To sell a private label item through Amazon means that you select an existing product, purchase it at a discount, and sell it under your own brand name on Amazon.
The process of selling private label products on Amazon requires a fair amount of research. Amazon is huge, which gives you a wonderful built-in audience, but it also makes it difficult to stand out.
Doing your research gives you an opportunity to study the marketplace and choose a product you believe you will be able to sell. Private label selling is a great business to get into because it requires little start-up capital. It is a business where investing time in research before you dive in pays in dividends later.
Once you have some ideas of the products you would like to sell, you will need to find suppliers. You will contact manufacturers to discuss price and minimum orders. You will purchase the item in bulk and package it under your own brand to sell.
Depending on the product and manufacturer, you may be responsible for branding the product or they may do it for you. Either way, once the product is ready to go, it is shipped to Amazon for fulfillment.
If all of this seems overwhelming, don’t worry. To sell private label products on Amazon you will need to establish a sellers account there. Once there, you will have access to a variety of marketing tools developed by Amazon, as well as access to their shipping program, which keeps your costs under control.
What Type of Time Commitment Is Involved?
Selling private label products on Amazon is an ideal side hustle. Done right, you may find yourself thinking of quitting your full-time job, but you can get started by doing the work in bits and pieces of free time through the day.
Before you start selling, you will need to spend time selecting a product and then finding a supplier.
The launch process comes next, and, while time-consuming, you are sure to find it rewarding. A well-thought-out product launch can help your business get off the ground quickly.
Once you launch your product, you can expect to spend time offering customer service solutions and maintaining inventory.
What is Involved in Maintaining Inventory?
Don’t be complacent once you find a supplier, always be on the lookout for comparable products at a better price. Even if you are satisfied with your supplier, keep your eyes open.
If you want to have success as you sell private label products on Amazon, you have to continually adapt to the marketplace. As your business grows you will likely want to expand your product line.
You will need to keep an eye on your stock at Amazon. Keep in mind how long it will take a new order to reach Amazon once you place an order from your supplier.
When you sell private label products on Amazon, it is important that Amazon doesn’t run out of your product. If they run out of inventory, the time you have spent on marketing and getting your product listed will be lost.
Depending on the deal you have with your supplier, you may also need to prep and package your items for shipment to Amazon.
Deciding What To Sell
There are several things you will need to take into consideration when selecting a product to sell as an Amazon private label product.
You will purchase the items up-front for reselling, so the first limiting factor will probably be your budget. Other determining factors include the availability of the product and how competitive a particular niche is.
Is There Risk Involved in Private Label Selling Through Amazon?
Nothing is without risk, but there are absolutely ways you can minimize your risk while still starting a successful Amazon private label business.
1- Don’t invest in expensive items for reselling. There is a sweet spot of between $15 and $40 dollars that make an item an attractive purchase on Amazon.
If you are going to sell private label products on Amazon, you need to choose what your research indicates will sell rather than what you find most unique or fascinating. That is not to say you can’t sell higher-end goods. Just starting out, however, you can minimize your risk by selecting products that will sell in this price range.
2- Sell more than one item. It makes sense to start by offering one item. This allows you to walk yourself through the Amazon private label selling process. This process, which includes acquisition, marketing, and fulfillment, does have a learning curve. Better to work out any kinks on a smaller, rather than large, scale.
Your goal, however, should be to have more than one item under your private label brand. Spreading your investment across several products allows you to minimize your risks if one of your choices ends up being unpopular.
How Much Can I Make?
It is impossible to determine. It is entirely feasible to make enough to replace your full-time income. Some people hire employees to help with their business. The beauty of selling private label on Amazon is that you can scale it to fit your needs.
How Do I Decide What To Sell?
Selecting a product to sell is the first and probably the most important step in starting your own Amazon private label business. There are a variety of ways to come up with the best products for you, but a good place to start is right at Amazon.
If you are planning to sell through Amazon, it makes sense to use their tools to determine what might be a product for you to offer.
Once you have some general ideas about the types of products you may want to sell, use Amazon’s bestseller lists to help narrow down your selection.
