You want to sell private label products on Amazon.
That’s great!
Amazon accounts for nearly $1 of every $2 spent online. Experts predict that Amazon will become the dominant retailer in five to ten years. E-commerce will also account for almost 80% of all grocery and other purchases.
Selling on Amazon FBA is easy.
Amazon employees handle all the hard work, fulfillment and customer service. This means that you can spend your time on product research and marketing.
Before we begin with the Step-by–Step Guide on How to Start an Amazon Private Label. It’s important that you remember that Rome wasn’t built in a day and there is no guaranteed way to make your products a overnight success.
These are questions I know you’re asking, and I’m here to help.
Are Amazon FBA sales becoming less profitable?
It is not possible to do so unless you are looking to compete with 239 sellers for the same listing, as shown in the photo below.
You’ll be the sole seller of the product if you do your research and find the right product.
Tutorial on Selling Private Label on Amazon
Is Amazon’s market saturated?
It is not, and it will not be, unless you plan to import generic garlic presses at a low price and list them on Amazon FBA. It is not fully saturated.
The industry is growing because there’s more competition. This doesn’t necessarily mean that you make less, but you will need to work harder, smarter, and better to make it happen.
While it is true that every dog and every dog sells on Amazon, on the other side, Amazon is where everyone, their mother and their dog buy.
Although there are many million-dollar ideas out there, ideas are not worth anything. Execution is the most important thing. Without execution, an idea is nothing.
Stop looking for courses and register for an Amazon individual account to identify quality products and get experience listing them.
You will be faced with a million questions as you travel this route. These can be answered by searching the internet or through forums.
There is no one teacher or guru who can teach you everything that you need to become an Amazon seller. It all comes down to the product, the demand for it, the competition in the marketplace, your marketing budget and your marketing skills.
Don’t waste money on a course. Start small and spend that money on the product. You’ll learn more by doing it than any course.
Although the process is relatively straightforward for most people, there are still many things to know about how to get your product from Amazon’s warehouses to sale and how to make it sell well.
Another option is available. You can make a smaller investment upfront and see growth over time. You have two options: either you do it, or you can unsubscribe to the podcasts. It doesn’t really matter if you make a few hundred dollars a month.
Your first product launch will provide you with valuable experience about what to do and not do. If you are ready, this article will save money and headaches.
Here’s the Step-by step guide on how to start an Amazon private label business. These steps can be used as a checklist.
How to start an Amazon FBA private label – The Ultimate Guide
Find a niche (You can use Jungle Scout)Product researchFind a supplierCreate a logoSamplesFinalize negotiations with the supplierSetup Amazon accountUPC or brand registryPhoto shootingKeyword researchSet product pricingCreate listingOrderProduct launchPPC campaign (marketing)Conversion rate optimizationEmail marketingEvaluationLegalities
How to find a profitable Amazon niche
You should choose a category you are interested in, or have a natural affinity for. You don’t have to be a brand name to sell products in this area.
Appliances, kitchenware, accessories for pets, and phone accessories are all examples. It doesn’t matter if you find the perfect product.
You can follow all the podcast rules that require a product to have x number of sales, less than 100 sellers, x reviews, be small and light. It will be difficult to find the “perfect” product, as most of these products are already saturated with sellers.
Do not limit your search to the perfect product. You’ll likely be selling several products in your niche, since you’re building a company.
Why is this important? You can only select one category when you submit your brand registry application. Amazon allows only one unique identifier. However, Amazon still offers the possibility to select more than one category in the application.
This will result in your application being placed in limbo. The only way to fix it is to have the applicant cancel the application and then reapply. We have stopped approving applications that contain multiple key attributes because we believe this causes listing errors.
Please send me a message with one key attribute. It will be much easier if you expand your reach to similar niche products. It might take some time to scale a private label brand. Once you have, you will want to expand into similar products to increase your revenue streams. These streams will allow you to attract customers from other avenues, which will increase your sales.
This can be done manually or with Jungle Scout which is one of my favorite tools for product research.
