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The world of private labeling on Amazon is anything but private. News is spreading fast that this once well-kept secret is now the up-and-coming way to make a living while living the lifestyle you want (and having fun). If you want to know more about the whispers you’ve heard of people working from home in their jammies, tapping away on their laptop, and still making seemingly more than they did in the corporate world… you’re in the right spot. This is the ultimate guide to creating a private label business on Amazon.
But before we dig in, here’s my caveat: While you can run this business from anywhere in the world and stay in your sweats until 3 pm, it takes upfront work and ongoing determination and dedication to keep the ship sailing.
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This is not the “set it and forget it” of the business world. However, if you’re ready to put the work in, this business is abundantly rewarding… and I’ll help you get where you want to go.
What is Private Labeling?
Private labeling is essentially taking an existing product and selling it under your brand. Think of store brands… if you look around in Costco you’ll find “Kirkland Brand” plastered on everything from paper towels to socks. You name it, there’s a Kirkland Brand version of it, because “Kirkland Brand” is Costco’s private label. Private labeling allows you to sell a vetted, trusted, and tested product under your own label. It’s the profit without reinventing the wheel. When you have a private label business on Amazon, you select a product that is already selling. Then you brand, differentiate, possibly improve, and sell it as your own. You have control over the quality, supply, price, the listing details on Amazon, and all details pertaining to your product. Compare this to the retail arbitrage method of hunting down deals of other people’s products and reselling them online. There, you do not have control over product quality, price, listing details, and supply… no thanks.
Here’s a better question… why not? Not only is Amazon one of the top retailers in the WORLD, they have superior customer service, a proven track record, and unparalleled user experience. They are one of the most trusted names in households across the world, and vying for the top search engine spot next to Google. Yep, that means when someone needs something, their first instinct may be to open Amazon and search it rather than Google. Talk about exposure. With their platform already having millions of daily users, you don’t have to worry about driving traffic to your own website. Plus, Amazon FBA (fulfillment by amazon) offers the simplicity of having fulfillment warehouses to store your goods, and also the service of having your orders fulfilled. So you get all the benefits of being a business owner without storing inventory, managing workers, or making trips to the post office. On another note, creating a private label business on Amazon, if you’re willing to work hard and put in the upfront work, can provide you with the opportunity to no longer trade your time for money. Your efforts are easily scaled with a physical products business.
Read more: 5 Reasons You Should Be Selling on Amazon
So, if selling from one of the world’s top retailers, mass scaling your efforts, and working from anywhere sounds like a good investment to you, here’s how to get started…
How to Select Your Product
Selecting the products you sell on Amazon is one of the most critical steps in the whole process. Your products are what you build your entire business around, so you don’t want to skimp on this step.
There are two main ways to research your products: manually or using product research software. I personally use Jungle Scout. Jungle Scout is a chrome extension or a web app. When you use the chrome extension on Amazon, it crawls through and analyzes any products on the page and gives you detailed insight on the product. It collects information like average monthly sales, average sales rank, average price, and opportunity score.
Of course, this is information you can find manually, but it takes a lot of time and research. I wanted to work more efficiently with the hours I had to put into my business, so Jungle Scout was a no-brainer for me. Now, I’ll say this: I am an affiliate for the product. But I highly recommend this because, even though it does cost money, it makes running your private label Amazon business a lot smoother.
Ideally, you want to start with a product that:
- Serves a specific market or niche
- Has max 500 reviews or less
- Has a BSR (Best Selling Rank) range of 500-5000
- Is an “ungated” category
- Is at the price point of $20-40
- Is not too large or breakable - preferably under 2 lbs
- Is not seasonal
Read more of my product selection tips in: 7 Steps to Selecting a Private Label Product to Sell on Amazon
How to Source Your Product
After you have decided on a product (yay!), you need to begin contacting suppliers to order samples. There are several different websites to do this, but the one I use and recommend is Alibaba. This service allows you to contact multiple different suppliers, from multiple countries, and search for products -- it’s productivity heaven.
Now that you know what product you want to sell, you can either type it in the search bar to find suppliers you want to individually contact, or submit an RFQ (Request for Quote). This allows you to put a request out and allow the suppliers to contact you. If you do this, make sure to fill in as much information as possible for the product you are looking for, so suppliers know if they can provide you with the product you are looking for.
I suggest contacting between 5-10 different suppliers to compare their different quotes, prices, MOQ (minimum order quantity), production time and other details regarding doing business with them. Make sure to be professional during your communication with suppliers - you want to come across as a serious business partner (because you are!).