These lists are geared toward consumers, not sellers, but it gives you an intimate view of what people are looking for and buying on the site.
Look at variations of the different products you are considering. Do they sell well?
Even if you think there is a market for a particular item, if it isn’t anywhere to be found, there is probably a reason for it. Maybe it just isn’t something people typically buy online, maybe it isn’t readily available for wholesale purchase, or maybe the wholesale price isn’t low enough to allow it to be sold for a profit competitively.
While looking at the top-100 rankings on Amazon, keep in mind the three things that make something a good Amazon private label choice:
- High-ranking (You want to sell something people want to buy)
- Lightweight (This keeps your shipping costs under control)
- Generic (Allows you to easily create your own brand)
Study the Competition
There is no reason to reinvent the wheel. Part of the preparation process is to study what your competitors are doing, emulate what they are doing right, and improve on points where they are lagging.
Do an Amazon search on the product you are considering selling. Look at the top five listing. You want to make note of the price, how many reviews the product has, what the Amazon selling rank is for the product, and your general impression of the listing.
What to look for in a product?
Ideally, the average price will be in that $15 to $40 sweet spot. Look for a product were the best sellers are ranked below 1,000 to 5,000 BSR depending on the category. Products with few reviews offer an opportunity to get your product noticed, as do products with poor to average quality listings.
This part of the process can be monotonous, and it may seem like you will never find a product that meets all of your criteria, but they are out there. Taking the time now to find a product that allows you to stand out in the marketplace is time well spent.
Fill Existing Gaps
One way to make your business a success is to have a product that fills a unique gap in the market. Take a look at the products you’ve studied. Scroll down to the reviews. Start reading.
Some people find a problem and reason for complaint about everything and you’ll learn quickly how to spot and ignore those. Instead, read the reviews that look reasonable and well thought out.
- Are there common complaints?
- Mentions of something that could be a little better?
- Disappointment about how something appears in the ad versus what is advertised?
These are important. Use these facts to fill the gap, whether it is purchasing a slightly different product, paying close attention to how your item is photographed, or being certain to include full measurements in the listing.
By far the easiest way to find the perfect private label product to sell is to use a tool such as Jungle Scout. This tool is used by over 100,000 Amazon sellers to help them find profitable products to sell. If you want to save time and have that extra security that you have analyzed a product properly, Jungle Scout is the tool to use.
Once you have an idea of what you want to sell, it is time to find a supplier for your product. For some items, such as supplements, it makes sense to source from the US. For the most part, however, you will probably find the best deals overseas.
International suppliers, such as Alibaba, have an established history of working with US-based sellers. They are familiar with the process of shipping to the US and are easy to work with.
Once you are on the supplier’s website, search for the item you are considering selling. You will probably have plenty to choose from.
Narrow your choice down further by style and minimum order required, how much lead time they require, and private labeling options.
Often the minimum orders and prices are not set in stone. Once you have decided on a product, contact the supplier to see if you can negotiate a smaller minimum or a better deal.
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Create Your Brand
This is your chance to really make the product your own. You will want a logo and packaging. You can let your creative juices flow for this or hire someone from an online freelance site such as Fiverr to do the work for you.
Some suppliers also have templates that allow you to personalize your product.
Regardless of how you decide to develop your packaging and branding, it is important that it looks professional, unique and allows you to set yourself apart from the competition.
Time to List
While every step of the private selling process is important, crafting a great listing is really something you should devote energy to. Your private selling success depends on your ability to attract customers in a crowded marketplace.
What Makes a Listing Stand Out?
- The use of multiple, high-quality images.
- A well-written description that answers any questions a potential buyer may have.
- A clear explanation of how the product works.
- Details about why this product works, what sets it apart from the competitors, and what problems it solves for the buyer.
Use formatting to your advantage. Amazon has particular things they do and do not permit in their listings.
You can, and should, use bullet points and bold text to draw attention to certain details. It is important, however, not to overuse these attributes. You want your listing to look professional.
Creating a Winning Product Listing
There are two things to remember when you are writing your listing.
