Thousands of new third-party sellers join Amazon every day, making it increasingly difficult for sellers to find a product in an unsaturated market and stands out from the crowd. Despite the difficulties and decisions that sellers face initially though, once you’ve found a niche product that fulfils a need, you’re onto a winner.
You can make thousands a month in profit simply from pinpointing and selling one key product, allowing you to scale your inventory to eventually sell a wide range of products and generate a significant level of income.
Amazon private label selling is just one way to do this, allowing you to sign-up for a sellers account and start profiting from the huge and diverse audience that Amazon provides using your own brand name.
Without sufficient competitor and market research before you make the move to sell private label though, you can end up investing in a product that either already has too much competition or little to no demand on Amazon.
To help you make the move to sell private label on Amazon, here’s a simple guide for you to follow from the Repricer.com team.
What is Amazon Private Label Selling?
Amazon private label selling essentially consists of a supplier or manufacturer creating a product that a seller can brand up and sell as their own. Usually, a supplier will be happy to add your branding to the product for you, so all you need to do is focus on the selling part.
Whether you choose to simply slap a logo on your products or you prefer to customise a product to a larger extent in terms of branded colours or features, the process of adding a brand name to a product allows you to significantly raise the price point and generate a much larger profit.
How Can You Start to Sell Private Label on Amazon?
When getting started with private label selling, it’s important to know your budget inside and out. It’s far better to be strict with yourself initially and know your limitations than to run into financial troubles further down the line, so always be realistic.
It’s also key to understand that while private label selling can involve minimal hassle once you’ve found your product(s) and sales start coming in, the process of identifying your products, sourcing and listing these does involve a significant amount of time and dedication.
How Can You Find the Best Private Label Products to Sell on Amazon?
There are no hard and fast rules when it comes to finding the best private label products to sell on Amazon. Even a highly niche and in-demand product can fail to sell if you approach it in the wrong way. In the same respect, if your product is similar to what is already out there but your sales techniques and reviews are outstanding, you can still make a huge success of it.
Despite it being about how you sell your product and not what you are selling, there are, of course, some key factors for those just starting to sell private label on Amazon to keep in mind…
Size and Weight
Usually, the smaller and lighter your product is, the better. If you’re becoming an Amazon seller under strict budgets and want to invest as little as possible to get started, the size and weight of a product can make or break.
If possible, try to find a product that fits in a shoebox to keep your costs for shipping, inventory storage, or Fulfilment by Amazon (FBA) fees to a minimum and your profit margins high.
Another key factor to consider when weighing up your options for what to sell private label is demand. Unless you have a large budget available to mitigate the risk, don’t fall into the trap of selling a product that’s recently come into fashion or started trending as it will likely drop off as quickly as it came around.
For your first private label product, aim to sell a ‘necessity’ – an item where the demand is consistent all year round and will not ebb and flow with trends or seasons. Think basic clothes, toys, stationery, electronics and more.
While you might think that a product offering an array of unique features will sell, this isn’t always the case. Being a successful Amazon seller is about keeping things simple, don’t try to overcomplicate the concept of a product as you can end up alienating certain areas of your target market.
The simpler a product’s design, the easier and cheaper it will be for a supplier to manufacture so the less you will have to invest. You may not make as much profit per sale, but you can rest easy knowing that consumers will easily understand how to work your product and it won’t be as at risk of damages during the shipping process.
Go One Step Further
Next, ask yourself what makes your product different from what competitors are already selling or doing?
Check out the reviews of bestselling products to pick up pointers for how you can improve on a competitor’s product and sell it for a higher price. Something as simple as changing the colour, texture, or adding a feature can allow you to achieve a much higher profit margin. Just make sure you aren’t breaking any copyright, trademark or patent laws when doing so.
Find a Niche
The more specific and niche a product’s purpose, the better. For example, there’s no point trying to sell basic loo roll – it might be a necessity, but you will be a tiny fish in a big pond of existing branded competitors.
Aim to find a product that is highly targeted towards a niche type of market in terms of their demographic, financial situation, quality expectation, location and more. Don’t just look to find a gap in any market, find a specific gap in a highly targeted market instead.
