We’re going to be going over something a little lengthy, but not too technical and that’s selling private labeled products on Amazon.
Selling private labeled products is no new business model and selling them on Amazon isn’t either, but that doesn’t mean it can’t be profitable.
With the right product selection, sourcing, and marketing you can launch a successful line of branded products on Amazon.
If you’re not to familiar with what private labeling is, it’s:
“…designating a product manufactured or packaged for sale under the name of the retailer rather than that of the manufacturer”
In short it’s the sourcing of generic products and branding them as your own with your own packaging and logo, then marketing better then the competition, and selling for a profit.
This business specifically (being on Amazon) is going to revolve around finding products that are already selling well on Amazon.
We’re going to be covering the process from getting set up to selling in a 6 step process as shown below:
- Creating your seller account
- Deciding your seller program
- Selecting a product
- Sourcing with suppliers/Branding
- Creating your product listing
- Getting your first sale
This should get your gears moving and open you up to what kind of opportunities are out there, and hopefully get you started with this whole selling on Amazon thing.
Selling Private Labeled Products On Amazon
First off I feel the need to address that this is not a get rich quick scheme, this is something that can be a potential full time income and has been for many people.
This will take work and you will most likely run into some road blocks along the way, your success with this business model is dependent on you and you alone.
Also this is no cheap endeavor either, so if you’re someone who is a little tight on cash I suggest you wait until you have your finances in order.
The amount you spend will be dependent on a few factors:
- The type of product you source
- The amount of inventory you order
- How competitive your market is
I’ve seen people pay anywhere from a few hundred to get started to multiple thousands, so your upfront investment is up to you.
Most importantly, remember this is an investment for your future, the money you spend now isn’t just being thrown away. You’re investing for a profit that you can scale and grow for a better brighter future.
With all that being said, let’s get into it and start with setting up your seller account.
Creating Your Sellers Account
If you’re going to start selling on Amazon creating a seller account is unavoidable.
There are two types of accounts you can have, and Individual or a Professional seller account.
One is free to use and the other is a standard fee of $39/month. But there are some key differences to take into consideration.
With an Individual account you will be able to avoid the monthly fee but you will be required to pay a fee of .99c per every item sold and will be limited to only 40 items sold per month.
This isn’t ideal, typically if you want this to generate more income limiting yourself to a set number of sales per month just isn’t good business.
That’s why I recommend setting up with a Professional account, although there is the $39 fee this will allow you an unlimited amount of sales per month and will not require the .99c fee per item sold.
Note: You can just sign up for now as an Individual then when you’re ready to start selling or create a shipment, sign up as a Professional.
Choosing Your Selling Program
Next will be your decision to sell as FBA (Fulfillment By Amazon) or Merchant on Amazon.
They both can be beneficial in their own ways, but I always recommend FBA over merchant, here is why.
With FBA you are given access to Amazon’s fulfillment services, they’ll handle the storage, fulfilling, packaging, and the shipping of your orders, and returns.
You will be charged a fee for doing so (being dependent on the size, weight, and fragilness of your product).
Even with that being said the trade off is greater, this will save you time to focus on other aspects of your business such as sourcing and marketing.
With Merchant the only way you have a connection with Amazon is their selling platform. Amazon will not be handling the fulfillment of your products in any way.
Meaning you will responsible for storing, fulfilling, packaging, shipping your orders, customer service, and returns.
In the beginning this might seem doable but if you want to scale your business keeping up this pace will be close to impossible on your own.
You’ll be left with little to no time to work on your business and unless you have a warehouse to store your products I don’t think you want your garage becoming a storage unit…
If you need a little more convincing here’s a pro’s and con’s of FBA vs. Merchant to help you decide.
Note: Amazon takes a customary 15% commission per sale for using their platform for both accounts.
Selecting A Product
(If you don’t have Google Chrome, get it, it’ll save you a lot of headache when doing this)
Now we’re onto probably one of the most essential and time consuming aspects of this whole process and that’s selecting what product you are going to go with.
Your product is going to need to have the following characteristics: (These will help gauge if it’s a good opportunity)
- A BSR (Best Sellers Rank) between 250 – 2,000
- Price range between $15 – $50 (Can be higher if you can afford it)
- Comments <500. (Anything higher is a sign of high competition)
- Weight below 1lb (Can be higher if the sale volume is there)
- Have 2 similar products (but not variations of the same brand)
Note: Also Amazon does have some restricted categories for things like foods, supplements, automotive, and beauty. This doesn’t mean you have to avoid them, but you’re product will need to be approved before selling. (Just something to keep in mind)
As you collect this information it’ll be best to input it into a spreadsheet to keep track.
Going into a little more detail on the list above:
To find product’s that are best seller’s all you have to do is type  into the Amazon search bar and select the department you want to search and it will result in all the best sellers in that category.
From this point I highly recommend you download an extension called DS Amazon Quick View (chrome extension).
This is a free extension that shows you a products best seller’s rank (BSR) without having to click into the listing and manually check yourself. It saves a lot of time and hassle.
Here’s a little example of what it looks like in action:
As you can see the first 2 (from the left) are showing the BSR in Cell Phone’s & Accessories, while the one on the right will have to be checked manually (just scroll down to the product details and it’ll be there), this sometimes happens, but it’s rare, being why I felt the need to include it.
Next will be the price range of the product
Along with searching  in the search bar, you can utilize Amazon’s price range tool in the sidebar and select your price range, then click go.
The reason for $15 – $50 is to keep the cost for inventory down for your first order, since most people just don’t have $1,000’s laying around this is a good way to keep your initial investment lower.