- You are writing for your customer.
- You are writing for the search engine.
These two groups do not necessarily want to see the same thing.
The trick is to create a listing that gets good search results while at the same time is an effective marketing tool for your product.
Start With the Title
This is arguably the most important part of the listing. A good one may be enough to get buyers to hit that one-click shopping button, but you at least want to make sure they keep reading.
Amazon allows you between 150 to 250 characters for the title. Use those wisely. There is no reason to use the first thing you come up with. Try a couple different phrasings to see what sounds best.
You should know that the title may be truncated in search results, so be sure to start with the most important information. This is important so people will know what your product is even if they just see the first few words.
You want to be sure to include several of your strongest keywords in the title. You also want to provide enough interest to get customers to click through to read your full listing.
Don’t make the mistake of being so concerned about keyword placement that your title does not make sense. Readability is important to attract customers. If the title (and description) reads poorly, customers will be skeptical of your brand.
Choosing the Right Keywords
There are plenty of tools available to help you decide what keywords will work best for your product. Merchant Words, Simple Keyword Inspector, and Google Keyword Planner are all popular choices that allow you to find keywords related to your product as well as their estimated search volume.
A more low-tech way to come up with keywords is to begin typing one of your keywords into Amazon’s search bar and check the recommended search terms that you find listed below.
Pictures Are Important
It is important not to underestimate the importance of quality photographs. Including multiple clear, well-focused pictures in your listing can mean the difference in getting someone to click through and them continuing to scroll.
Clear, well-thought-out pictures can be the difference between making and losing a sale. Take advantage of your ability to add photos to your listing by including as many excellent, sharp photos as Amazon permits for your category.
It is important to follow Amazon’s rules for photographs to keep your listing up and active. The main image needs to be a photograph of only the product you are selling in front of a white background.
Aside from your main photograph, you can include additional pictures in your listing. This is your opportunity to get creative and show your product in use. Also, include pictures of your product from different angles.
While it is better to have fewer, high-quality images than to include pictures that are blurry or confusing just to fill space, it is best to use all the photography slots permitted, and it is well worth your time to sharpen your photography skills if you want to sell private label products on Amazon.
Pictures to include:
- Different views of your product
- Your product in use
- Close up of any labels or tags that may be useful to buyers
- An informational image that compares it to its competition or provides other valuable data
- A picture of the product being held, so its size as compared to a human hand is obvious.
Keep in mind that pictures must be at least 1,000 pixels square for the zoom feature to work. This is the feature that allows customers to enlarge the image by scrolling over it. This is a popular feature with buyers and one you should take advantage of.
Drill Down To the Most Important Facts
Your Amazon listing can have five bullet points. Use these to describe the five most important features of your product. Try to think of potential questions a customer may have and reword it to a statement that addresses the issue.
Each bullet point should use two to four sentences that expand on one benefit or feature of the product. Keep each point concise and on target.
Write Your Description
You may feel that there isn’t really much to say after writing the descriptive title and well thought out bullet points, but you need to spend just as much effort crafting your product description.
This is the time to detail the product more fully. Ideally, your description will answer any questions a potential buyer may have.
You can use basic HTML to draw attention and to make the description more appealing and easier to read. This includes bolding and italics, quotes and line breaks.
Take Advantage of Enhanced Brand Content
Enhanced brand content is available through Seller Central. It allows you to boost your product description area with comparison charts and additional photographs and written copy.
The Importance of Reviews
Do not underestimate the importance of reviews in selling online products. When a customer cannot physically touch the object, reading reviews become more important. There are a few things you can do to maximize your reviews on Amazon.
The most important step is to select a quality product. Don’t sell a substandard or cheaply made product just to increase your profit margin. Also, don’t think that your customers will appreciate the fact that they saved a few dollars on your product if it breaks the first time they use it.
Remember, you can comment on any comments in the reviews. Answering questions and addressing concerns is a good way to improve your reputation as a seller, and will give potential buyers more confidence in your product.
