Building a private label business is one of the most profitable ways of selling on Amazon. However, just because it’s one of the most lucrative and popular ways to do business in the marketplace, it doesn’t mean it’s the easiest way to make money.
There are a lot of things to take care of when choosing this model. Besides selecting the right products, you’ll also have to take care of branding, packaging, marketing, and ultimately fulfillment.
It could sound complicated at first, but with the right guide, anyone can do it. So, keep reading to find out how to do private label business on Amazon like a pro.
Amazon Private Label is the process of selling on Amazon goods under your brand name, but that has been manufactured by someone else.
In other words, you decide what products you want to sell, contact a manufacturer and have them produce those goods for you, apply your own brand label on the products, and then sell them on Amazon.
This is the chosen method to do business for most sellers because it allows everyone to sell products under their own brand, despite not having manufacturing facilities.
Selling private label products on Amazon comes with a wealth of advantages.
On the one hand, you can build brand awareness and make yourself a name in the industry without having to invest too much at first.
It also allows people who don’t have the know-how of making a certain product to sell it under their own brand name.
With this in mind, you might want to know how to start a private label business on Amazon. Before we dive deeply into the matter, though, there we should make clear the difference between private label and white label products.
Private Label product vs. White Label product
Unless you’ve been living under a rock or you hadn’t really studied the world of private label, you’ve likely heard people speaking about white label products before.
What are they, and what’s the difference between white label and private label products?
In a nutshell, white-label products are products you buy from one or more manufacturers and sell with your own label, but without making any changes to that product.
With white labeling, you can order any product you want, label it, and start selling it quite quickly, but keep in mind that you’ll be competing with dozens – if not hundreds – of other sellers who buy and sell the same product, albeit under a different brand name.
Private label, on the other hand, involves sourcing your products from only one manufacturer. You can start with a generic white label product, but private labeling gives you the opportunity to bring any changes or improvements to that product.
The process is lengthier and more expensive, but you get full control over the product and can easily differentiate yourself from your competitors.
As such, the private label comes with multiple advantages, including:
Now that you know which are the differences between white label and private label products – and why choosing private label is a better idea – let’s get more specific and see how to start an Amazon private label business.
Determine what products you want to sell
The first step to starting an Amazon private label business is by determining what product or products you want to sell.
Perhaps you already have an idea of what you’d like, but the basic rule to follow is that you must pick a product that’s in demand but for which you wouldn’t have too much competition.
For example, you might want to launch a new perfume, but remember that competing with established brands – almost all luxury and high-street fashion brands – is near impossible. Even if it’s unrelated to the niche, selling manual dethatches could be more profitable in the long run.
To determine the products, you should use specific tools and do product marketing research.
The golden rule is that you don’t have to like the product. If the market demands it and the competition is low, you should go for it.
Find the right manufacturer
Once you determined what to sell, it’s time to start looking for a supplier or manufacturer. There are various ways to find the products you need, from contacting manufacturers on websites like Alibaba to contacting white label wholesalers in your area and have their products rebranded with your brand name.
You can also find manufacturers on other international sites or even pair with small local businesses that operate in your field.
Design your products
As mentioned above, the beauty of private labeling is that you can work closely with a manufacturer to alter, improve, or otherwise change the characteristics of any white label product to meet your needs.
Therefore, you should now start reading reviews, check the flaws of the white label product of your choice, and start to improve it to meet the consumers’ needs.
Enhancing a product can consist of anything, from changing its shape or colors to adding more functions or improving existing ones to fix all flaws the white label product of your choice has.
Manufacture private label products
When the design is ready, contact the manufacturer and send them your prototype and designs.
Have the products manufactured according to your guidelines, and make sure they are all branded with your label.
If you want to make sure no one else can replicate your private label products, it is recommended to register any patents on original improvements under your brand name.
Figure our fulfillment
Like any other products sold on Amazon, private label products can be fulfilled either by yourself (FBM) or by Amazon (FBA).
Each type has advantages and disadvantages, but if you don’t want to deal with the order fulfilling aftermath, we strongly recommend you opt for the latter.
Fulfillment by Amazon means you’ll only have to make sure that your products get from the manufacturer to the Amazon warehouse on time, and that your stock never runs low.
Apart from this, Amazon will take care of everything else on your behalf, from packing and shipping orders, to dealing with returns and general customer support.
That’s it! You should now be able to start selling your private label products on Amazon in all peace of mind.
