Selling online isn’t as complex as some people think. In fact, the very success of a large number of people in this industry is proof that it’s possible to achieve success in this industry.
Every business comes with certain kinds of risks and private selling isn’t free from such risks but if you take time to master the basics, it will work for you.
Here is a brief guide that broadly outlines what you need to achieve success selling branded products online.
Find a niche market and research thoroughly
Figure out the products people in that niche wants and you can sell
Research online to discover potential competitors
Find ways to pay for the upfront manufacturing costs
Research in order to find a reliable and trustworthy private-label manufacturer
Focus on creating your own brand and finalize the brand elements
Order the first batch of product from the private-label manufacturer
Start your own website and/or start selling on Amazon
Prepare and execute a marketing plan
Interact with your customers in order to make improvements to the next batch of products
These are the steps that will help you achieve what you want. It will take you some time to learn things and you will also need to learn some new skills. However, don’t have any doubts about your ability to learn the skills needed to succeed in this business. The only thing you need to succeed is persistence and a little research.
Starting an Amazon FBA Private-Label Brand – From Any Country
While it is not difficult to succeed in this business, it does not mean that selling online is easy. However, it’s not as hard as some of the gurus in this space make it seem.
In this journey, you will need to make a number of important decisions. In this guide, I am going to highlight the challenges your company is likely to face along the way.
Before you start this business, you need to be acutely aware of the roadblocks you are likely to face. I am going to share strategies to help you overcome those roadblocks.
The first thing you need to start a private-label business is capital. You need to have money for branding, initial product runs, shipping, customer service and marketing. Of course, you can bring down the per-unit cost by ordering more.
Private branded products can be sourced by resourceful entrepreneurs for low prices, even as low as $500. Everything depends on your approach.
In order to make sure that your set up is legal, you will need to register for business tax ID with the IRS. Make sure all your financial records are always up to the date and seriously consider utilizing the services of a tax preparer.
Additional Tips for Creating Your Own Brand
If you end up choosing the wrong niche, it’s going to be a really expensive mistake on your part.
If you do not do your research and end up choosing a supplier who is not good at their job, you will have a really expensive problem to deal with. Keeping control of the quality of your product is really important.
Pay attention to the packaging as it has the potential to harm customer experience. Branding is important but protection of the product during shipping is also important.
It can be difficult to set profitable product price points as a number of variables can affect your profitability.
The market might shift and sometimes, the hype is already over before you are up and running, and you’re left holding the products.
Wholesale vs Private-Label vs White Label
If you are a beginner in this industry, you need to understand various terms that e-commerce companies use to define their relationship with their suppliers. If you want to make money in this business, you will need to focus on finding the right suppliers and the right business model for your e-commerce shop.
White label is defined as a product when you take product made by someone else and stamp your own name on it. You are selling a product that is controlled, serviced and developed by someone else.
Private labeling is the process when you sign a contract with a private-label manufacturer to produce a particular product created as per your specifications. This product offers the highest possible profit margin as you are paying others only for manufacturing.
The process of wholesale is where you make a deal with a supplier to buy goods from another brand. You will buy products in bulk and resell those products. Everyone involved in this process knows that you are acting as a middleman.
There is no denying that not everyone is clear about the differences between private-label and white label products. It is important for you to make sure that your understanding and definition of a particular product matches with the definition of your suppliers. Proper communication is the key. Timely communication will help in making your life easy throughout your career in the e-commerce industry. You want to invest time and energy into partners who understand your needs clearly.
Coming up with Private-Label Product Ideas
If you’re wondering how you’re going to come up with ideas for private-label products, the only thing that is stopping you is your ability to do market research and your creativity. Anything you can think of can be privately built. You will get the best price from private-label manufacturers when you order in bulk. Therefore, you need to choose the right products for development and production.
Pro Tip: Begin with products that are easy to design/develop unless you’re an engineer. You do not want to deal with unforeseen product issues after placing a big order. Increased complexity also increases the probability for faulty products which, in turn, will increase your return rate.
