There are many ways to make a profit selling on Amazon in 2022. But selling private label products is still one of the best methods to bring in business through the world’s largest e-commerce website.
According to Statistica, sales for private label products in the US hit $5.47 trillion in 2019 and are expected to hit $5.94 trillion by 2022.
In this blog post, you’ll learn what Amazon Private Label products are, the advantages and disadvantages of selling them, and a step-by-step guide from ideation to fulfilment.
Zee specialises in helping Amazon FBA sellers import their goods successfully, so we know a thing or two about the best ways to make money online.
What are Amazon Private Label Products?
Amazon Private Label products are goods created by one company and then sold and branded by another.
It involves researching and sourcing in-demand products already being manufactured and sold, then branding them with a unique ‘private label’ and selling them as your own.
There are four ways to sell on Amazon using their FBA service:
- Amazon Private Label
- Creating your product
- Retail arbitrage
Below you’ll learn all the steps you need to take to make a profit selling Amazon Private label products.
How to Sell Private Label Products on Amazon: Step by Step
1. Research Your Products
Picking the right product is crucial. You need to make sure you’re choosing something in demand and already selling well rather than something you think will sell well. This means you’re capitalising on consumer demand, and it’s less risky than launching something brand new.
There are lots of ways to discover these products. For example, you can look at Amazon Bestseller lists to Other websites are also a good source of inspiration. Are there any products on niche stores that are selling well but not currently stocked on Amazon? This could be a viable opportunity to take advantage of a gap in the market.
Other websites are also a good source of inspiration. Are there any products on niche stores that are selling well but not currently stocked on Amazon? This could be a viable opportunity to take advantage of a gap in the market.
Here are a few extra questions to consider:
- Are the products lightweight?: If they weigh over 1 kg, this could lead to high shipping costs.
- Are people likely to return the product?: Items like clothing are complicated to sell because people often return them.
- Are the products seasonal?: Don’t fall into the trap of only selling items that will only sell at peak times, such as Christmas goods. Balance this with ‘evergreen’ items that sell all year round.
- Will there be lots of paperwork involved?: Some items, like electricals and groceries, require legal documentation that can add to your workload. Ditch the paperwork and choose something simpler instead.
2. Find a Manufacturer
There are ways to sell private label products without dealing with a manufacturer. For example, some websites will liaise with the manufacturer for you.
But if you want to get the best overall package, it’s best to deal with manufacturers directly. Shop around (at least three to five options) to compare and make a more informed decision.
What should you be looking for in a manufacturer?:
- Price: This is important, as you want to keep costs low, but don’t base your decision entirely on this factor, as other areas are important too.
- Communication: Are the manufacturers good communicators? Can you get hold of them quickly if something goes wrong?
- Quality: Choosing a slightly more expensive manufacturer may be worth it if the quality of the product is higher. Don’t sacrifice quality, as this can negatively affect your brand in the long run if customers aren’t satisfied with your products.
Another thing to mention to potential manufacturers is that you’ll be selling private label items. They may Another thing to mention to potential manufacturers is that you’ll be selling the goods as private label items. They may be able to get labels printed for you and added to your products.
3. Sample Your Products
Lots of Amazon sellers miss this step.
Before you bulk order from a manufacturer, make sure you sample the product first. This will give you the best indication of the quality of the goods. Don’t risk your reputation by not testing them – it could come back to bite you in the future if not.
Samples aren’t free, but if you choose to go with the manufacturer they may take the cost of this off your first order.
Once you’ve considered all the above factors, you can make a decision about the best manufacturer and start your Amazon selling journey.
4. Negotiate the Price
Now you’ve chosen your manufacturer, it’s time to negotiate the price. They’ll expect you to negotiate, so don’t be nervous about doing so.
Hold your ground and try and get the best deal possible. It’s worth reiterating that price isn’t everything, though. It’s not worth sacrificing product quality or communication for a cheap deal.
5. Create Your Branding, Logo and Packaging
A brand can take years to build. It encompasses everything from your reputation to how buyers think and feel about you.
The most important things to prioritise are your logo and packaging when you’re just starting. This can significantly impact whether someone buys your product or goes to your competitor.
Lots of private label products are in competitive industries, so branding is one way you can stand out from the crowd.
Beware: unless you have professional graphic design experience, don’t create your logo yourself. Consumers will notice and it will make your product look unprofessional.
Hire a freelance graphic designer. You can find affordable designers on a number of freelancing websites.
6. Price Your Items
There’s a temptation to make your product cheaper than your competitors because this is an easy way to steal customers from your rivals.
However, there are lots of other ways you can stand out. Better marketing, branding, packaging and customer service are often enough to convince someone to choose you over someone else.
As a rule of thumb, keep your price within 20 per cent of your competitors.
7. Write Your Amazon Listing
Now your manufacturer and branding are sorted, it’s time to create your Amazon listing.
There are three key elements to this:
Research keywords that users may be searching for on Amazon to find your products. Look at your competitors – what words do they include in their titles?
Don’t write something vague; rather, accurately describe what your product is, so a user knows exactly what they’ll find when they click on your page. Usually, titles that are more specific work better.
If you find multiple relevant keywords, put your most important keyword first in the title, then add the others afterwards.
Your product description can have a big impact on whether a user decides to buy from you or not.
Make sure you accurately describe everything a user would like to know about your item. Bullet points are a highly effective way of doing this because they’re much quicker to read and scan through than a large paragraph.
Highlight your USPs first to show why your product is better than similarly priced competitors.
High-quality images will make your listing look sleek and professional. Getting your lighting and angles is key in this respect.
Try and get photos from multiple angles, so users know exactly what the item looks like before they make a purchase.
8. Fulfil Your Orders Using Amazon FBA
When the sales start rolling in, you’ll need an efficient way to get your goods to your customers.
Using Amazon’s FBA service is one of the simplest ways to do this. Amazon will store, package and ship your items for you, which takes away some of the heavy lifting so you can focus on other activities.
Not used Amazon FBA before? Read our ultimate guide to Amazon FBA to get started.
Advantages of Amazon Private Label
- Branded products tend to sell better because there’s an element of luxury and quality associated with them.
- A well thought out brand helps users trust you more, which will convince more people to make a purchase from you.
- If your branding is strong, people will remember you. That means they may come back in future to buy from you again.
Disadvantages of Amazon Private Label
- Amazon is very competitive, so you’re not guaranteed success. That’s why choosing the right product is so important.
- Branding is difficult. It can be hard to think of a compelling reason why someone should buy from you instead of a competitor. But if you nail this down, you’re more likely to succeed.
Despite Amazon being competitive, there’s still so much potential to make money by selling private label products. By taking advantage of Amazon’s FBA service, you can bypass worrying about fulfilment. Instead, you can focus on getting the right product, the right branding and the right listing to connect with your customers.
If you choose to use Amazon FBA, you can run into some issues, especially if you ship internationally. Problems with stuck shipments, customs compliance and air freight can crop up. That’s why a service like Zee is so helpful. We act as your importer of record and take care of everything, so your inventory can arrive at Amazon fulfilment centres without any hiccups.