How to Sell Private Label Products on Amazon FBA
Here’s everything you need to know and more!
Starting an eCommerce business can be overwhelming, especially if you plan on manufacturing the products in-house. This is the reason why many people choose drop shipping and private labeling.
Dropshipping is a kind of eCommerce business wherein you don’t keep any inventory, and you work as the middle man between the manufacturer or supplier and the end-consumers. In this business, fulfillment is one hundred percent carried out by the supplier. Primarily, entrepreneurs earn by getting a certain percentage from the sales of each product. Another form of eCommerce is Private Labeling, in which you get a third-party to manufacture the products you’re selling, topped with your branding. This makes it look like you manufactured the products yourself.
What are Private Label Products?
Private Label Products are produced by a company and sold by a third company under their brand. There are many products for you to choose from electronics, fashion to cosmetics. One of the most popular ways of doing this is through Amazon FBA.
In essence, the private label business is all about finding a product, which can be produced by a third company in an unbranded state and eventually labeling and selling it as your own.
Advantages of Selling Private Label Products
There are several benefits that you can enjoy when you choose private labeling. These include the following:
When you capitalize on unbranded products, you can be sure to get them at a lower price. This is in contrast to when wholesaling branded products that are generally priced higher. Private label, in turn, gives you better flexibility in terms of positioning your price point in the market since you enjoy higher margins, and hence, higher profitability.
Having solid branding can boost your brand credibility. A complete branding will give your customers an impression that they are dealing with a legitimate business, making them comfortable purchasing your products. This is what Private Label is about – in this business; you’re not just any kind of reseller out there since you’re branding the products as your own, which leads to higher brand credibility.
If your Amazon store has the same branding as your products, then your customers will be more inclined to purchase from your store, unlike with other generic Amazon shops that are selling the same products and have no distinct characteristics. This is because your customers will have something to remember when they purchase your products, and this makes it easier for them to track you in case of repurchase.
Selling Private Label Products on Amazon
- Research Products that you can Sell
There’s a variety of products that you can choose from for private labeling. Some have been proven to sell themselves well, and some don’t. So, before selecting your product lineup, there are some considerations that you need to take note of.
For instance, you might want to move away from seasonal products since they’re not good for long-term revenue. You’d also want to avoid complicated products like apparel, shows for instance, since the inventory can be overwhelming with the number of variants that come with like sizing and colors. Getting smaller products than bulky ones might also be one that you need to consider since it will affect your shipping costs. Choose a product that is simple and easy to manage to avoid future headaches.
- Find Your Supplier
Once you’ve chosen your product lineup, the next step is finding a supplier. In choosing a supplier, we recommend you reach out to several manufacturers to compare the product quality, service reliability, and pricing. Doing so will also give you the chance to better negotiate with each supplier.
For starters, you can check out Alibaba to source out several manufacturers for your chosen niche. You can also purchase an item from a manufacturer, so you get a feel of the service and product quality without inquiring first.
- Product Samples and Pricing
Upon shortlisting your suppliers, the next critical thing that you need to do is to request actual samples and negotiate the price. By requesting actual samples, you will get first-hand experience on your supplier’s products’ quality and functionality. However, take note that some samples are not free, so expect that you will be charged for the product and the shipping fee.
If you’re happy about the product and service quality, the next thing to do is negotiate pricing. This can be daunting at first, and you might even be intimidated by some suppliers, but keep in mind that suppliers already expect retailers like you will negotiate. Negotiating with your suppliers will allow you to lower your costs while maximizing your profits. If you’re not good at negotiating, don’t worry – remember when we said you need to talk to several suppliers? This is where you should capitalize on quotations with low prices that you receive from another supplier to lower another’s pricing.
- Establish Your Brand Identity
After you’ve finalized your product lineup and have chosen which suppliers you’ll work with, the next thing that you need to work on is to design your branding elements. This includes your logo, color schemes, fonts, and the design of your packaging. If you’re not a creative or artistic person, it would be wise to sign up for the Canva app and take advantage of the ready-made templates available or hire a freelance graphic designed to take on the project, which are practical options for startup entrepreneurs.
- Create Your Listing on Amazon
Now that you have the complete lineup of everything that you need for your private label business, the next step is to put it together and draft your product listing on Amazon. In creating your product listing page, there are two main things that you need to focus on – high-quality image and keywords.
To make your products more attractive, you should only put out high-quality images. These images must give your customers a complete overview of the product and its details. On the other hand, your product listing must incorporate the top keywords that people use to search for your product. Having the right keywords on your product listing page will give your product page a boost in ranking in search results.
