under their AmazonBasics brand.
Private label provides Fulfilled by Amazon (FBA) sellers a fantastic opportunity to create their own trusted brand without worrying about manufacturing, logistics, and customer service. You only need to find a unique product and a reputable supplier!
Developing a Private Label on Amazon
To be clear, creating a private label takes time and effort; time to establish a brand and to start seeing tangible results. A private label is a long-term investment, and if you don't do your research, you might as well be throwing money away.
If you're trying to establish a private label, the first thing you need to do is create your Amazon seller account. You'll have two options when creating an account:
Individual Seller Account
An individual account is free; however, you'll need to pay a commission of $0.99 for every earned sale and a 15% consolidated fee on those sales. The only downside to this option is that you can only sell 40 products. An individual account is ideal when you're not planning on selling more than 40 products, which isn't the goal for most upcoming sellers.
On the other hand, a professional account will require you to pay $39.99 every month, along with some extra referral fees and closing fees. You will have to pay Amazon a fixed price for each sold item, and you can sell more than 40 products. Since you are just starting out, we recommend starting with an Individual Account before you actively begin selling. Once you begin gathering momentum and your products are ready to ship, you can upgrade to Professional Account.
Note: You'll need a professional account before being able to request approval to sell restricted products.
Research Similar Product
Success on Amazon as an independent seller depends on your ability to pinpoint niche markets and develop a great product. Identify what customers are looking for and make sure the market for your product is not saturated. Amazon’s list of best-selling products is an excellent place to start. The goal is to find a niche, high-demand product. We recommend using SellerApp’s product ideas feature to see what‘s trending in real-time.
Picking a Product
When it comes to private labeling, consider the following when picking a product:
Size and Weight
Ideally, your product should be small and lightweight (less than 3 pounds). This helps you save tremendously on shipping costs.
Generic and Unregulated
Since you won’t have the option of selling any product on the platform, keep your products generic. Some categories require approval from Amazon before you can list and sell them. Make sure your chosen product is permitted and generic to avoid restriction-related issues.
Ideally, you want to sell products as low as you can but not too low - between $15 to $50. When it comes to expensive products, customers are more likely to go with a trusted brand. So anything over $50 might not work out well for you.
Identify the Competition
Once you've chosen your product (or at least the idea), it is time to analyze the competition. Keep an eye out for these competitors - how they are performing and how much sales they generate. To do this, open the top five products and carefully review each listing.
- Look for keywords that describe the product and check how your competitors leverage them to their advantage.
- Pay attention to product ratings and customer feedback, especially negative reviews. These will help you identify holes in your rival's products. You can solve these issues with your new and improved product.
Get a Reliable Supplier
Finding the right supplier is more accessible than you think. A quick google search should give you a world of options to choose from. Simply pick the best and get in touch with them. We recommend you contact different suppliers so that you can find one with the best prices. Also, make sure that the ones you've chosen permit private labeling.
Once you have your product and supplier, feel free to negotiate. We'll let you in on a little secret; when discussing your contract, act like you've done this before so that manufacturers think you're an established seller. Keep communication simple and to the point.
Develop a Fulfillment Strategy
Amazon gives you the option to delegate the logistics in-house (for a price) or choose to ship packages yourself. We recommend enrolling in the FBA program if you're building your private label. Once you do that, all you need to do is make sure your products get to Amazon's warehouse. Amazon takes care of the rest (storage, packaging, shipping, and customer support). While this service will cost you, it is definitely worth the money.
Create Your Brand
Once you've come up with your brand name, created a memorable logo, and settled on your brand hues, move on to packaging. While you have the option to outsource it, we recommend customizing your packages. This will help you stand out from the crowd with a touch that is unique to your brand. Make sure you have these details in your packaging:
- Brand name
- Product name
- Product photograph
- Manufacturing specifications (where it was made)
- Legal information
Note: Take the necessary time to create your brand elements and packaging before listing your product on the platform.
List Your New Product
You hit every mark, everything looks good, and you’re ready to ship. Now is the time to list your product on Amazon. A great product listing is essential to drive traffic and generate substantial sales. Visibility on Amazon depends on your ability to use keywords and the media to build a prosperous and detailed product listing.
What makes a product listing great? For starters, make sure your product listing includes these 4 main components:
- Product title
- Photographs and videos
- Product price
- Description of your product
Be original while targeting keywords with high search volumes. Use visual content to help your listing stand out and include any relevant information to help you connect with your customers.
There you have it! You're an Amazon private label seller. Now get out there and sell some great stuff. Be aware, you need to be on constant alert and constantly expand your brand and your offerings. You will also need to consider the fact that your products need formulating, manufacturing, and packaging before hitting the market. Managing a private label is not easy work. We recommend you run PPC campaigns early on to launch your brand on the right foot. Kick-starting your private label brand early-on is crucial to draw organic traffic and build a lasting customer base.