I look for responsiveness, politeness, and communication when searching for a supplier. I check to see if they answered my questions accordingly and if they seem like someone I will want to be doing business with. Also, when looking over the supplier's profile on Alibaba, make sure they at least have the “trade assurance” badge. If they have the other two (gold supplier and assessed supplier), that's even better!
Once you have narrowed down your selection, I recommend ordering samples from 1-3 suppliers to check the quality of the products. Expect to spend about $30-100 per sample for the cost of shipping. Payment terms can be through Paypal, Alibaba trade, T/T, western union. I recommend Alibaba trade or Paypal, as these give the best protection for your money in case something goes wrong. Once paid make sure and get the tracking number of the sample being sent.
Creating Your Brand
Now that you have decided on a product, contacted suppliers, and ordered samples, it’s time to start thinking about your brand. You will want to come up with a great brand name, and begin to think about the “voice”, values, and mission statement you want your brand to uphold!
Once you have decided a brand name, purchase the domain so you can have a company website. This website does not need to be super crazy or elaborate, but it is important to have so that your Amazon customers see you as a real brand.
Pro Tip: You can get a domain at namecheap.com. And don’t forget to create an email while you’re at it! Using an email that says @yourcompany (rather than @gmail) will come across as more professional and serious.
After you have your website and email, you will need a logo designed! This step can seem overwhelming as there are so many places to get a logo, but I love (and used) Fiverr. 99designs is another great platform. They are more expensive, but the overall quality of work is going to be much bigger than Fiverr. Determine what your budget is and then have a look around.
While you’re waiting for your logo to come back, claim your social media handles with your new brand name including Facebook, Instagram, Pinterest, Twitter, and any other platforms you will want to utilize.
Shopify is a great option to grow your online presence off Amazon, as well as provide a place for customers to learn more about your company and products. Having multiple channels where your product is sold will not only increase sales but will also be much more appealing to a potential buyer if/when you sell your brand!
Building your Email List
If you are interested in the online marketing and e-commerce world at all, I would venture to guess you have heard the statement “ The money is in the list”. Today people are obsessed over how many followers they have on Instagram, or likes on Facebook, or subscribers on youtube… but here's the thing- you don't own ANY of those fans. You could wake up tomorrow and Instagram could be shut down (highly unlikely) but still, if that were to happen and you suddenly lost contact with all your followers, what would you do? With an email list, you own it! Therefore you get to make all the decisions around what, when, how any content goes out.
Now you might be wondering what this has to do with a private label business right? Have you ever seen those lines outside of an apple store the morning a new iPhone is about to come out? They are all lined up waiting to purchase the new product about to launch! So in terms of “gaining a line” of people to buy your product, at least in the online world, you want to grow a list with people who are interested in your niche and will likely be a fan of your new brand and products!
A great way to grow an email list of people who you know will be interested in your niche- is to run a giveaway! Select a valuable item ($150+) you know your customers would love to have and offer it as a giveaway. In exchange for someone signing up for their chance to be the winner, they, in turn, exchange their email address. Growing this list will be super beneficial when your product has finally arrived at Amazon and it’s time to launch! The service I use and recommend for running giveaways is Gleam.
Placing Your Product Order
Okay, now you have contacted suppliers, created your brand, and snatched up your social media profiles. Now it’s time to test your supplier's samples! It’s possible you’ll have a clear favorite after receiving the samples. If you do, go with your gut feeling. However, if you don’t, be sure to thoroughly evaluate and test each sample.
Once you approve the best sample, you’re ready to place your first official order! But before you do so, solidify the terms with your supplier including:
- MOQ (minimum order quantity)
- Down payment amount to begin production
- Shipping terms/pricing
- Order detail finalizations (your logo on the product, color variations, or other product variations)
- Packaging details
- Amazon TOS compliance with packaging (you may need a poly bag over your product to be compliant with Amazon’s warehousing requirements. The polybag will also require a suffocation warning. Most suppliers should be aware and familiar and able to provide. TOS can be verified in your Seller Central account)
- Barcode: Every item sold on Amazon needs a barcode or UPC so that once your product is in the FBA centers they can scan and find your products for Amazon’s internal tracking. You can buy them online, here is the site I use: Cheap UPC Barcode
Shipping Your Product
After your product production is complete, you have to ship the goods over to the states and to the Fulfilled By Amazon warehouses. Don’t worry, it’s not as long of a process as it seems!