How to find the right product to sell on Amazon
The most tedious part of the process is when new Amazon sellers are stuck with product research. This is because it’s one of the most important steps. Even though everything can be done perfectly, choosing a great product could mean we lose our investment. It is important to research and plan carefully for the product selection stage.
Amazon is able to sell almost every product. Is your product going to be competitive? This is what you need to be focusing on, not just whether there are enough sales.
If you are able to create something that has a high margin and positive ROI, volume is not necessarily all-encompassing. You want to make money. Do not try to invent the wheel by creating a product that no one has ever heard of.
It is not available on Amazon. It would not be searched for by anyone. You need to build a solid brand. Finding a product to privately label is the first and most important step.
Although this is the most difficult step, if you do enough research and are prepared, you can create a product that generates income on autopilot. These are the main criteria you need to look for:
See the 15 best-selling items on Amazon
The product must have a positive Return on Investment (ROI).
A new seller’s most common error is to calculate profit margin without considering ROI. For example, let’s say you are comparing two products, a knife and spoon. The profit margin for the knife was 30%, while that of the spoon was 20%.
The ROI for each investment is different for knives and spoons. Knives have a ROI of 53%, while spoons have a ROI of 120%. If you only looked at the profit margin, it’s obvious that you would have made mistakes if you went for knives. However, the ROI calculation shows how much more advantageous it is to invest with spoons.
Let’s take an example to show you how to understand the concept: Say you have $1,000 to spend and you need to decide between can opener and bottle.
Bottle opener retail price $15 Shipping and handling costs to Amazon are $5. You can purchase 200 unitsAmazon fees: $5. Profit margin: 33% ($15-1010)/$15*100ROI ($5/$5): 100% (profit margin/costs of goods at the end)
Let’s now calculate the can opener.
The retail price for can openers is $15. Shipping and handling costs to Amazon are $7. Total cost per unit: $10Profit margin is 33% ($15-$10)/$15*100ROI ($5/$7): 71%. At the end, you will have $1,715 in your pockets
A bottle opener, even though it has the same profit margin is the better investment. If both products are in the same time frame, you can earn $285 more for the same amount of money. You will get a higher return on your investment, which means you can reinvest it sooner and have more inventory available.
Alibaba can source product for as low as $10
Customers will not buy your product if it is significantly more expensive or of higher quality than the ones they already have.
Even if you have the money to invest in a high-demand, higher-priced product that is highly sought-after, I would advise you to start with a lower-priced item to get your feet wet. It is very difficult to sell a high-end product.
If the brand is well-known and established, people won’t shop on Amazon for expensive clothing. Customers won’t buy based solely on the price if they don’t know what the brand is.
A product that’s not too heavy or too large
If you don’t, Amazon FBA fees and transport costs will eat away all of your profits. Underestimating Amazon’s fees is a dangerous mistake that new sellers often make when researching Amazon products. To quickly estimate the impact of Amazon’s fees, you can use Seller Central’s fee calculator. It uses ASINs or similar products. Use FBA Revenue Calculator to estimate FBA fees
Similar products have a 5000 Best Seller Rank or lower in Main Category, but less than 100 reviews
BSR stands for best seller rank. BSR is a measure of how well a product sells in its category. This indicator shows whether there is demand for the product on the market. Because they are in high demand, I recommend that you target products within the BSR range of 1000 to 5000.
Pay attention to BSR when analyzing the main categories as well as subcategories. Products that sell in the main categories with a BSR less than 5000 should be included in this category.
Subcategory BSR doesn’t give a good indication of the product’s success because they are narrowly focused on specific product niches and not a broad range of products that are being sold.
There are no national brands on this market
It’s obvious. They’ll have enough trust and authority that they will draw most customers to them. Without a lower selling price, it’ll be difficult to compete with them.
2-3 Products with less than 100 reviews on the first page
100 reviews may seem excessive, especially for a seller new to the market.