Comments will be the next factor
You want to keep it <500, typically if a product is higher then that they are either an established brand or have an aggressive marketing campaign and will be hard to compete with.
Checking the item’s weight
We want this to be <1lb, this will help keep your shipping cost down and will let you ship by air getting your product to market faster.
Searching for 2 similar products
You do this by going into the search bar and searching the product (no ) and see if you can find 2 similar products that also match the same criteria above. (not the same brand)
So for example:
If your primary product is a 6 pack of white tube socks, you want your similar products to also be packages of white tube socks (the quantity isn’t to essential, you’ll be going with the quantity of the best selling pack.)
The reason behind this is to ensure the item is in demand and is selling instead of just one brand owning the market and the rest struggling to make sales.
Also if a product pops up that has a BSR less than 200 this product will be to competitive and you will need to find a new product.
Don’t get discouraged here, you’ll probably have to redo the process several times until you find a good product, but this is essential to your product’s potential success, so don’t cut corners.
Once you found a product that meets the criteria it’s time to start sourcing, bringing us to our next step…
Sourcing With Suppliers
So you found a product and now you’re ready to source it, but where do you start?
You’ll simply just search:
- (whatever your product is) + supplier
- (whatever your product is) + wholesale
- (whatever your product is) + manufacturer
This should pull up plenty of results, most likely you are going to see Alibaba for almost every search, they’re who I recommend for international suppliers (most likely being the route you’re going to take)
Note: If your product is a supplement or food you will be restricted to domestic sourcing only.
With negotiating with suppliers you are often going to see prices ranging for a product listing, these are their price tiers for the quantity ordered.
So say if you see a product listed at $4 – $8, $4 might be if you order 1,000+ while $8 might be if you only order 50. This can always be negotiated, so don’t stress to much.
You’ll also see something called an MOQ, this is the Minimum Order Quantity, meaning this will be the minimum amount of orders they will take to start an order. But this can also be negotiated so don’t worry.
I’ve gotten suppliers down from 1,000 to less then 200 before, they want to make money just like you so turning down an order is hard for them to do.
Note: Always be polite and professional, remember these are other people trying to make a living, not just some company.
Your supplier 99% of the time will handle the branding and packaging (they usually have a few default options to choose from) of your product.
Just ask for a sample and packaging options and have them send you one to your liking so you can get a feel for the product’s quality and performance.
Before placing the order you will want to ensure the packaging has “Made In China” on it to get through customs and will need a FNSKU label placed on the product covering up any other bar code.
An FNSKU is Amazon’s version of UPC, it helps them keep track of product variations and tracking of your product in house. (you can print these out in your seller central and have your supplier or yourself do it, or have Amazon do it for a small fee per unit)
(If using FBA you will need to generate a shipping label for your supplier using your seller central for which warehouse Amazon designates your inventory to be sent to)
Once you have everything negotiated and agreed on you’ll place your order and have them send your product over to Amazon’s warehouse. (if you chose FBA if not then your location).
Note: Ensure the shipping crates meet Amazon’s packaging and prep requirements to ensure a smooth process upon arrival.
Note: Request one be sent to a product photographer for the next step, you can find them on Fiverr or by searching “Amazon Product Photographer” in Google.
Creating Your Product Listing
This can be done while your shipment is underway or upon it’s arrival, I wouldn’t recommend putting it off but that’s up to you.
This is where you would want to create your listing, look at what your competition is using, and what keywords you see products on the first page have in common.
You would want to include these in your listing but ensure they make sense and aren’t just crammed in there.
With your bullet points you want to point out the benefit’s and features of your product, why should someone buy your product?
Note: Never claim your product can do something it can’t or that it will cure any disease or illness as this is not allowed by Amazon and will result in the removal of your listing.
Next will be the product description of your product, what makes your product worth buying, we’re not listing off features here, we’re listing problems the customer is having and how your product can fix it.
Say if you’re selling deodorant, you can say:
Do you hate having sweaty armpits after the gym?
- Well our Antiperspirant deodorant prevents just that, blocking out 99% of sweat for 24hrs!
(Completely made up, but you get the picture.)
Once everything is in place you can set your listing to live and you’re up and selling! Leading us up to the next and everyone’s favorite part, making your first sale!
Getting Your First Sale
Amazon does have a good way of making most of its sellers get sales by sharing the buy box, but you can’t be dependent on people just finding your product, you need to find them yourself!
This is where I highly recommend or even before your listing is even active to start engaging on social media.
Note: Be sure to sign up for business accounts not personal as the business accounts have great marketing tools to take advantage of.
Engage with you audience and build a following, you can also run ads and announce new product launches or sales to help boost sales on your Amazon listing and create more brand awareness.
Amazon Sponsored Ads are also a great tool to utilize to help gain exposure and generate sale on their platform.
Note: Each of these platforms offer a detailed process on how to setup and run campaigns so don’t worry if your new to it, they’ll guide you through the process.
Wrapping Things Up…
Hopefully you found this helpful and has shown some clarity on how this whole Amazon selling thing works.
If you’re looking for more, need some further guidance, or want a more hand holding process, I suggest you check out Brand Genesis.
It’s a great program that gives a live example of a six figure business being built step by step, along with what you need to duplicate the process yourself.
The detail in their program really is incredible that in writing I would be here for days just to cover 1/10 of what the program covers.
The program is created by the CEO of Amazing.com (entrepreneur community) Matt Clark, a multi-millionaire in the online physical product’s business.
So not only are you getting great training but you’re seeing it done live by an expert in the business.
If you want to check it out and read more just click the link above or the banner below to see it for yourself.
Until next time,
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