How to Sell Private Label Products on Amazon
There have never been more opportunities to offer products through Amazon. You can sell your original creations. You can sell popular branded products. Most importantly, for this very guide, you are also able to sell private label products.
If you are a newcomer to the term “private label,” you likely have a few questions. What are private labels? How do you sell them on Amazon? Which products are the best fit for the platform?
Let us provide you with the answers.
What is a Private Label Product?
In simple terms, a private label product is something that you market as your own, but it was actually manufactured by another company.
You put your private label, aka brand name, onto an undistinguished product. This isn’t like taking a Samsung phone, slapping on your logo, and saying you made it – that’s called fraud. A private label is taking a generic product, preferably a great one, that you are legally allowed to promote under your brand.
For an example of a private label brand, look no further than Amazon themselves. Their Amazon Basics range is not manufactured in-house. Instead, they source items that are made by other producers. These products are then sold under the Amazon Basics name as an Amazon product.
What are the Benefits of Selling Private Label Products on Amazon?
Before learning how to sell private label products on Amazon, you need to know the reasons why you should go down this path. Here’s a quick summary of the benefits of selling private label products via Amazon:
Gain the benefits of selling on Amazon
If you are already based on Amazon, you will know about these benefits. Increased exposure is one positive, as is the added credibility gained from being part of Amazon. Another advantage is Fulfillment by Amazon (FBA). When Amazon fulfill your orders, you benefit from its delivery network and customer service.
No brand constraints
If you decide to sell products from different brands, Amazon has certain restrictions in place. The result: you may not be able to sell certain products on their platform. With your own brand, however, you can forget about these restrictions.
Utilize A+ content
On Amazon, A+ content opens the door to optimizing your product listings. You are given the opportunity to add multimedia content and extra detail to these listings, which leads to a higher number of visitors and conversions.
Fewer competitors to fight against
When you operate as a private label seller, you don’t have to go up against other sellers of the same brand products. Due to this, you can relax about continually checking if competitors are undercutting your prices, and consequently, stealing customers.
Just remember: a private label business is not always smooth sailing. The benefits are bountiful, yes, but you have to navigate a few rocky patches before you reach them successfully.
You need to invest a significant portion of upfront capital to get started with a private label. Bulk orders are demanded by manufacturers, which will leave you in the red for some time. Plus, the profit margins gained from each product will typically be low as you have to stay competitive on a busy platform like Amazon.
Setting up your own brand is a challenge. It is also a long-term process before you expect to see any money. Although if you are ready to jump a few hurdles, there can be lucrative rewards to enjoy.
How to Sell Private Label Products on Amazon
You have seen the pros and cons, and have made a decision: you’re ready to get up and running. When learning how to sell private label products on Amazon, the first tip is not to rush into the process.
We are always telling new clients the biggest mistake they can make is to try to run before they can walk. All it takes is the wrong product, the wrong market research, or the wrong angle for your private label dreams to go up in smoke – and with it, a hefty portion of cash.
If you have yet to get started as a seller on Amazon, you first must create an account on the platform. There are two seller account options on Amazon: Individual and Professional. Here’s a quick summary of the two:
Individual Seller Account
This account type is free for everyone to create and allows you to list up to 40 products. The downside is that a commission – in the form of $0.99 – is applied to each Amazon sale you make. Furthermore, a 15% consolidated fee is applied to your sales. You also cannot gain approval for any products found within restricted categories.
Professional Seller Account
This account type is free for everyone to create and allows you to list up to 40 products. The downside is that a commission – in the form of $0.99 – is applied to each Amazon sale you make. Furthermore, a 15% consolidated fee is applied to your sales. You also cannot gain approval for any products found within restricted categories.
Our recommendation is to first start out with an Individual Seller Account. This helps to save money as you get up to speed with the platform. Once your products are all listed on Amazon and ready to ship, switch over to the Professional Seller Account to maximize results in the long run.
Either way, you only need an account to get started on your private label journey.
What are the Best Private Label Products to Sell on Amazon?
That is the million-dollar question.
If everyone knew the best private label products to sell on Amazon, everyone would be making stacks of cash with ease. However, there is no single answer to the question. It is on a case-by-case basis and it is dependent on various factors such as trends, industries, profit margins, and competitors.
Although we can’t tell you the best private label products to sell on Amazon, we can tell you how to zone in on a great product – that is through ample product research.
How to Research Private Label Products to Sell on Amazon
Although research is not the most exciting part of the process, it is the most important. Product research provides you with a foundation, and the strength of this foundation is dependent on how much work you put into studying the right products for your business.
