- Diversitech Team
How To Sell Private Label Products On Amazon (Comprehensive Guide)
Updated: May 3
The three most popular ways to sell on Amazon are manufacturing your own products, selling other brands with permission, and private-labeling items from manufacturers. The last of these can be lucrative but not easy at first for new amazon sellers trying their luck in this realm!
Getting a product from the factory to the customer’s doorstep takes some work. There's branding, marketing and promotion that need attention along with fulfilment services for when you finally make it out into public!
Private labelling is a great way for sellers who want to sell their products on Amazon without having the time or budget of manufacturing them themselves. It's also perfect if you're new at selling, as it allows beginners with little experience to dip their toes into all aspects of e-commerce from designing logos and packaging graphics to basic logistics and managing inventory.
What Are Amazon Private Label Products?
Private labelling is a great way to get products at lower costs. You give product specifications (or even just buy their “blank” generic item) to a factory manufacturer who then produces and packages them. You then take over and do the branding, marketing, sales, and any direct customer services aspects of the business.
It's no secret that one of the biggest private labels is Amazon Basics, which is owned by Amazon. In fact, Amazon owns just under a hundred private labels currently selling in the Amazon marketplace. It doesn't matter who manufactures these products, they just get sourced from factories and producers with assembly lines, and sold under a brand name--making them seem like a close substitute for something you would find at Walmart or Target.
Looking to develop private label products to sell on Amazon? Get in touch
What Are The Advantages Of Selling Private Label Products On Amazon
On Amazon, many private label sellers have been able to make a living from their own products. Why?, though it’s not easy or quick (as some would like to say) as with any business start-up, there are compelling advantages to private label selling on Amazon.
1. Less Competition
You could buy wholesale from well-known popular brands, however, you are now competing against other sellers also selling the same or similar products under that brand! Private label sellers own their own brand and have the advantage of not competing with other sellers of similar products from the same brand. Good branding, marketing, pricing and end-customer service will make your products stand out in the Amazon listings and reviews.
Your brand on Amazon is an opportunity to distinguish yourself in the marketplace. It’s not just about selling products, but also creating a unique experience for customers and giving them exactly what they want when it comes time to buy something online! Amazon, and even the original brand owner, places policy restrictions on how branded goods are sold eg. to prevent counterfeiting.
2. Better And Increased Profit Margins
Depending on the private label goods, they can be manufactured and shipped quite inexpensively. You can make your own private label product and position yourself in the market with accuracy by creating a branded good. For example, if you're looking to attract an exclusive audience that will pay more for quality goods then just stick around top-end products; while also giving buyers who want something reliable but not too expensive suitable middle ground options like yours.
3. Branding and Product Credibility
A buyer's confidence in your and its products increases when they see product and brand linked in multiple ways. For example, having the Amazon seller name and website domain aligned with the product branding builds credibility for someone who visits an unfamiliar site.
4. Branding and Product Exposure
Amazon provides extra services to Brand owners on their platform. This includes brand protection, more options to create professional and attractive listings which leads to more conversions ie. sales. and other services.
Private labelling your products can help you increase exposure and make a sale. When customers see the same branding on a website, the Amazon listing, the product and packaging aspects, it creates consistency which makes remembering who they made their purchase from easier in future transactions.
What Are The Disadvantages Of Selling Private Label Products On Amazon
1. Start-Up Costs
Private labels have many advantages but it also has some disadvantages. The main drawback for private labelling a product is that you will need to put in a lot of time and money into product research, manufacture specifications, product quality inspections, branding and marketing before you can start selling the item.
Another thing about going down this path as well: manufacturers may require large orders which additionally makes inventory and storage costs high.
2. Branding and Marketing
To get the most out of your private label, together with, hopefully, a high-quality product you will need to focus more closely on branding and marketing. One thing's certain: if people can't find what they're looking for, amongst all those other products available, then there won’t be any customers. Additionally, Amazon’s fees for advertising and marketing campaigns will play a significant part in any sale’s budget and costs.
