What is a Private Label?
The private label refers to the selling of existing products or goods under your own private label on Amazon. It is also referred to as an FBA product or Amazon Private Label Product. This kind of strategy mainly deals with the third-party manufacturer, which is behind the successful manufacture of the product, sold to any brand under its name and sent to Amazon to fulfill the sale task. Most of the time, manufacturers are asked to manufacture products in bulk or at cost type to provide the customer with multiple stocks to sell under their brand name. Assuming that they have done every meticulous process from the manufacturing up to the marketing and selling of the product, this is how private labeling is being done.
All of the needed work can be accomplished effectively and efficiently on a desktop or laptop anywhere. The manufacturer and Amazon take updates and alerts about the continuous private labeling process of the responsibility of the product.
How to Private Label your Product?
The process of private labeling a product includes varying steps and guidelines needed to be followed to achieve successful and satisfying results. Patience is one of the required attributes when acquiring a private labeling service. Also, during the private labeling of a product, it is recommended to avoid jumping from one step or revenue to another one. This way, shortcomings and problems can be avoided.
Here are the steps needed to be followed when doing private labeling of the products.
- Find a suitable product niche or product to offer.
- Search for a reliable and trustworthy manufacturer that can accomplish the manufacturing of the products within the given time.
- Create and personalize the logos, designs, and packaging of the product. This can help to make the product recognizable by potential customers.
- Prepare Amazon products listing.
- Opt for FBA from Amazon.
- Start promoting and selling the product to reach more potential customers who will then patronize the product.
Why selling under a Private Label is profitable?
Using the private label on Amazon is considered as a profitable strategy of selling products and goods. Here, the seller can promote the product while waiting for potential customers to purchase the offered product. The level of having an increase in sales through the private label is high and is continuously increasing through the aid of modern technological devices and equipment. A lot of sellers and businesses have already used this kind of strategy for them to create more sales, leads, and to reach success.
In addition, the exposure of the product is far higher than actual stores for a lot of potential customers are using online platforms and websites in their everyday lives. This can increase the potentiality of the product to be purchased by the customers.
There are other benefits that you, as a seller, will get if you sell products under a Private Label.
- You can independently adjust the markup, change the value of the goods depending on the demand (for example, offer a discount during the holidays) and not lose your profit.
- You can choose a manufacturer that fully meets your requirements for product quality, price, equipment. You do not need to constantly look for a supplier who will offer the best price for the product so that your margin after resale remains the way you want.
- You can independently decide how your product will look, what functions it will perform, how it will be packaged. You have complete control over each stage.
- You can easily and quickly make any changes regarding your product, if the market demands it, in order to always satisfy customer requests and not lose demand for your product.
- You can expand the line of products that you sell, so that your buyers are even more interested in purchasing products from the same seller.
- You can control the growth rate of your business and launch new products under a private label when you are ready for it financially.
However, all these advantages still do not guarantee that if you build your business on Amazon using this model, you will certainly succeed. It is important to come up with a product suitable for branding, use Amazon research tool software to make sure that it will be profitable to sell it, choose a reliable manufacturer of the product and perform many other actions. Only then will you reach success. Do you want to know how to do this? We will try to help you.
Where to look for business ideas?
Business ideas or products to sell can root from varying inspiration and purposes. It can be from the talent or skill possessed by an entrepreneur or inspiration from recently watched or read news regarding the top businesses which can hit like a bang in the market. Varying online platforms can also provide business ideas coming from well-known and renowned companies across the world. Partnership or collaboration with other people can also be possible and can generate business ideas. Always remember that a passionate entrepreneur continuously seeks for more products or services to offer to potential customers.
\We will offer you several sources of inspiration to help you find the right product for sale under a Private Label.
- Start by exploring the bestseller list.
This is a great option for those who have no idea where to start building their business under a private brand. With it, you can understand what products are already selling well - Amazon Best Sellers. Explore not only the TOP-100 best products and see other products in these categories and subcategories.
- Use BSR to select a product.
Using BSR, you can estimate how well a product sells relative to other products in the same category or subcategory. It is difficult to analyze the market manually and evaluate BSR in this way. But you can use a special Amazon seller tool with which you can track the growth or decrease in BSR.
If you track the BSR of a product over time, you can give a rough estimate of how well it sells, for example, in different seasons or during holidays. To do this, you can use the Amazon BSR plugin or a specialized research tool for Amazon.
You can also view product ratings by category, for example, amazon's rankings of the most popular toys. Perhaps among these products you will find the one you need.
- Check out the Amazon Movers & Shakers list.
Here you can find interesting products that demonstrate high sales growth in the last 24 hours. So you can analyze the trends in demand in the category where these products are sold, and find those products that are most likely to be higher in the bestseller list soon.