When doing your research, consider the following points:
Look at what’s selling
It is wise to begin your research by taking a trip to Amazon to see what products are being bought. By analyzing the industry you plan to target, you get a fair idea about what is hot with customers, what isn’t, and what gaps your business can potentially fill. The ideal scenario is finding a high-demand product type in a niche category. Find a saturated category and you’ll have your work cut out attempting to surpass the competition that already exists.
Keyword research
Finding relevant keywords is another savvy method to find out more about what shoppers seek on Amazon. This can be done effectively by using a tool like Keyword Scout from Jungle Scout. By discovering the search terms potential customers are using most, you gain an insight into their current pain points and the solutions they hope to find.
Weigh it up
The size and weight of your potential product play a big role in which you ultimately choose to private label on Amazon. If you pick an item that is too bulky or heavy, this is going to eat into your profit margins. Not only will this bump up the delivery cost from your supplier, but it will also be more expensive to store your goods in the Amazon FBA warehouses. If possible, attempt to find private label items that are small and weigh less than three pounds.
The price is right
As part of your product research, another vital element is price. Go too low and you’ll have to sell a lot to compensate for the slim profit margins. A premium price, on the other hand, could see you struggle to shift any products. An established brand is often necessary before a customer splashes out on an expensive product. Try and find that sweet spot of between $15 and $50. This should be enough to tempt purchases while giving you enough profit per product sold.
Select Your Supplier
A supplier is necessary to become a private label seller on Amazon. That much is obvious. Of course, locating the ideal supplier might not seem all that easy on the surface. The good news: in this day and age, it’s easier than ever to find a manufacturer to source products from.
This is thanks to platforms such as Alibaba and DHGate. Via these platforms, you are able to find a vast assortment of suppliers across every conceivable industry that manufactures their own products. You can also get in direct contact with these suppliers without jumping through hoops, opening the door to specific requests and quickly closing deals.
Of course, you have to be cautious when selecting a supplier. A lot of fake manufacturers exist to simply take your money and run. Ensure any supplier you consider has a strong reputation, at least a couple of years of experience under their belt, and they have trade insurance. Oh, and they need to permit private labeling.
One piece of advice: don’t choose the first supplier you come across. It is always recommended to put together a shortlist of manufacturers, contact each one, and see which offers the best prices and services.
Decide on a Brand
You have selected private label products to sell on Amazon. However, before these are manufactured and sent your way, you must decide on the branding for your private label. You want something that is memorable and stands out for the right reasons.
A strong brand depends on two main visual elements: the logo and color scheme. A unique logo, one that is inventive and catches the eye, can go a long way to leaving a lasting impression. It means customers could see a different product during an Amazon search, realize it’s associated with your brand, and decide to explore further. As for a color scheme, this must be consistent and not all over the place. Two or three main colors will do the job.
Your branding also extends to packaging. While your packaging tends not to be the first thing customers see when browsing Amazon, this aspect still requires plenty of care and attention. Customized, memorable packaging can help you to stand out from the competition too.
Get Your Products Listed
Listing your product is easy. Creating an effective listing is difficult.
There is no underestimating the importance of a quality product listing. It is a necessity to drive organic traffic, receive clicks, and get those all-important sales. If your listings fail to account for Amazon’s search algorithm, your products will likely end up in obscurity. The result: you can wave goodbye to your private label investment.
An Amazon marketing agency is recommended – and not just because that’s our game. An agency knows exactly how to optimize product listings, giving your items the best chance of showing up in relevant search results and being found by the right buying audience.
Prefer to do it on your own? Here are some tips to keep in mind:
Simple yet detailed title
The title is not the place for flowery language. With only 200 characters available, make sure to include key details about the product. You should also add your brand name.
High-quality images
It’s not uncommon for Amazon sellers to think any standard images will do. However, these need to be high-quality and visualize all the key components of your product.
Product description
If a customer is reading your product description, this means they are interested. This is the time to hit them with all of the relevant details they want to know about your product.
Competitive pricing
There are many, many products on Amazon. You will struggle to generate sales against your direct rivals without a competitive pricing strategy. This is particularly true when you’re just starting up your private label brand.
Ryan Flannagan is the Founder & CEO of Nuanced Media, an international eCommerce marketing agency specializing in Amazon. Nuanced has sold $100s of Millions online and Ryan has built a client base representing a total revenue of over 1.5 billion dollars. Ryan is a published author and has been quoted by a number of media sources such as BuzzFeed, CNBC, and Modern Retail.