Amazon is the top online destination when it comes to online selling. Apart from its rewarding Amazon FBA program, online sellers are also turning to the eCommerce giant because of its private-label opportunity.
Amazon private label has become popular among Amazon sellers over the past years. In fact, it was reported that “Amazon’s private-label offering contains 7,217 products as of June 2019.”
To serve as an overview of the private label business in Amazon, this article will focus on the frequently asked questions by Amazon sellers and would-be Amazon Seller Central members.
Common Queries About the Amazon Private Label
What Is Amazon Private Label?
In the retail industry, most Amazon sellers rely on suppliers for their Amazon inventory. However, Amazon sellers may also opt for private label products.
Photo from Wikimedia licensed under Creative Commons Attribution-Share Alike 2.0 Generic, By Chris from Shenzhen, China
Loosely speaking, Amazon private label begins when an Amazon seller gets a third-party manufacturer or supplier to produce an inventory item under its own (seller’s) brand name, and with the intention of selling it under Amazon Seller Central.
As far as the consumers are concerned, such purposely manufactured items are the Amazon store’s or company’s own brand.
Why Should I Engage In Amazon Private Label?
Venturing into the private label aspect of Amazon does not mean that sellers will have to withdraw from their current Amazon FBA operations.
Apart from exclusivity, sellers also include private label products in their Amazon inventory because some sellers find that sourcing a single product in large quantities is a more effective business strategy. This is far more convenient than having to source many diverse products in small quantities.
How Much Work Does Amazon Private Label Require?
The work required to build a successful Amazon private label enterprise likely depends on the seller’s experience. As with any business, sellers will have to learn the process.
For that matter, it would be advantageous for experienced Amazon sellers to enter into Amazon private label. The learning curve will be less demanding and time consuming for tenured Amazon sellers.
Although experienced Amazon sellers are on a vantage point when it comes to selling private label products, newbie sellers may also learn the process and even master it.
How Do I Choose a Private Label Product to Sell?
In this day and age where communication and digital marketing technology thrives, researching items to sell online has become easier. Generating an idea or choosing an item as a private label product for Amazon inventory can be done through the help of product research tools, such as SellerApp.
When researching a product online, it would be best to stick with inventory items that are easy to design or develop. This will save sellers from being stuck in dealing with unforeseen production issues, including Amazon returns.
How Should I Proceed With Amazon Private Label Products?
After deciding on a private label product, sellers should proceed with the process of creating the private label product. To achieve a successful private label item, the following should be performed by Amazon sellers:
- Research for high-demand/low-competition products (as discussed previously)
- Source researched products through a reputable wholesale marketplace
- Create your brand new Amazon listing
- Negotiate for shipment and have the product shipped to Amazon fulfillment centers
- Launch the product and perform advertising campaigns
How Should I Price Private Label Listings?
Becoming a private label Amazon seller requires sellers to have at least a rough understanding of the price of the private label product. Some sellers use eBay auctions to get an idea of the possible Amazon price to follow.
In pricing private label items, all expenses should be included in the costing, such as shipment cost, PPC costs, and other pre-sale expenses. What other Amazon private label sellers do is price their product slightly below the current market price for increased sales and visibility.
However, such a method is simply a prelude for a subsequent price increase once the private label item has gained market traction. Alternatively, the use of Amazon FBA Fee Calculator will also help sellers with strategic pricing for their Amazon private label products.
What Are the Advantages of Amazon Private Label?
Whether on Amazon or other online selling platforms, a private label holds its own set of advantages. Adaptability is among the advantages of private label items.
When it comes to market demand, things may shift suddenly. There might be other features that consumers may want to be added to a particular product.
In view of such a change, Amazon FBA sellers who also sell private label products can easily instruct their suppliers to make manufacturing tweaks according to the current market need, since their orders are private-labeled.
In connection with adaptability, Amazon sellers also have control over the production. Sellers can conveniently instruct their suppliers to integrate or remove certain components of a private label product according to their preference.
Is There a Disadvantage With Amazon Private Label?
Like with all industries, disadvantages exist when it comes to selling Amazon private label. The main disadvantage experienced by most Amazon sellers is the difficulty of establishing brand loyalty.
Since it is private labeled, building a significant brand may be challenging. The challenge of the process stems primarily from other already established brands whom you are competing with in the same niche.
Expand and Explore Avenues for Profit
If you wish to expand your reach and market influence while benefiting from production, pricing, and branding advantages, private label is a must explore avenue.
However, it should be noted that taking on established brands is no small feat. That is why you should be prepared to commit both effort and resources to be successful with this Amazon venture.