Non-seasonal Products. Items whose use does not change according to the season
Is your product able to sell throughout the year? You can’t afford to sell your product for three months. Also, as a seller new to the market, you won’t be able to plan on how to buy and manage seasonal inventory.
This is why non-seasonal products offer more opportunity. Jungle Scout can be used to automate the process and quickly find products that meet all criteria.
Learn How to Find Profitable Products on Amazon
How to Negotiate with Alibaba Suppliers
Remember that you only make half of your profits by buying low and not selling high. Your competition determines the selling price, and Amazon fees are unaffected. Your margins could be significantly improved if you can control the price of your supplier’s purchase.
Keep in mind that everything is negotiable when you deal with Chinese sellers. You also have the power and money.
Looking for products on Alibaba
Alibaba.com allows you to search for products. Contact minimum 10 suppliers by asking concise, clear, precise, and concise questions. It is not difficult to communicate in Chinese. Compare prices with 1688.com (Chinese Version of Alibaba). Order a sample for $50
1688
Introduction email template
Hi, my name is Peter KochI’m interested in your product for Amazon. I have some questions.
Do you offer DDP/DDU parity? Note: Every serious supplier offers this option. This means that they know what they’re doing. What is the lead time (manufacturing) after I place my order?
The annual production is estimated at 5,000 to 10,000 units.
All my best wishes
Peter Koch
Make a logo
Although you can hire a designer through Fiverr and Upwork, I recommend using a manufacturer’s designer. Nearly every factory has one, and they will complete it for free. You can send them a freehand drawing, or your brand name in a Word document. This will help them know how to print it on a product.
Get your UPC
You can buy them at a discount from third-party resellers via eBay. However, this is against Amazon TOS.
Alibaba – Orders
I recommend buying 500 units at most. I would recommend buying 4 to 5 products, rather than one large inventory. Multiple opportunities for success will increase your chances of success.
Air cargo is a good option for small quantities and the start. Your supplier can do all the work. You can also contact UPS to arrange delivery. To avoid additional taxes and customs fees, ensure that your order is under $2,300.
Resource: Send FBA inventory (FBA) to Amazon
Amazon: Start selling
You are now ready to sell on Amazon. Now is the right time to set up an Amazon seller account and create your store.
Create an Amazon Account
Register here to sell your products directly to millions of Amazon.com customers. Here is the list of countries that Amazon.com supports as international sellers. A Payoneer account is required if your country is not on the list. Register your Payoneer account to be able to withdraw payments to your local bank account.
Register
Your photos and title are the most important parts of your listing. Many customers will not even see your main photo, and few people will read more than the bullet points.
Hire someone to write descriptions, bullets and titles if you’re not a good writer. To increase traffic to your listing, you can use multiple keywords in the title. I recommend AMA Keyword Generator for keyword research. It is a powerful tool that generates keyword ideas.
It is important to know which keywords are being used by competitors in order to get business.
A seller who does his job well will have his most important keywords in the title and bullet list.
You don’t need any tool! !
Updated November 2019. These tips from Amazon for keyword optimization were released by itslef:
Keep it under the length limit. Include synonyms. No need to misspell.Include abbreviations.
Launch of Product
You don’t have any reviews at the start of your Amazon FBA journey. There are no sales, zero sales, and your product has not been given an Amazon seller rank. You can find a product on Amazon once it goes live. No matter what search term you use it is difficult.
It will be harder for customers to find your product if it is difficult for you. If they don’t find it eventually, they won’t buy it.
Reviews are the best – I have noticed that those who were willing to give away thousands of products for reviews had a lot of success. It is very difficult to get organic reviews.
What should you do? You have one job: Get as many reviews and sales as possible within a very short time period after your product launches. Once you have done it, Amazon will rank it and begin showing it to customers organically.
Ask your family, friends, and neighbors to help you find the product on Amazon. Then, buy it at full-price.
Do you see a pattern? Do not send them a link to your product. Let them search it for themselves. Amazon will rank your product higher for this search term.
