Are you considering starting an e-commerce business on Amazon, but not sure whether to go the private label or brand reselling route? Both options have their own unique set of pros and cons, and the best choice for you will depend on your goals, resources, and expertise.
In this post, we'll explore the differences between Amazon Private Label and Brand Reselling, and help you decide which option is the right fit for you.
Amazon Private Label involves creating and selling your own branded products on the platform. This means you'll be responsible for the entire product development process, including sourcing materials and manufacturing, as well as branding, marketing, and customer support.
- Higher profit margins: As a private label seller, you have control over the entire supply chain, which means you can negotiate better prices with suppliers and manufacturers. This translates to higher profit margins compared to brand reselling.
- Exclusive ownership: With private labeling, you own the brand and have exclusive rights to sell the products. This allows you to build a loyal customer base and differentiate your products from competitors.
- Greater control: As a private label seller, you have complete control over the product development process, including the design, packaging, and branding. This allows you to create a product that meets the needs of your target market and stands out from the competition.
- Higher upfront costs: Creating a private label product involves upfront costs such as product development, manufacturing, and branding. These costs can be significant, especially if you're starting from scratch.
- More complex process: Private labeling involves a more complex process compared to brand reselling. You'll need to handle everything from sourcing materials and manufacturing to branding and marketing. It requires a significant amount of time and resource investment.
- Higher risk: As a private label seller, you bear the risk of any issues that may arise during the product development process, such as quality control issues or production delays.
Brand Reselling involves purchasing and selling products from established brands on Amazon. As a reseller, you don't need to worry about sourcing materials, manufacturing, or branding – you simply buy the products at wholesale prices and sell them on Amazon for a profit.
- Lower upfront costs: As a reseller, you don't need to invest in product development, manufacturing, or branding. This means you can get started with lower upfront costs compared to private labeling.
- Simplified process: Brand reselling is a simpler process compared to private labeling. You don't need to worry about the complexities of product development, manufacturing, and branding – you simply find products you want to sell and list them on Amazon.
- Lower risk: As a reseller, you don't bear the risk of any issues that may arise during the product development process. You simply buy and sell products from established brands, and your only risk is the potential loss of the wholesale price you paid for the product.
- Lower profit margins: As a reseller, you don't have control over the supply chain and can't negotiate lower prices with suppliers and manufacturers. This means your profit margins will be lower compared to private labeling.
- No exclusive ownership: As a reseller, you don't own the brand and don't have exclusive rights to sell the products. This means you'll be competing with other resellers and may have difficulty differentiating your products from the competition. However, you always have the opportunity to sign exclusivity with the brand to be the ONLY seller on Amazon or other marketplaces.
- Limited control: As a reseller, you have limited control over the product development process and can't customize the products to meet the needs of your target market.