Our tips below should help you source the right products and find suitable manufacturers.
Finding the right private label products is far from easy. There are a lot of things to keep in mind, that’s why we decided to dedicate a special section to product sourcing.
In theory, all products are suitable for private label as long as:
What kinds of products suitable for private label?
- They are not copies of trademark products (such as products from Nike, Puma, Dyson, etc.)
- Your product doesn’t infringe any patents or copyrights
- Your product isn’t violating anyone’s intellectual property in terms of design, graphics, artwork, etc.
- Durable, small, light-weight and easy to sell on Amazon without certifications
- Popular categories such as clothes, cosmetics & skincare, sports products.
Typically, all white label products are suitable to turn into private label, especially if you plan to enhance the product and make it unique for your brand.
How to find private label products?
One of the greatest concerns of every private label Amazon seller is to find the right products.
We already said it – you don’t have to like the product. Your job as an entrepreneur is that of finding a product that’s in demand, fairly easy and inexpensive to manufacture, and easy to sell.
A few ways to find products is by:
- Using product search tools, such as AMZScout, Jungle Scout, or Unicorn Smasher. Chrome extensions like Camelcamelcamel or Keepa can also help you find profitable products that are in demand.
- You can check the trends on shopping websites and social media to see which products your potential target has an interest in. Check what products people buy, but also make sure to identify the flaws of these products so that you can improve them.
- Amazon can also be a valuable tool during product research through its Hot Product lists. These lists contain the best-selling products in all categories, so you can easily identify what works and what doesn’t.
How to find suppliers for private label products?
Another tricky part when selling private label products is that of finding your suppliers. One of the best websites to look for manufacturers is Alibaba, which is a sort of Amazon for the wholesalers.
This marketplace gathers almost all manufacturers from China – as well as other parts of the world – and you can easily find someone capable of creating the product of your dreams.
When picking suppliers, keep in mind that you should only contact those with a verified profile and ideally with positive reviews.
To find the right supplier for you, our advice is that of contacting four or five manufacturers and ask for a sample product as well as a price offer from each of them.
Although it might be tempting to go for the cheapest one, you should always assess the quality of the sample, communication, as well as overall reviews of the merchant before signing an agreement.
We also advise against suppliers who only accept bank transfers as payment, because it will be near impossible to get your money back should they fail to fulfill their part of the agreement.
Instead, work with suppliers who accept PayPal, credit card, or Trade Assurance payments, to ensure that you can easily get your money back should they not fulfill the orders or manufacture different products than those you requested.
To draw prices down, it is also a good idea to use the lowest price offer you got to negotiate discounts with the manufacturer of your choice.
Creating your own brand and selling products under your name can come with many advantages.
Your strategy can include:
- Optimize your listings: creating a merchant page that allows you to customize your listings with more images, photos, videos, as well as tables and texts.
- Customize your designs: It is always best to bring some design changes to a label product so that your target can only associate that product to your brand. Design your own logo, packaging, and images which will attract more customers and give grow your brand awareness. In this way, you’ll have more chances of selling than your competitors who only choose to apply their label on a generic product.
- Set up advertisements: Selling private label products also allows you to run various advertising campaigns and to get your products sponsored on Amazon. In this way, it will be even easier to reach your audience, promote your product, and ultimately drive your sales.
- Keep track of product metrics: It is important to analyze your product metrics and know how it performs. If it does not perform well at all, then you can try to improve it and adjust your selling strategies.
- Increase your listing reviews: Product reviews are an important part of a hot-selling listing. It helps buyers to make a quick decision on buying the item or not. If you try to launch a new product, one of the best strategies to improve your listing ranking is to gain more reviews. Tools like Cashbackbase, AMZDiscover can help you increase more positive reviews, thus more sales.
Building your own private label business on Amazon is by far a better idea than selling generic white label products. This method gives you the opportunity to create customized products starting from a popular white label product, enhance that product to address any previous flaws, and create that stellar item your potential buyers will love.
With the possibility of having your orders fulfilled by Amazon, you can even take a huge burden off your shoulders and only focus on product selection and improvement.
In this way, growing your private label business on Amazon should be easy. Sure, it might take more time than selling white product labels. Building a private label business might be more expensive up front, and you’ll have a lot of work to do to find the right suppliers and secure the lowest manufacturing prices without compromising on product quality.
In the end, though, all this effort will pay off, and in the long run, you’ll be able to build a brand reputation and a strong business name by simply choosing to create a private label business on Amazon.
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