There are a number of tools available for finding market opportunities. Use keyword research to discover hot trends on Google. If people in increasing numbers are searching for answers to a particular problem, it means you could introduce a product to meet the demands of a growing market.
Another place to research is Amazon. Find products with a lot of negative reviews. Products with a lot of negative reviews offer an opportunity. If you are able to develop a better product that provides a better solution at similar price point, you have a winner at hand.
It is important to perform industry research. Start to dig deeper to find the trends seen by professionals. Do some research to figure out the true size of the market and whether the market is retracting or growing.
Use Jungle Scout to Find Products
Are you aware of Jungle Scout? It’s an extremely powerful tool. It’s a database of trends that is capable of providing a lot of insight into searches and purchases on Amazon. If you have thought of a product, use this tool to discover the size of the market. You can also discover competitors with this tool. Their dashboard is extremely powerful and allows you to filter product opportunities on the basis of competition in the market saving you from wasting time on a product in a crowded category.
Pro Tip – Jungle Scout allows you to filter products with a ton of reviews but low overall rating. This combination shows that there is demand for this product and there is also a lot of room for improvement. If a product has a lot of poor reviews, it means there is an opportunity for you to enter the market.
Type of Products Often Sold under a Private-Label
Are you still wondering about the type of products you could sell online? In the section below, I will outline the most popular product niches where private-label sellers are experiencing a lot of success.
There is no denying that private-label products are experiencing higher success than ever. Here are some of the most popular product categories for private-label products:
Apparel and Accessories
Private-label brands really shine in the clothing market as customers love to try new brands that can help them stand out. There are more than 100 items of fashion and clothing in an average closet in addition to purpose driven outfits such as those for a day out at the beach or for working out.
You can hire manufacturers to white label or private manufacture any of these products:
Hiking boots for women, tactical backpacks, maternity dresses, jean shorts for women, rain ponchos, and yoga pants for women. The respective monthly searches on Amazon for these products stand at 26k, 36k, 12k, 36k, 30k and 6k.
Cosmetics and Skincare Products
If you’re not aware, you should know that private-label skincare and cosmetics is a big business. It is estimated that the skin skincare industry will reach $180 billion by the end of 2020 and cosmetic products enjoy insane margins. People are increasingly becoming aware of the ingredients used in cosmetics and they are conscious about the ingredients in a product and what they’re putting in their body. Think along the lines of natural or vegan etc.
There is a huge shift in the cosmetic industry with consumers demanding healthier skincare products and this opens up an amazing opportunity for entrepreneurs looking to establish their own private-label business for shoppers who want to make a change.
Here are a few examples of categories of cosmetic products that could be privately manufactured:
Cruelty free make-up, Charcoal toothpaste, tea tree oil, coffee scrub, natural deodorant, organic sunscreen, Elf make-up and anti-ageing face cream. The respective monthly searches on Amazon for these products stand at 638, 35k, 130k, 5k, 28k, 11k, 25k and 11k.
White labeling these products is much easier but you could try and get the manufacturer to get rid of the sulfates and parabens in your products.
Packaged Food Products
Private-label food brands cater to health-conscious consumers who like to buy online. Think of consumers with preference for non-GMO, gluten free, organic and vegan products. Online shoppers also prefer custom sweets and other such products in addition to health food. The marijuana laws in North America are loosening and this has also led to a surge in demand for such edibles. If you do not want to sell marijuana products online, you might find success selling a gluten-free snack brand.
Here are a few products that are extremely easy to private-label. You only need to focus on the packaging.
CBD gummies, gluten-free snacks, keto snacks, Matcha green tea powder and organic baby food. The respective monthly searches on Amazon for these products stand at 32k, 20k, 89k, 32k and 9k.
Hair Care Products
People have different kinds of hair care needs which makes it a huge market with an almost limitless customer base. There are thousands of segments ranging from bald men to natural curls and others.
Here are a few ideas in this product niche:
Human hair bundles, hair mask, Beard oil, hair growth shampoo and hair growth vitamins. The respective monthly searches on Amazon for these products stand at 21k, 26k, 61k, 12k and 11k.