The importance of reviews cannot be overstated, but actually getting them can be a challenge. Amazon does not permit you to offer incentives for reviews, so you are stuck depending on the kindness of your customers.
There are a few ways you can let your customers know that you would appreciate reviews and encourage them to do so.
Use a Product Insert
When deciding on your packaging, consider adding a small insert thanking the customer for their purchase and asking them to please leave a review.
It is important to remember that your products go to Amazon ready to be packaged for the customer. Amazon warehouse workers will not include an insert for you, so depending on how you package your product, this may not be an option.
Use an Email Follow-Up
In this process, you can ask for a review immediately following the order, or a predetermined amount of time later. You can also use a series of emails requesting the review. You do want to be careful not to cross the line into spamming, or you may not be happy with the review that you receive.
Offer a Quality Product
Regardless of the methods you use to garner reviews, the easiest way to make sure that your product receives positive reviews is through offering a well-made product, providing excellent customer service follow up, and having the product priced reasonably.
It is worth noting again, that you cannot offer any sort of incentive or compensation for reviews on Amazon. Doing so will jeopardize your account entirely.
Questions and Answers
If someone posts a question about your product or listing, answer as quickly as possible. Don’t leave other customers with the responsibility of answering questions intended for the seller. Even if the answer is clearly visible in your description listing, answer the customer’s question in a professional manner.
Managing the Backend
When putting together your listing you will find a search terms section on the back-end of the site. This is not visible to customers. This is where you enter terms to help search engines find your site.
Only the first 250 characters will show in the search engine results. Some things to keep in mind:
- You need a space, but no comma, between words.
- Use both singular and plural forms of a word, but no need to use the same word more than once (as part of a phrase, for example).
- The end result should be a group of related words, not phrases or sentences.
Your first sale will probably be your hardest. You can increase the speed that you get your business off the ground by working on some details pre-launch. Without reviews or returning customers, you need to do something to attract buyers.
One way to attract customers is to offer a discount during your launch. Lower price equals lower risk, and seeing the item on sale can give potential customers the motivation they need to make their move.
Use Amazon’s Resources
There is no reason you need to do everything on your own. Once you set up your Amazon merchant account, you will see that they have an internal advertising system. This allows you to pay to improve the visibility of your product in on-site searches.
You can also work with off-site promotions, such as Google AdWords, to bring you traffic. There are other ways that you can bring traffic to your product as well. With Amazon private label selling, you can be as active or as passive as you want in the process.
Let Fulfillment By Amazon Take Over
Amazon private label selling allows you to use Fulfillment By Amazon to fulfill your orders. That means, once you have done the preparations and provided Amazon with the product, your work is complete. Amazon will pick, pack and ship your orders.
There is a fee associated with Fulfillment By Amazon, but you are more than compensated by the benefits of the system. In addition to having someone else manually fulfill the order, your product is also eligible for free Prime shipping.
While there is no official confirmation on this, Fulfilled By Amazon products also seem to rank higher in search results than non-FBA listings.
When you use Fulfilled By Amazon, they will also take care of customer service issues and returns, allowing you to be hands-off in that process.
What Can You Expect to Earn?
There are too many determining factors to say for sure how much money you can expect to make. Your product’s price point, the amount you spend on advertising, and your branding and packaging expenses all play a role in your profit.
Some general numbers to keep in mind when setting your goals:
Products ranked in the top 100 often result in thousands of dollars worth of sales each day. Products in the top 500 generate hundreds of dollars of sales daily. Even getting into the top 3,000 can provide you with a steady income.
When you own your own business it is important to get a realistic idea of how much money you are actually making. In the beginning, you may find you are turning around and putting all of your profits back into your expanding company. That is great and is a wonderful way to finance growth, but you still need to keep track of your costs, so you know how much you are actually making.
Taking into account the unit price of your item, the cost of packaging and logo for the item and a percentage of any money you spend on advertising aim for a profit margin of at least 50 percent.
Amazon private label selling is a great way for the average person to start their own business.
You can get started with a small initial investment, and scale your business as you become more comfortable with the process. With Amazon taking care of fulfillment, you are free to expand your product line and branding.