Finally, keep in mind that demand and markets change. If your product isn’t classed as a necessity, you should be prepared to adapt your product range and inventory to suit the times, if you want your Amazon private label selling to generate a consistent stream of income.
Once you have a strong idea of the type of product to sell private label, you need to carry out extensive competitor research. What are your competitors doing with their branding? What do their listings look like and how are they optimised? Take inspiration from competitors and go one step further.
Don’t fall into the trap of selling a product that’s currently in trend just because your competitors are doing so. Larger and more established Amazon private label brands may have the budget to experiment and chase trends but for those just starting, it is better to sell products that will be required all year round.
Locate a Supplier
If you do sufficient competitor research, you should have a strong idea of your price brackets, but this will also be influenced by manufacturing costs.
When you’re ready to find a supplier, head to Alibaba – a huge site that enables you to search for any product and find a manufacturer willing to create it for you. You can use the platform to contact suppliers directly, establish long-term relationships and analyse prices.
It’s important to work with a supplier that is communicative and allows you to place test orders so you can see a product for yourself before ordering large volumes. Don’t be afraid to negotiate with suppliers either; they will have competitors too so may be willing to lower their prices.
Once you’ve set up your sellers account, you can use Amazon’s FBA fee calculator to work out your profit margins based on your target pricing, your suppliers’ pricing, dimensions, weight, and more.
Amazon’s FBA Program
Before going in and listing your Amazon private label product(s), you will need to decide whether you want to handle order fulfilment yourself or whether to benefit from Amazon’s FBA program.
The FBA program consists of sending your products to an Amazon warehouse, where they store and process all orders on your behalf. You can steer clear of any stress that comes with packaging, shipping, processing returns and even avoid having to get involved with customer service.
Of course, in return for Amazon doing this, they will take a cut of your profits, so it’s important to weigh up your options and decide how much time and resources you have to dedicate to your Amazon private label selling venture.
Millions of private label sellers all over the world are benefitting from the FBA program, which allows you to focus on channelling your efforts into other areas of your business such as branding, building a reputation and product promotion.
Listing Your Product
Consider the category your product falls into when creating your listings. Some product categories will naturally take a lot longer to be approved than others. If you’re looking to create listings quickly and easily, its best to start with categories that are low risk and not sensitive to have it approved and ready to go in as little as thirty seconds.
While it may seem like the hardest part is over once you’ve sourced your products, it’s still essential to pay close attention to the optimisation of your product listings. Your products won’t show up to consumers or stand out from the crowd is they are not optimised in the right way.
Carry out plenty of keyword and competitor research to pinpoint the main keywords to include in your product titles.
There are a few key components of an Amazon listing to consider:
- Product title
- Bullet points of your product features
- High-quality photographs
- Detailed product description
The key to selling private label products on Amazon is to be adaptive and proactive with your strategy. The chances are you will be starting with a completely new brand so it’s up to you to get the brand name out there and build trust with your target market.
Profit from any existing audiences you already have, whether you have a website, email list, or existing social platforms with followings. If you don’t yet have an audience, you can work on building one in the run-up to your product’s launching with social advertising, email campaigns, launch discounts and more.
Paid advertising is quickly becoming one of the most profitable ways for brands to reach the right people online. Amazon Sponsored Products is a great way to get your private label products seen. If you have the budget, it is worthwhile investing in an automatic or manual ad campaign to put your products in front of the right people, gain some initial exposure, and boost conversions. Once you’ve seen some conversions, your organic rankings will improve too.
As consumers, we’re all guilty of going straight to look at the reviews of a product on Amazon before buying. One of your top priorities, once you’ve started selling a private label product, should be to gain some positive and informative reviews on your listings.
Don’t be afraid to reach out to customers and ask politely for a review or set up automated emails to handle this for you. Even a few glowing reviews can be all you need to lift your product off the ground.
There is no ‘one size fits all’ approach to Amazon private label selling. To get it right, you need to be prepared to do plenty of research, take time to find the best private label products to sell on Amazon, and don’t rush into any uneducated decisions.
Repricer.com is the fastest automatic Amazon repricing tool on the market. You can use the software to automatically adjust your prices and compete in the search results. Try our tool completely free for 14-days to see how it works for yourself and ensure your private label products are priced right.