The Amazon marketplace is undoubtedly the most lucrative company in the ecommerce space. Amazon features different business models that Amazon sellers can choose from. One of the most popular business models that contribute significantly to Amazon's success is the Private Label.
According to data from Jungle Scout, 59% of Amazon sellers use the Amazon Private Label business model for their business.
Selling on Amazon using the Private Label model involves taking existing products, branding, and selling them on the Amazon marketplace as your own.
In this article, we will look at what the Amazon Private Label is, the benefits of selling with Amazon Private Label, and how to start selling on Amazon using Private Labeling.
Private Label products are simply products manufactured by a company but branded and sold by another. In other words, this product already exists in the market.
You can improve a popular existing product and sell it as your product on Amazon FBA. This means you don't have to go through the rigorous process of developing a new product.
Perhaps there's a popular item that sells very well on the Amazon marketplace but only has a few aspects that customers complain about. Imagine if you could sell a better version of that product to customers? You could gain massive market share and increase sales on Amazon.
As we mentioned earlier, the Private Label model is the most popular business model, and for good reasons. Here are a few benefits of selling Private Label products on Amazon:
One of the greatest benefits of the Private Label model is that you can build your own brand. Unlike the wholesale model where you resell products from other brands, the private label allows you to brand your products, determine your prices and grow your business. If you build a strong brand and offer great products, customers may see your business as credible and are likely to buy from you even when you add new products to your Amazon inventory.
You can customize your product however you want. Customer reviews can provide great hints to help you make your product better. You can look at them to find out the issues customers have with the product and work with your manufacturer to improve the product. It is important to note that simply placing your logo on an existing product may make it difficult to compete. However, by improving your product, you can beat the existing competition, and increase Amazon sales.
By improving and offering great products, you can strategically position yourself in the market, lower your competition and increase Amazon sales. You can also easily expand your business by offering more products.
You also won't need a middle man meaning you can purchase Amazon inventory at the lowest possible cost.
As we mentioned earlier, you can modify an existing product and sell it as your own. Here are a few factors you need to consider when sourcing private label products:
Selling private label products on Amazon comes with multiple benefits including higher profit margins, increased credibility, and brand awareness. Let’s go through simple steps to start selling your private label products on Amazon.
The most crucial step to selling with private labeling is product research. To succeed on the platform and increase sales on Amazon, you need to make sure you pick a product that customers want. In fact, this is a crucial step no matter the business model you use.
In choosing a profitable private label product, you need to analyze data to help you make an informed decision.
Consider going through Amazon’s list of best-selling products to get insight into what is in demand. Avoid choosing saturated product categories. Instead, you can dive deeper into subcategories to find newer products you can sell on Amazon.
Consider factors like the price of the product, number of sales per month and year, listing quality, and average number of reviews and ratings. When going through these factors, consider products that need some improvement both in the listing quality and product development.
Also, look for products that are easy to sell, non-seasonal, and uncomplicated. For example, selling products like groceries may be complicated as they require certifications and legal compliance, making it difficult to sell.
An example of a private label product on Amazon is Amazon Basics. They offer in-demand products at very affordable prices and are one of the most successful private label products on Amazon.
After choosing the best private label product, you need to get a supplier that will manufacture your product. You can get suppliers using platforms like Alibaba and AliExpress. Reach out to different suppliers, compare your options and find a supplier that can offer you quality products at an affordable price.
Once you pick the best product to private label, the next step is to invest in branding and packaging. Branding goes beyond sticking a logo on your product. You need to work on your overall brand identity. What do you want your customers to feel about your brand? This will influence your color schemes, logo, and packaging. You may need to invest in a graphic designer or work with a brand manager to give your product a professional look. Also, your branding and packaging needs to cut across all customer touchpoints including your Amazon listing, website, social media pages, and so on.
To start selling on Amazon, you need to arrange for your order fulfillment. You have the option to sell with Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM).
With FBM, you have full control over the picking, storing, shipping, and customer service. However, using FBM might get tedious and time-consuming.
If you want to ensure efficiency, consider using Amazon FBA. All you need to do is send your Amazon inventory to Amazon warehouses and Amazon will handle the picking, packing, and shipping of your orders to customers. They will also handle the returns and customer service. This will help you save time to focus on other areas of your business.
Also, selling with Fulfillment by Amazon gives you access to over 200 million Amazon Prime users who are willing to pay more for faster shipping.
After you’ve picked your product and negotiated with your supplier, the next step is to create your Amazon listing. This is where all the action happens.
Creating a compelling listing is essential to getting the attention of potential customers. You want to start by researching keywords for your listing. After all, how can customers find you without the right keywords?
Next, take your time to write a compelling product title, bullet point section, and product description. Include relevant keywords in all sections and focus on highlighting the benefits of the product.
Invest in high-quality images that show your products from different angles. You may want to consider using Amazon A+ content to create your listing. You can also include Amazon product videos to capture your product in motion. This will help improve your credibility and push customers to purchase your product.
After creating your listing, you need to get customers to see it. One effective way to do this is through Amazon advertising. You can use the three major Amazon advertising solutions including Sponsored Products, Sponsored Brands, and Sponsored Display Ads. This will get your products in front of potential customers and improve your organic search rankings in the long run.
Have you always dreamed of building a brand? With the private label model, you can establish your brand and expand your business. We hope this guide gives you an idea of what Amazon private labeling is and how you can start selling private label products on Amazon.