- Learn the wishes of customers.
Amazon Most Wished For is a list with categories and products in these categories that buyers most often added to their wish list on Amazon. Look for products that could be your first private label product or complement your product line.
5. Subject blogs, crowdfunding sites, newsletters.
You can find an interesting idea by reading the news on the thematic sites or by studying the latest gadgets, reading posts on social networks or viewing promotional emails in your email inbox.
The main thing you need to understand: the idea of a product that you want and can profitably sell on Amazon can come to you at any time. Even when you just go to the supermarket and browse the shelves in search of the right product. Your task is to remember this idea, conduct a market research and determine how profitable it will be to sell such a product.
- Search products on other sites.
In addition to Amazon, there are other trading platforms where hundreds of thousands of products are sold, for example, Aliexpress or eBay. This is a good opportunity to find an interesting product and then negotiate with a supplier who can produce such a product.
- Use your own experience and knowledge.
Brainstorming is also one of the ways to get fresh ideas for your business. Think about what products you buy yourself, what you like and what you would like to change in them. Create a list of such products and examine the demand for them in the respective categories.
Specific Product Attributes
Products to sell are comprised of varying attributes such as weight, height, quality, seasonal, and other else. Considering these product attributes can help your business to reach more success farther than the expected outcome. Also, these attributes can make way for the recognition of the product in varying stores and markets.
You must choose a product that is fairly easy to sell, and there is a constant demand for it. But at the same time its production, delivery and packaging should not be too expensive to reduce your initial investment. In addition, the selected product must meet specific criteria.
- The demand for goods must be stable throughout the year (it should not be a seasonal product that people are willing to buy only from time to time).
- The shelf life of the product is large, the product itself is not perishable and fragile.
- The weight of the goods should be light, and its dimensions should be standard (without special bulging parts) and small; It will be great if the selected product fits in a standard shoebox.
- The product should not fall into the category of products for the sale of which requires special permits, numerous legal documents, certificates and patents.
- The selected product must be one that can be improved, making it even better for buyers.
- Your goal is to create your own successful brand, so it is important to provide for the possibility of producing and selling not a single product, but a whole product line of a similar thematic focus.
If you follow our recommendations, it will help you to avoid many problems with launching the first product under a private label. So you will find a product that you can easily manufacture with the help of the manufacturer, save money on its delivery to the warehouse, avoid problems with its damage during transportation, etc.
Conducting marketing research can help the product and the owner to be more aware of the potentiality of the product to reach more in the market. Market researches can be used as a basis for generating ideas regarding the product to offer to the customers. It can examine the possibility of the product regarding how it can be impactful to the market and its scope of influence.
The potential of the product for further improvements and online platforms must also be considered when doing market research. Using an Amazon seller search tool can be regarded as to seek for more market research that can be implied to the production of the product.
How to conduct market research faster and more efficiently? There are many special tools that will help you in finding products for a private label.
One of the most interesting and powerful tools for conducting research on the Amazon market is the Jungle Scout. With it, you can estimate the average cost of the product, the number of reviews, sales rank, sales per month, the level of demand for the product and much more.
You also have access to a specially developed Amazon BSR plugin Chrome, which makes using JS even easier.
With the help of such a tool you can check the product you are planning to sell, and evaluate how profitable such a start will be.
TopBSR is a service with the help of which you can track BSR changes not only of your own product, but also of competitors' products, view BSR change history, as well as monitor price changes, track keywords and much more.
Google Keyword Planner will help assess how often people search for the product you are researching. This tool is also useful for searching for synonyms of key words associated with your product. The more people looking for a product, the higher the likelihood that the demand for it will also be high.
Google Trends is another helper that can be used to determine whether a product is seasonal or whether demand for it is stable throughout the year.
There are many other useful tools that everyone seller should know about on Amazon.
Search for a Supplier
Searching for a reliable and effective supplier of the product and its needed material can be both hard and easy to do depending on the connections of the entrepreneur. Suppliers can be anywhere and can be acquired in regards to the expectations of the customers. Connections or the online platform can be used as a way of searching for a trustworthy supplier.
If you have the ability to produce goods in the United States, then this is the best option. You do not need to care about shipping from other countries, and the label "Made in the USA" can add to your sales.
Another option is to produce goods in the country where you live. In this case, it is easier to control the quality of the goods.
But the third most common option is to find a manufacturer in China or India, where the production of goods is relatively inexpensive.
One of the most popular resources where you can find your supplier is Alibaba. Here are thousands of manufacturers of various products that are ready to fulfill any of your order. However, you must remember that among them there may be fraudsters who easily cheat their customers or make poor quality goods instead of the declared ones.
