What are Private Label Products and How to Sell them on Amazon

You’re probably already a fan of Amazon as a consumer since it makes it easy and affordable to order the items you need. But have you considered how to turn Amazon into your business partner? Over the past 11 months, I’ve created a business selling private-label products on Amazon, buying a generic product, then selling it under my own brand. The result: a steady, mostly passive income of between $1,000 and $2,000 a month. Essentially, the business involves finding generic products that are already selling well on Amazon, creating your own packaging and logo, and marketing them better than your competition.

Sound appealing? Let’s break it down step by step for an actionable look at how to build your own private-label business. Before diving in, though, it’s important to understand this isn’t a get-rich-quick strategy. While you can really make hundreds or thousands of extra dollars per month, it takes diligence, patience and a willingness to see an idea through from start to finish. To be most successful, set your expectations accordingly.

Still interested? Let’s get started.

  1. Research and select a product. This is arguably the most important and time-consuming step in the process, but the friendly folks at Amazon lighten the burden a bit by pointing you in the right direction. That’s because the site releases detailed lists of their best-selling products. While the lists are designed to give consumers a chance to see what’s popular, you can use them to your advantage, too. The best-seller rankings essentially serve as your pre-market product research. Instead of developing a product and then testing to see if it sells well, you can start by seeing if the product sells well and then make a decision regarding whether or not you want to pursue it. When mining Amazon’s top-100 rankings for each category, be on the lookout for items that are lightweight, high-ranking and generic. Generic refers to something like a water bottle, silicone spatula or flashlight, all items that can easily be produced with your own brand and packaging. In other words, you wouldn’t want to select a product that’s brand-driven because those are protected products that can’t be privately labeled. Once you find a product that you’re interested in, it’s time for phase two of the product research stage.
  2. Find a contact a supplier. Once you know you have a good product opportunity, it’s time to find a supplier. While it’s possible you could find a supplier in the U.S., it’s highly unlikely that you’ll find a cost-effective one. Start your supplier search by entering the same key phrase into the Alibaba search box. In this case, a simple search of “insulated water bottle” will give you thousands of different products and suppliers. Find the style you’re looking for and research a few different suppliers. Depending on how thorough their listings are, you can usually see the required minimum order quantity (MOQ), price range, style options, lead time and whether they allow for private labeling. However, you’ll need to email the supplier to get an accurate quote for your order. Generally, there’s also room for negotiating prices. Just act confident and pretend you’ve been there before, even if you haven’t!
  3. Get your logo, design, and packaging. To save time and streamline the process, you can often work on step three alongside step two. Once you’ve found a supplier who’s willing to let you private label the product, you have to choose your marketing materials. Don’t worry, though, you don’t have to create them yourself! Use a website like Fiverr or Upwork to hire professional designers at competitive prices. On Fiverr, you simply search for designers and then send them your job proposal. On Upwork (formerly Elance), you’ll actually create a project proposal and have designers bid for your project. I’ve used both sites, but prefer Elance/Upwork for packaging and logo design. Assuming you’ve had time to develop a brand name during this process, you’ll want your designer to create a logo that represents your brand and vibrant packaging that sets it apart from your competitors, the ones listed in your spreadsheet from step one. Once you have your design files, send them over to your supplier and tell them to proceed with your order.
  4. Craft a compelling listing. Depending on your supplier’s lead time, you could wait anywhere from 10 to 30 days for your shipment to arrive. Use this time wisely.Start by focusing on your listing. Follow Amazon’s directions and protocol for creating a seller account and then create a listing for your product.

To create a compelling listing:

  • Use high-quality images
  • Clearly explain how the product works
  • Describe why it’s valuable
  • Highlight what sets it apart from the competition

While you’ll have to work within the constraints of what Amazon does and does not allow on listings, you should be able to use bolded text and bullet points to accentuate key facts. As you likely noticed during step one, many sellers don’t do a good job with their listings, yet still sell well. Can you imagine how many more units they would sell with descriptive listings? This is your chance to set your product apart and differentiate your brand as knowledgeable and informative.

  1. Use FBA to create passive income. Some of you are probably saying, “This whole process doesn’t sound like passive income.” Well, up until now, you may be right. However, assuming you did a thorough job in the previous steps, you’re almost ready to sit back and reap the benefits. Thanks to the Fulfillment by Amazon (FBA) program, you don’t have to manage the monotony of picking, packing and shipping orders. While FBA takes a small percentage of your profits, it’s well worth it for most sellers. Your shipping costs are included in the fees and your products automatically become eligible for free Prime shipping, which could help you make more sales. Plus, FBA sellers often enjoy higher search rankings than non-FBA sellers. While Amazon hasn’t officially confirmed this, I’ve noticed it with my own products and friends have seen similar benefits. For detailed information on how to set up an FBA listing, how it works, pricing, success stories, and more check out Amazon’sguide for getting started. Once you set up your listing and ship your products to the distribution center, you can be as hands-off as you’d like. When a customer makes a purchase, you don’t even have to lift a finger. Amazon’s fulfillment centers take care of everything, including returns and customer service issues.

 

  1. Make your first sale. In any business or industry, the first sale is typically the hardest to make. You don’t have a reputation or any existing customers, so it can be challenging to convince someone to purchase your product. Many sellers run some sort of sale or discount during a product’s launch. By reducing the price, you lower the customer’s perceived risk and entice them to take a chance on your product. You can also use Amazon’s internal advertising system, which allows you to pay for your product to be listed in relevant on-site searches. This is a great way to increase visibility and attract an initial burst of sales. Another option is to use Google AdWords to drive traffic to your listing.While these are the most common strategies, there are hundreds of other ways to increase sales and traffic. This is where you can get creative and have fun with your product! Or, if everything is working on its own, simply sit back and let the passive income accumulate.

Don’t overthink the process. You now have all the tools to choose a successful product, go out and do it!

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