Amazon Private Label Product Selling Guide for 2022

The rise of e-commerce behemoths like Amazon has created a new revenue stream for entrepreneurs: private labels. Individual merchants can use private labeling to establish a distinct and trustworthy brand. It just accepts generic products. If your brand is successful in establishing a name for itself, it will be extremely profitable.

All of this seems simple and appealing, but creating a successful Amazon private label requires far more effort than it appears.

Let's take a look at how to start a successful Amazon private label!

What is an Amazon private label?

Private labeling is a straightforward notion. You purchase your items from a manufacturer but label and promote them under your own brand. Amazon Basics is the greatest example of a successful private label. Amazon does not create the items; rather, it obtains them from other manufacturers. The e-commerce giant then offers them as Amazon Basics.

In 2018, the private label industry increased by 4.4%, resulting in a $5.5 billion profit. According to the Private Label Manufacturers Association, roughly one out of every four items sold in the United States is a private label or store brand product.

With such rapid expansion, private labels provide Fulfilled by Amazon (FBA) businesses with a great chance to build a trusted brand. You won't have to bother about production, and Amazon will handle the majority of shipping and customer service for you. All you need to do is pick a superb generic product and a trustworthy provider!

Why create a private label on Amazon??

Making money with a private label on Amazon is not a simple or quick method to generate money. So why should a merchant go to the trouble?

No brand restrictions

There are certain restrictions on selling products from other brands on Amazon. When you’re creating your own brand, that’s not something you need to worry about.

Less competition

You’re not competing with products of the same brand when you’re a private label seller. This means you don’t have to worry too much about other sellers undercutting your listing and stealing customers.

A+ Content

Amazon A+ Content,?also known as Enhanced Brand Content, is only available for brands registered on Amazon. With?Amazon EBC, you can customize your listings with multimedia content. The premium content feature enhances the user experience which leads to more traffic and conversions!?

Being an Amazon private label seller isn't without its drawbacks. To establish your own brand, you must first overcome a few obstacles.

High starting cost

Creating a private label requires a lot of upfront capital. Manufacturers demand bulk orders and in order to be competitive, you need to make sure the cost per product is low. A private label will usually set you back a few thousand dollars early on. A private label is a long-term investment.

Branding

A private label is great if you can pull it off, but branding your product and standing out from the competition is easier said than done.

Higher risk

Spending a significant amount on product purchases and branding comes with its own risk. You’re not picking up an established brand and there is always the risk that your private label fails to make a mark. In these cases, you’re likely to lose more money than if you were a regular seller.

Creating a private label on Amazon

A private label is not a quick method of earning money. It takes time to build a brand and even longer to see tangible benefits. A private label is a long-term investment, and if you haven't done your homework, you might be throwing money away. Whether you're just starting out on Amazon or wanting to build a private label, the first step is to set up an Amazon seller account. When making an account, you'll have two options; let's look at how they vary and how you may use each one to your advantage.

Individual seller account

Individual accounts are free to create, but you must pay a $0.99 commission on each transaction you make on Amazon. In addition, there is a 15% consolidated charge on those sales. You can only sell 40 goods as an individual vendor.

Creating an individual account is ideal if you do not want to sell more than 40 goods and do not wish to offer products from limited categories.

Professional account

A professional account will cost you $39.99 per month, plus some referral fees and changeable closing costs. You won't have to pay Amazon a set fee for each item you sell, and you may list up to 40 goods on the marketplace.

Before you begin actively selling, it is recommended that you start with an Individual Account. After your items have been listed and are ready to ship, you may upgrade to a Professional Account to save money.

Research your product

You've undoubtedly heard it a million times, but your ability to find niche markets and hone in on a quality product is critical to your success on Amazon. It takes time to conduct research, but it is the cornerstone of your business. Determine what your consumers want and whether the market for your product is saturated.

The list of best-selling goods on Amazon is an excellent place to start your investigation. It will provide insight into what clients are seeking for on the platform. That is priceless knowledge. When selecting a product, keep the competitors in mind. In a crowded market, you're unlikely to succeed. The idea is to choose a high-demand niche product. Many online tools allows you to view what's trending on the market in real time.

Remember that certain items are also seasonal, so keep that in mind while you search for your breakthrough product. You certainly don't want to be selling Halloween costumes in January! You should look for things that sell consistently throughout the year.

When selecting a product for a private label, there are a few aspects to bear in mind:

Size and weight

Your products should ideally be small and lightweight. This will help you save costs on shipping — from your supplier and to Amazon FBA warehouses. Ideally, you want to sell a product that weighs less than 3 pounds.

Generic and unregulated

You don’t have the option of selling every product on Amazon. Some categories and products require permission from Amazon before you can list them. Make sure your private label product is unrestricted and generic to avoid issues.

Price

You ideally want to sell products that are priced between $15 to $50. If you’re selling a product worth less than $15, your profit margins will be slim after Amazon’s cut. When it comes to expensive products, customers are more likely to trust an established brand. So anything over $50 doesn’t work out well for private labels.??

Analyze The Competition?