- Fulfill your Private Label Products on Amazon FBA
Once you have everything set up and ready to launch, you need to sort out your fulfillment process. You can either do the fulfillment yourself – but only if you had the resources and space to keep your inventory, or you can capitalize on Amazon FBA. Amazon FBA is a fulfillment solution offered by Amazon wherein they will handle the fulfillment themselves and deliver the orders directly to your customers.
What is FBA?
Amazon FBA stands for Fulfillment by Amazon, a service that allows eCommerce entrepreneurs to store the products they sell on Amazon in one of Amazon’s warehouses. This solution is perfect for growing businesses that need bigger storage space in storing inventory.
With Amazon FBA, you won’t have to spend thousands of dollars to get a storage facility and hire employees to manage your inventory.
How does Amazon FBA work?
In its simplest sense, Amazon FBA works as your warehouse and packers. Here’s a step-by-step explainer on how Amazon FBA works:
- You forward your products to one of Amazon’s warehouses for storage and safekeeping.
- Once a customer sends an order for your product, Amazon will be responsible for the fulfillment, including payments and inventory updates.
- Amazon will be the one to prepare, dispatch, and deliver the product directly to your customer.
- Amazon will also assist you in various customer concerns, including returns and refunds.
- Once the process has been completed, Amazon will directly deposit the sales to your bank account.
Benefits of Amazon FBA
If you’re skeptical about using Amazon FBA, then here are some of the top reasons why you should consider using it:
Amazon’s Trusted Reputation
In eCommerce, fulfillment can make or break you. Some businesses still get orders mixed up occasionally. That is precisely why having Amazon, an eCommerce giant that’s technically the master of fulfillment to back you up, is such a safe choice. Thus, when you work with an eCommerce giant such as Amazon, you can be sure that your products will be delivered on time and in good condition.
Amazon FBA allows you to benefit from Amazon’s years of experience in eCommerce fulfillment, especially from its efficient and super-fast processing. The result is – you get a faster dispatch period and speedy delivery time.
If you’re a growing business, it’s normal for you to take on a bigger inventory. However, it can be overwhelming when you’re faced with bigger overheads like the demand for bigger storage space and more employees. Amazon FBA resolves this by offering a warehouse and fulfillment solution, so you won’t have to deal with the costs separately.
Bigger Storage Space
With Amazon FBA, you are not restricted by the space that you have for storage. Basically, you are not limited within the capacity of your warehouse since Amazon will take care of that for you. And since we all know how big Amazon is, you can be certain that storage space will not be a problem for you.
The good thing about this is that you can sell in high volume than before. In turn, you can easily generate higher sales since you are able to offer more.
One of the main problems that cause the delay of deliveries is the difficulty of some businesses in following or complying with the regulations and protocols by the customs. Some of these regulations are too complex, which give entrepreneurs a hard time.
With Amazon FBA, you don’t have to deal with these complicated protocols and you benefit from Amazon’s seamless shipping, so you can ensure that your orders are delivered on-time without delays.
Aside from practicality, signing up for Amazon FBA may also boost your productivity. This is because you won’t have to manage your fulfillment yourself. Imagine, when you have Amazon FBA, you won’t have to worry about fulfillment. Instead, you forward the orders and wait for them to be delivered to your customers.
On the other hand, when you choose to manage the fulfillment yourself, you will need to manage everything from ensuring that you have ample storage space in the warehouse to making sure that each order is fulfilled correctly; these are just some of the tasks that you need to handle on top of your daily tasks – which is overwhelming. Essentially, from the looks of it, you can already conclude that having Amazon FBA will give you better productivity to focus on other things that matter.
A private label is an eCommerce business that places you in a better position than any other eCommerce retailer. You don’t need to be an eCommerce expert to start your own private label business. Like any other business, you need to find your niche, work with reliable suppliers, and pick a fulfillment solution to get it started. If you’re serious about launching this kind of business, then we highly recommend you to utilize Amazon FBA to make your life easier.
Overall, with these step-by-step guides, you can be sure that you are on the right path to building your successful private label business with Amazon FBA.
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eCommerce Paradise was created by Trevor Fenner of Seattle, Washington in 2015 to help you, the entrepreneur, to start and scale your own eCommerce business. Trevor owns multiple 7-figure eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of virtual assistants from around the world. Trevor is currently located in Bali, Indonesia, and is a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
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