Here is what you need to do to find your ideal manufacturer.
- Register your account on Alibaba.com.
- Search for your product on the site. You will see lists of products, among which you need to choose the most similar to your product.
- If you do not find the exact same product that you need, do not despair. In most cases, it is enough to select some of the most similar options and then discuss the possibility of their improvement or significant changes directly with the manufacturer.
- Select 5-6 manufacturers that best match your requirements.
- Contact selected manufacturers and discuss all details with them. The most important questions you should ask:
1. Is it possible to get the first batch of goods in a minimum quantity (200-250 copies)?
2. Does the supplier carry out a trial order in the amount of 1 unit, so that you can assess the quality of work and the conformity of the goods to all your requirements?
3. How much does such a sample cost? How much will the first batch of goods cost, if the number of units in it is less than the supplier usually manufactures in one order?
4. How can I pay for my order?
- Wait for a response from each manufacturer and then decide on which of them it is most beneficial for you to cooperate.
It is important that you clearly represent the appearance, characteristics and functions of your product. So you can describe in detail the task to the manufacturer and get exactly the product you want. In addition, when you accurately describe the task and strive to learn more information about the features of working with each supplier, this creates a sense of your stability and reliability as a customer. Manufacturers of goods go to contact better in such cases and are more willing to reduce their initial demands in price, the number of units in the first batch, etc.
Features of working with Suppliers
Working with suppliers is composed of features that uphold the harmonious relationship between each other and here are some of those:
- Accountability for quality issues.
Working with suppliers must have a sense of accountability when quality issues come intertwining both of the parties.
Both the supplier and customer must have production capabilities to ensure a sufficient supply of the product during its release to the market.
Both parties must have effective communication with each other. This way, they can both talk about vital matters regarding the supply and to have more significant leads.
In addition to the factors considered, there are other points that are important to clarify before starting cooperation with the supplier.
- Minimum order size.
We have already said that usually you should not buy too much of the first batch of goods. However, many suppliers on Alibaba indicate 500 units as the minimum lot. Therefore, it is important to pay special attention to this item.
- Price of products.
You must calculate the cost of a full cycle of production of goods, its delivery, storage, Amazon fees. Do not forget to add your markup (this is the net profit that you plan to receive). And estimate the total amount that the buyer will pay for your product. If it is unreasonably high, try to negotiate with the supplier to reduce the cost of the consignment. Otherwise, you will need to look for another manufacturer, because your product will be noncompetitive.
- Product modifications, a variety of colors, styles.
If your product assumes the presence of several configuration options, color shades, variants of execution, check this option with the manufacturer. And do not forget to find out whether this will affect the price of a unit of product.
- Lead time.
This is important not only for the sample that the manufacturer gives you, but also for the first batch of goods and all subsequent orders. You should estimate the approximate timeline so that in case of constant demand for your product you always have it in stock. You have time to order it on time, and the manufacturer carries out the order within the stipulated time.
- Features of working with private labels.
Is the supplier ready to produce products for your private label? Will he be able to make changes to his configuration if necessary, if you ask to do it? Is the manufacturer ready to ensure that your ideas for improvement or its production will not be disclosed to outsiders?
If it seems to you that the process of finding a reliable manufacturer is too complicated for you, and you are new to Amazon business, you can use the services of an intermediary. The agent will check your list of suppliers, find out how long they are engaged in the production of goods, find reviews about them. However, be prepared for the fact that the services of such a specialist are expensive.
A sampling of goods and assessment of their quality
The manufactured supply or product must be tested for its quality in varying ways. Assessing its capabilities must be done to ensure if it had met the requirements or expectations that are necessary to satisfy the potential customers.
One of the ways to do this is to get a sample of your product, and only then order a minimum batch of goods that the manufacturer agrees to sell. However, this does not guarantee that the batch of goods will be performed with the same quality as the first sample.
You can also hire an auditor or inspector to control the production process and assess the quality of the finished product. He will visit the production, will assess how the supplier adheres to your agreements and whether the deadlines for the execution of the order.
There are two options for checking: a full check, when the inspector tests every single item, and a partial check, when from a large batch, the auditor assesses the quality of a third, fifth, or tenth of the total volume of goods.
The cost of a full check is more, but in this case you will be sure that low-quality goods will not get to your customers.
After the audit, the inspector will provide a detailed report. In it you will find information about how many goods turned out to be defective, how serious the defects found are, whether the product’s equipment, its appearance, dimensions and other parameters correspond to those specified during the ordering process.
Every processor connection appropriately taken in creating a private label on Amazon will always provide a positive and effective result. A passionate and determined seller must uphold all of the strategies as mentioned above and ways for the success of the product’s private labeling and marketing to your potential and existing customers.