Once you narrow down your product idea, it is time to check out the competition. Keep track of how they are performing and how many sales they generate. Just open up Amazon and look for the product you want to sell. Open the top five products and review each listing in detail.

• Look for keywords that explain the product and check how your competitors use them.
• Review customer feedback and keep an eye on product ratings. Negative reviews will help you identify gaps in your competitors’ products. You can bridge those gaps with your new private label!?

Once you’ve scoured Amazon to study your competitors, compile your findings. It’s never a bad idea to create a pros and cons list for each product in consideration before taking a final call.?

Identify your supplier

Finding the perfect supplier is easier than many people think. Platforms like?Alibaba have made it much easier to source products directly from the manufacturer. So the first thing you need to do is log in to one of these international B2B platforms, and get in touch with your potential suppliers.

Make sure you contact different manufacturers so you can find the best prices. Also, make sure that your suppliers permit private labeling. There are a lot of fake manufacturers online, so make sure you’re sourcing from a reputed manufacturer with at least two years of experience and trade insurance. Only use a trusted payment method.?

While contacting the supplier, mention these details:

• The product you wish to purchase
• The quantity required
• The location you want them to be shipped to
• How you want your products to be shipped

Once you’ve zeroed in on a product and a supplier, you are free to negotiate. Most manufacturers only accept bulk orders of 500-1000 products. It is up to you to negotiate the terms of the contract. One handy tip – act like you belong so that manufacturers think you’ve done this before. Make sure no details are lost in translation by keeping communication simple.?

Decide your fulfillment strategy

With Amazon, you can choose to ship packages yourself or delegate the logistics to Amazon (for a price). It is recommended signing up for the FBA program if you’re creating your private label.??

If you’re an FBA seller all you need to do is make sure your products reach Amazon’s warehouse. Amazon takes care of storage, packaging, shipping, and?customer support. This doesn’t come free, but it is definitely worth the money. Moreover, FBA sellers are eligible for Prime delivery and stand a greater chance of winning the Buy Box.?

Create your private label brand

When you think about most brands, the first thing that pops into your head is their logo. There are also colors that people associate with brands. They play a major role in influencing customer buying decisions. These visual elements make a lasting impression that words never can. Keep that in mind when starting your brand. Your logo and brand colors speak for your company!

Keep these things in mind when choosing a logo or brand colors:

• Don’t blindly follow trends. It’s always better to come up with a?unique logo design.
• Identify your brand colors and stick to two or three main ones.?
• Even something as simple as a font is important. Stick to one or two.
• Keep your logo simple and minimalistic?
• Do not use vector graphics, raster images, or stock art.

Once you’ve?created your logo?and settled on your brand colors, you need to start thinking about packaging. You may need to outsource it, but it is recommended customizing your packaging. This will help you stand out from the rest of the competition and include branding elements. Make sure you include these details in your packaging:?

• Brand name
• Product name
• Product photograph
• Manufacturing details (where it was made)
• Legal information

Make sure you give yourself enough time to create your brand elements and packaging before listing your product on Amazon.?

List your new private label product

Your account is set up, your products are labeled, and you’re ready to ship. Now you need to list your product on Amazon. A good product listing is necessary for driving traffic and generating sales. Visibility on Amazon hinges on your ability to leverage keywords and media to create a rich and descriptive product listing.

Your product listing consists of 4 main components:

Product title

Keep your product title simple and add key details about your product in the title. When you’re selling a private label, make sure you mention your brand name. You have 200 characters to work with, and a descriptive title of?100 to 150 characters?is a good start.

Photographs and videos

Customers on Amazon cannot visually verify a product before they buy it. Your job as a seller is to help the customer know exactly what the product is. High-quality photos and videos give customers a visual understanding of your product. It is recommended to use at least 6 photos which cover every angle of your product. Amazon recommends?at least 1280 pixels on the longer side.?You can also add a product video to talk about its features!

Product price

You won’t be the only one selling a generic product on Amazon. If you need to stand out, your price needs to be competitive. You need to make sure that you’ll make a profit as well. You can start with a low margin early on and gradually increase prices once your brand kicks off.

Description of your product

A customer has a right to know every detail about your product. Your product description needs to cover these details. Most customers reading the product description are considering making a purchase, so this is your chance to convert traffic into sales. It is suggested to use bullet points to make information concise and easy to read. Don’t forget to add your keywords in the product description.

Be creative with your listing. Target keywords with less competition and high search volumes. Ensure that you use relevant keywords and visual content to help your listing stand out.?

Launch your product

The most important thing to consider after the product launch reviews. The best way to get reviews is to ask for them. Amazon has policies against incentivizing customers to give reviews, so be careful about how you contact your customers. Ask for honest feedback once the product is purchased but never offer discounts or goodies in return.?

Conclusion

Running a private label is not an easy job. You need to be alert and constantly innovate to expand your brand. In order to kick off your brand, it is a good idea to run PPC campaigns early on. Marketing your private label early on is necessary to draw organic traffic and build a customer base for the future.?

Private labels are not a short-term money-making venture. But if you’re doing it right,?you have the potential to become your own boss and create an e-commerce empire.??