You won’t have to worry about Amazon or incentivized reviews if they buy at full price. You’ll also have social proof by including a review. This will allow potential customers to see that it was a verified purchase.
NOTE: Your own website can be used to support your sales. Create a Shopify or WordPress store, and add contact information and the product. Login with Amazon is a way to connect Amazon and your site.
Login with Amazon App allows users to log in with Amazon accounts, select their delivery address and payment method, then they can check out. It’s simple and pleasant, but that’s not all. Here’s the beauty part.
Register for Amazon Affiliates. On each product page, add an affiliate link to Amazon’s product listing. This will allow you to earn 1-10% depending on the category. You can become an Amazon affiliate to sell your products. Amazon will also pay you a commission.
Amazon will charge higher MCF (Multichannel Fulfilment) fees and the Shopify site must have equal or higher pricing. Amazon will ban your Shopify store if it has a lower price.
PPC Campaign (Pay per Click)
Once you have received at least two reviews, turn on your PPC. To establish a profitable and long-lasting presence in sponsored ads, you need patience and organization.
This is how I recommend you do it if you’re starting sponsored product ads.
Find keywords. AMA Keyword Generator can be used to research keywords. Amazon won’t charge you this much, but they will charge you more often than necessary. However, this high bid is what you need to rank on page one for this keyword. You can lower your bid later once you know the cost of clicks.
Conversion rate optimization
Views tend to increase with time but you don’t want to sit still and wait.
Engaging, eye-catching and high-quality photos of your products will improve the click-through rates. Hiring a professional to take photos of your product is a great investment for a successful product line.
Customers are now on your list and you want them to convert
Review and price are the drivers. They will only convert and increase conversion rates. This is important as it improves SERP positioning.
Spend hours perfecting and creating your TITLE, BULLETS. Add a DESCRIPTION. Hiring a professional photographer is advisable. The number of customer searches you appear on can be more than doubled if you use the best keywords.
You can hire someone to review your listing on Fiverr or Upwork. Or pay someone who does marketing at your college to check it out and ensure that it fits your target audience.
Email Marketing
Follow-up emails should be sent for each purchase. Also, organic reviews are encouraged. It can be done manually. That is how I did all my follow up emails. This is time-consuming and tedious work that FeedbackGenius can automate. This app sends out auto-feedback popups to thousands upon daily basis.
Evaluation
Amazon sales will come later if I list on Amazon. These ideas don’t get any time. Only things that I can make money from day one are what I focus my efforts on.
It is important to source great products.
Images must be stunning.
Your title, bullet points, and description should be clear and concise.
Excellent customer service is essential.
Launch your business with a poor design and without a marketing plan! !
Legalities
Although I am not a CPA or lawyer, I recommend that you do your research before signing up. If you have any additional input, please leave a comment below. We can help beginners who are just getting started on Amazon FBA. I hope that this helps at least one person reading this.
Useful Resources and Tools
These are the tools that I use to run my Amazon private label company.
Full disclosure: I may earn a commission from you if they refer to affiliate links.
Jungle Scout is the most powerful and popular Amazon product search tool. Jungle Scout is a great tool for product research. It can save you money over the long-term by helping you choose the right product. Here you can read my full Jungle Scout reviewFiverr: Photography, listing copy, keyword research, logo creation, product designShopify: Your brand should always have an online presence and with Shopify, it is easy to create your own online storeFulfillment by Amazon Revenue Calculator: Check various FBA costs and your product profitabilityGoogle Trends: Is the product seasonal?Xerro: accounting and bookkeepingAlibaba: Product sourcingFeedbackGenius: Send out automated emailsIgnite: If you’re looking for a tool to help you optimize PPC, then Ignite is a candidate. This tool can make suggestions for you to increase bids, add negative keywords or move keywords to other campaigns. These suggestions were very eye-opening for me.
Continue reading: How to Sell on Amazon: A Beginner’s Guide
How to start an Amazon FBA business in 2022 – Step-by-Step Guide Dollarsanity.