Supplements are used by people for dealing with a variety of personal issues. And, once again, Jungle Scout is your friend. Since supplements have high retail prices, a large segment of this market has moved online. Consider the example of Dr Axe who runs a site that makes a lot of money with private-label supplements.
Here are a few well selling supplements right now:
Creatine, detox tea, vegan protein powder, turmeric curcumin and testosterone booster for men. The respective monthly searches on Amazon for these products stand at 83k, 27k, 58k, 65 and 20k.
The examples mentioned above are only a few examples of product categories but there is one common theme among them. Every single product listed in the above examples can be marketed with the help of Facebook ads and influencer marketing. Also, these items do not cost a lot to produce when ordered in large quantities which means these are products with exceptional profit margins.
You’ll be surprised to know the extremely low cost of manufacturing common cosmetic products. For instance, find the cost of making a container of a foundation or that tiny bottle of eyeliner, and you’ll find that margins on these products are insane.
Finding a Reliable Private-Label Manufacturer
The private-label manufacturer you choose for your business is the most crucial element that will play a huge role in the success/failure of your business. You might have the ability to manufacture products in-house but it’s a challenging process. You will have to deal with capacity issues and quality control as you will struggle to figure out the most efficient process to manufacture in-demand products.
It’s not easy to test a new manufacturer, especially when you cannot afford to spend too much money on testing. Therefore, it is important for you to do a lot of research in order to partner with a reliable private-label manufacturer.
It can be a challenging process but you shouldn’t worry too much as it is not extremely complicated. I’ll show you how to wade through those waters.
I provide in-depth training where I share the process I personally use for finding and securing the most trusted companies in the field of private-label manufacturing. In this training, I cover many areas including:
Domestic or foreign manufacturers
Common scams and how you can avoid the scams
My personal process for vetting a private-label manufacturer
Communication strategies to be used for engaging a reputed manufacturer
I’ll make it easy for you to find great private-label manufacturers with the help of information included in my courses and I will also tell you how to make them take you seriously.
Platform to Sell Private-Label Products
It depends on the type of market you have identified for selling a product. Typically, it makes a lot of sense to sell your private-label products on a third party platform. The most popular e-commerce platform in the US is the Amazon but selling private-label products on Amazon has its own pros and cons.
Pro Tip: Amazon also competes with sellers on their e-commerce platform and it competes aggressively. If you think that you have struck gold with a particular product, remain assured that Amazon is on to you. Therefore, you need to always have multiple sales channels to sell your private-label products.
There is no need to panic as there is no lack of niche markets. One company cannot cover all the markets as there is a lot of diversity.
Generally, I recommend business owners to build and market their own e-commerce site. In this manner, you will be able to maximize long-term profits with private-label products as you avoid the listing fees and commissions on third-party platforms such as Amazon. You will be able to reach your target audience much quicker by selling products on a third party platform but you will have to pay a cost. Therefore, you need to make a decision.
You have the option of building your own website and market it to reach your target market or you can sell your products to the established customer base on Amazon. You also have the option of doing both.
In the beginning, you could sell on Amazon to get some cash flow going and at the same time, you can start building and marketing your e-commerce site. One of the ways to do this is by building an Amazon affiliate store.
Product Pricing Strategy – Include Warehousing and Shipping Costs
Amazon offers a program known as Fulfillment by Amazon or Amazon FBA. In this program, you ship the products directly to an Amazon warehouse. Once the products reach the warehouse, those products will be shown as in-stock on Amazon’s website.
This program also qualifies your products for Prime shipping along with many other Amazon benefits liked by Amazon shoppers. Customer service is also offered by Amazon for your product orders and it’s a great benefit, especially when do not want to deal with customers over the phone.
If you want to know about fees, it’s not that difficult to estimate fees charged by Amazon for FBA/MCF
Here’s what you need to do:
Check Amazon profitability calculator and choose a product that is similar to your product. You just need to punch in the estimated product cost to figure out the fees.
You have to decide now whether the benefits offered by Amazon outweigh the costs associated with it.