Amazon has changed the way people shop for the past couple of years because of its first-class shopping experience. People tend to order online as compared to going shop to shop to buy different stuff. Amazon offers outclass services to the buyers and the sellers as they can easily get registered with FBA (Fulfillment by Amazon) or FBM (Fulfillment by Merchant) to sell your products. You can either go for Amazon private label with FBA or FBM, depending on their business goals.
This blog post discusses selling private label products using Amazon FBA or FBM and how to succeed with it. I will discuss different guidelines that are required to be successful in an online selling business. So, if you are looking forward to learning about Amazon private label business, read this post till the end to go through everything.
Follow this step-by-step guide if you're a beginner and want to start your business with Amazon private label.
1- Decide your Niche
The first step of selling private labels on Amazon is deciding your niche, as it is the first and most important step to start. I highly recommend choosing the trending and profitable niche. In addition, it should be related to your passion and interest. In this way, you will be able to generate a handsome amount of money.
Here are the best niches for Amazon private label business:
- Office Products
- Industrial and Scientific
- Luggage and Travel Gear
- Pet Supplies
- Home and Kitchen
- Sports and Outdoors
- Tool and Home Improvement
- Garden and Outdoor
2- Research your Product
Amazon offers a list of product categories to choose from. As a beginner, I would recommend using Amazon's product viewing experience by visiting amazon.com, pressing the drop-down menu that mentions ‘All’ from the search bar, and you’ll find a variety of niches. Select the one you are confident about, for example, Electronics. View the range of products from the niche you have selected. Bestsellers and popular products will show up on the category home page. You can look for best-selling products from each category over there; select the top 10 products.
You can find something called “Best Seller Rank” in the product information; check it for the top ten products you have selected. It is the ultimate ranking of a product from a particular Niche. If the top 10 products you have selected have BSR under 10,000, it shows that these products have a good demand in the market and are sold almost every day. Best Sellers Rank (BSR) is a number which, according to Amazon, is calculated every hour and is based on the recent purchases or sales made from that product compared to the other products from the same category.
It’s important to note that the Bestseller Rank (BSR) does not mean that your product will hit the markets initially; you have to go a long way for that to happen. You can also view other selecting margins from Best Selling Categories, including hot new releases, most wished from, gift ideas, and movers and shakers. These are the alternative services being provided by Amazon to make your product selection experience easier.
Look for your Competitors carefully while choosing the product
Reviews also make a great difference in how you view a product. So, whenever you select a product for Amazon private label business, it's necessary to look for your competition very carefully. Don't just stick to one category for product selection. If several comparable products at the top have more reviews than the category products you have selected, it would be wise to shift your choice. If the results are approximately the same, then you are good to go with your selection. Therefore, it's important to check your competition before arriving at decisions.
Now that you have come a long way with product selection, You’ll need to find a suitable product that gives you a profit worth your struggles minimum of $10 or more. Selling for less than $10 normally reduces margin as Amazon’s costs are disproportionately high. Suppose something on Amazon has a reasonable price ($20). In that case, it's important to make sure that the services included to produce or outsource that product and Amazon's fees considered, delivery charges, etc., were quite less ($9) than the product selling price at Amazon. There needs to be a decent profit amount, or else what is the point of selling? Hence, people go for Amazon FBA Private Label business to outsource cheap products from websites like Alibaba and sell them on Amazon at higher prices.
As a beginner, I would recommend going for lightweight products because they are easy to ship and have considerably lower charges than bigger products. Amazon gives you a clear guidance about how size and weight affect FBA charges. Check out the guide about Getting started with Fulfillment by Amazon (FBA).
To get information about the best product research tools for Amazon, click here.
3- Make your product Visible
Amazon is a giant platform having 2 million + sellers. Then what can be your chances to be discovered by the potential customers of Amazon? That is a question that you should have to answer very seriously. You are already overburdened about your niche and selection of the products, and now if they do not sell the product, what’s the point? Making your product visible to the customers and focusing on Unique Selling Propositions will certainly take you a very long way. For this, you have to explain to your supplier why your item is better than others.