There are many different ways to ship your goods:
- Air express: Fastest and most expensive (plus, if order is under $2,500 no need to clear customs)
- Air Freight: Slower than Air Express, but cheaper and needs to clear customs
- Sea Freight: Slowest form but cheapest (and needs to clear customs)
When determining which route of shipping you want to use, consider the size of your shipment. The larger the shipment, the more expensive it will be (which usually causes sea freight to be the cheapest). Make sure you get quotes from your supplier and do your own homework as well. You will also need to check into shipment liability.
Incoterms for shipments liability:
- Ex works - EXW: No delivery, priced for product finished at factory
- Cost Insurance and Freight - CIF : Will deliver to port in US
- Free on Board - FOB: Delivered to port of delivery
- Delivered Duty Paid ( DDP) - Full services paid
- Delivered Duty Unpaid- DDU: Will NOT pay Duty
Because this can process can be a little confusing (and time-consuming), I recommend working with a freight forwarder. They can be your shipping liaison, and communicate directly with your supplier. Most companies can also pick up your items direct from the factory overseas, ensure they are sent over correctly, and then also have a customs broker service to assist with clearing your goods through customs.
I have used or recommend these freight forwarders:
Pro Tip: Ensure you track the total time for your products production and shipping time to completion into the Amazon warehouses. This way you will have a better grasp on when your inventory will need to be re-ordered. Also, pay attention to the Chinese holiday schedule as it is different from ours. Factories shut down for weeks at a time and this needs to be taken into consideration when planning inventory.
Listing Your Product
Now it's finally time to build your product listing in your seller central account on Amazon. You’ve done all the upfront work, and now it’s about to pay off - go you! Of course, this is a SUPER crucial part of your business because it’s what people see first. Think of your listing as the “storefront” for your product and brand.
First, you will want to get great photos. Since your customers are not able to actually touch your product you want the photos to be fantastic. Show off different angles, and incorporate some lifestyle photos to show your product being used. Don’t forget, your main photo must have a white background to be amazon compliant.
Next, you will need to fill out your title, bullet points, and description. Keywords and search terms are key to optimizing your listing, and therefore should be incorporated into these sections of your listing as best as you can. If that sounds overwhelming, don’t worry! Here are some keyword research tools you can use to find which terms are most searched for your specific product:
Also, the Amazon search toolbar itself will pull up what people are searching for! Amazon is a search engine after all. ;)
It’s very important to do your keyword research, as this is how Amazon will understand what your product is. Plus, when you want to launch your PPC (pay per click) campaigns, you will have a great list of keywords that you want to rank for.
Launch Your Product
Now is the (really) exciting part when your products are in the Amazon warehouses, your listing is built out beautifully with well optimized with great photos. Yep, it’s officially time to begin your launch strategy. This strategy not only leads to you getting sales, it leads to you getting ranked on Amazon. Your goal is to get on the first page for the main keywords you used. This way, you will generate organic sales as your listing is showing up on the first page of Amazon. You know shoppers will not scroll through 15 pages of the same product on Amazon to select which one to buy, so it’s critical get on that first page!
One quick way to get on the first page is to get as many reviews on your listing as possible. Not only does it increase your ranking, it establishes social proof. There are several email campaign tools you can set up to follow up with your customers and ask for a review of your product. I love (and use) Jumpsend. They have an awesome insert you can incorporate in your follow up emails that shows a picture of your product with the review star outlines right next to it, making it simple for your customer to click and rate your product!
You will also want to monitor how many sales a day your current competitors are making. You can do this through the Jungle Scout Product Tracker. After knowing how many sales your competitors make, you can run a giveaway campaign (giving coupon codes for a deeply discounted rate). That campaign will boost your sales for a short period of time. If your competitors are selling 5 units a day, you need to match those sales for 7-10 days to boost the rankings in Amazon's algorithm.
Also, once you have 10-15 reviews on your product, you can begin to run PPC (pay per click) campaign. This is where ads within the Amazon platform are targeted towards customers searching for your product (you can also drive outside traffic to your listing through your email list and social media marketing strategies).
Creating a Private Label Business on Amazon Takeaways
Now, this is an overview of the steps it takes to get your Amazon private label product business up and running. I could go way more in depth into each of these steps, but I wanted you to have an overview or bigger picture of the whole game plan. The beauty of this is, once you have it down, you can reorder products and continue to grow your sales! You can also start adding new products onto your line to expand your brand. Of course, your long-term vision can be to build out your Amazon product portfolio, grow your brand within, scale, and one day sell it! Or, you can keep working the business and making a healthy profit.
I know this may seem overwhelming at first, but you can do it! It’s totally figureoutable... You just have to take action! :)