3. Unknown Brand - Higher risk
These days, it's not enough to just have a great product. To make sure people know about you and become devoted customers of yours too, branding is key. Customers are unwilling to risk purchasing unknown brands especially for high-end, speciality or goods that are ingested or applied to the body.
You're not picking up an established brand and new private label companies have struggled with this problem for decades because they can't compete on price or margins with big name brands like Nike.
How To Sell Private Label Products On Amazon Step-By-Step
If you want to make a business off of your products, then a private label is the way. Private labels aren’t just for those looking at making quick cash; they're also an investment with long-term benefits that will see results over time - even if it takes years.
1. Open an Amazon Account
The first step is creating an Amazon Seller account, either an Individual Account or the Professional Account. As to be expected, the professional seller account costs more to maintain but has less selling restriction and more features available for the serious seller. But if you’re just starting out looking into private label brands on Amazon then the Individual account will give you a taste of being an Amazon seller. You can later upgrade to the Professional account.
2. Product and Market Research
It’s not enough to have a great idea and then sell it. You need the right product, at just the right time, at the right selling costs and purchasing price, for your target audience in order to be successful on Amazon Marketplace. The first step is researching what customers are looking for from you or other sellers like yourself. Use online product research tools.
Many of the best ideas also come from looking at what's already selling on Amazon. It should be no different when you're after a new product to sell, so start by checking out their list of top sellers. You can also break it down into subcategories based on research if needed for even more inspiration and motivation.
3. Find the Best Private-Label Supplier And Manufacturer
The Internet has been the best thing that's happened to business in recent years. You can now find just about anything you want, anywhere on this planet - all through online B2B platforms. This means it is easier than ever before for small businesses like yours looking into finding suppliers or manufacturing their products themselves without having any hassle whatsoever.
In order to find the best prices for your products, you should contact different manufacturers and make sure that they do provide private labelling manufacturing. There are a lot of fake suppliers online so it is important only to use trusted ones with at least two years of experience in this industry as well as trade insurance. The last thing anyone wants is their product being counterfeited or using suspect payment methods.
4. Decide On How To Ship To Customers.
Factors you need to consider when choosing whether or not to fulfill orders in-house, through Amazon's FBA program and/or outsourcing fulfilment centers include:
shipping costs; picking up inventory from suppliers and packagers, who will also be warehousing them for your store while they await delivery (i.e., picked items can sit around waiting);
packaging supplies such as boxes etc.; logistics.
Before making a final decision, you should assess the costs and benefits of each option. This includes considering shipping percentages such as logistics fees from the FBA program from Amazon itself.
Related: How to make the most of amazon fulfillment center storage limits
5. Creating and Realising the Brand
The importance of branding cannot be overstated. Private label brands need to have a unique identity and run through all aspects from logo design down to the color scheme for it not only look good but also feel like a cohesive whole separate entity as opposed to just another product on offer with no personality or soul behind its creation.
Do your research (again) explore what has already been accomplished by others who made this same type of product or in this niche. Do not forget the additional costs and administration required to officially trademark your brand usually with the help of trademark specialist lawyers.
6. Create Listings and Use Marketing Services
Create compelling and attractive listings on Amazon. Use appropriate keywords in the listings so that your listing ranks high in Amazon’s and other search engine search results. Use Amazon’s paid advertising and marketing services to spread your brand on their platform. Don't forget a website and also social media to let people know what products are available, when, where and how. All these are crucial to your success!
It's not enough to just be knowledgeable about the product you're selling. You need thorough business and marketplace research and due diligence, which include scouting your competition, looking at costs, suppliers, logistics, branding and more.
Private labels are not short-term money-making endeavours and involve hard work and commitment. But if you’re doing it right, your company can grow and expand into something truly amazing!
Looking to develop private label products to sell on Amazon? Get in touch