In addition, always keep an eye on your competitors and check your customers' reviews. These reviews will help you out a big deal in this whole process. Also, check the customer’s feedback given at your competitor’s products and find a way to improve your product. Moreover, you may also think about improvising your items to that level where customers will consider them as those they have never used before.
Tips and Tricks
- What makes your product different from others?
- Why should people consider buying your product?
- Ways of improvisation
These features will give wings to your product and make it visible in the market to consider buying them.
4- Finding a Supplier or Manufacturer
Different websites such as Google and Alibaba connect you with several suppliers or manufacturers ready to be on business terms with you. Suppliers from the United States can be expensive, so it is better to go for websites where many Chinese Suppliers or Manufacturers because they are usually cheap. Alibaba has a professional approach for looking out the suppliers with various search filters on the website. It is mandatory to know the minute details about your manufacturers to work or business to never get fooled or lose the amount to invest. Therefore, it is better to look out for the sellers that are:
- Gold suppliers: These people have to pay some amount to Alibaba to earn this rank on the website. Such manufacturers are usually sincere in working without any fraud that will steal from you without any delivery. It is one of the best options to choose products for the Amazon FBA or FBM private label business.
- Verified/inspected supplier: You have to make certain that an inspector visits your supplier's store or office address to ensure he is real and reputable.
- Trade Insurance: Alibaba offers you trade insurance for your business management purposes. So, if the trade insurance is greater for a brand or supplier you have chosen to outsource your items from, that is usually out of risk. If you paid the amount to the supplier and failed to deliver, then Alibaba will refund you the amount from the insurance money.
Build a Relationship With Your Suppliers
Look out for at least 10-20 suppliers because some of them may not be responsive, allowing you to better judge when choosing one. You can certainly email them as it is considered one of the most professional and decent ways to contact someone. In case you are looking for some great suppliers, they might also have some requirements from you. So:
- Be polite and kind to them.
- Make them trust you with honesty and your ideas of working with them. Also, let them understand that you have done proper research about them before deciding on work.
- Use a professional tone to don't think of you as a fraud or money looting party.
- Always ask for details about the work and keep them updated about the changes going on at your place.
- Never pin down on them as if you are the superior. Maintain a cordial relationship and treat both parties equally.
- If you are in the good books, they would likely want to work with you shortly, which is a golden opportunity for you.
Learn more about choosing the best product manufacturer or supplier on Alibaba.
5- Be Calculative about the Price
All this is a long process from outsourcing to delivery, and you have to make sure about the prices before anything else.
- The item you will be outsourcing from Alibaba or any other website that you find on the website is not fix price. You could always negotiate. Do not think that it is great if an item is already cheap. You can make it cheaper ith a negotiation that will improve your shipping and rest of the prices. In this way, you can also make more profit.
- Ensure that you have found the product's initial price, check many sites, or ask various suppliers to know about it. If you are making customizations, make sure that you do it the first time and do not ask for the changes many times. If the supplier cannot make the changes, you can ask him to do it properly again but be sure and clear on your side for the first time.
- Now comes the terms of packaging cost and shipping charges. It is better to know the accurate rates from your courier or shipping services. Talk to several shipping companies and then choose the one that suits you the best for your requirements.
- Whenever your items reach you, ensure the product's quality and take care of the damage expenses. Thoroughly inspect your product before releasing it to online shopping centers like Amazon.
- Ensure that you already know your product's size and figure out the expenses that Amazon will charge for its services. Amazon labeling, Amazon warehouse fees, Amazon commission while bought through their website (15%), Amazon packing, and weight handling costs.
The selling price of your product should be lower than the investment and processing cost. It is the only way to profit; otherwise, all this work and effort will take you nowhere, and you have to plan from scratch. So, calculating your profit margin before even choosing your product could be very efficient and effective in starting your business.
6- Comparing Quality
Never forget to ask for the samples from your suppliers before you make a deal with them. The quality of the sample should match the quality of the product after it has been delivered to you. Ensure that you already have information about the item (while selecting a niche you have an idea about) and use your expertise to check the quality. Usually, sample materials do not cost you much, but if you are outsourcing, then it may be a little bit expensive.
However, this sample makes sure of the overall quality of the product. Be certain about comparing the samples from different merchants and then decide on your product. I recommend sending a purchase order to the manufacturer and include the following points:
- Supplier guarantees that the quality of the product will be the same as the sample.
- He may agree that the shipment will occur before the deadline.
- Suppliers should also agree to replace any or all damaged, broken, or low-quality products.
7- Confirming your order
You have verified all the above-given steps before giving the order for the final supply of the items. Ensure that you run a trial by Minimum order quantity for Amazon FBA or FBM private label business. You may also have a 30 day trial for your item to release in the market to see its performance and demand. If the trial goes well, you can order more and start selling it on the full spree.
During this trial, you may also analyze the quality of the products with the samples and genuinely point out the final changes to get the full picture of how your product will look. Once you start receiving responses from the audience about your item, you are all set to order full length. But make sure you already have a word with your seller about this and convince him that you will be taking the items from him if he successfully delivers quality products.
8- Packaging and Branding Designing
Your brand will represent your product, and the designs and efforts you put in the logos, packaging, and branding of your company make you more visible and wanted. Would you like to pick up some items with poor quality pictures, clumsy packaging, and a logo that does not concern the type of product you sell? Not! Right. That will take your efforts low with your brand too. Therefore, it is always important to ensure that you are presentable with your items as it attracts many customers. You may also refer to websites like Fiverr that are very reasonable for such freelancing works, designs99 is cheap, and Upwork is also very affordable for designing works.
Designing your product’s details page on Amazon FBA is very important for the selling of your items. As first impressions are very crucial on Amazon, and because of this, you may take time to find out and hire a professional photographer. Amazon asks about the image resolution that must be 1000 pixels in length at the longest side. However, 3000-pixel images 300dpi are usually uploaded to give the customer as many details as possible. Moreover, bring out most of the important features and benefits of the products on your packaging and branding labels and highlight them as much as you can.
9- Product Listing on Amazon
Just like Google, Amazon also has its search engine. You have to make sure that your keywords used in headlines and descriptions of the item appear in the search engine as soon as someone types it down. So, make sure that you do proper research on Search Engine Optimization and find the most suitable keywords for your product.
Amazon product listing works on four major things:
- Headlines for your product: You can use Long Tail Keywords for your headlines for them to appear on the Amazon search engine.
- Images for your product: Visitors click your product with your images. Make sure to use professional images and high quality ones as your thumbnails. That attracts customers.
- Important Features: Highlight your product’s five most important features everywhere you can, like on Flyers, Posters, Packaging. Use keywords to highlight these points and make sure people read them as soon as they click on your product. It creates more visibility for your product.
- Description: Make headings short and crisp. People don't like to read long paragraphs in descriptions. If you can accommodate it within 4-5 sentences, you are good to go. Do not forget to use long-tail keywords in your description as well.
Unique Product Code (UPC)
All products require a UPC ( Unique product code) or EAN barcode. You may apply for Amazon's Brand Registry, and then they will provide you with a unique identifier. If you are selling with Amazon FBA, Amazon has access to the process and delivers your product to the customer. They have their private bar code, which is FNSKU. It is created when you create your product listings at Amazon. Never use a UPC and FNSKU barcode on the same product because Amazon does not accept or reject your product. You may send this product label to the brand that is designing your packaging. Get them to combine the unique barcode onto your packaging. Otherwise, you will have to use Amazon itself to label all your products for free.
Two types of FNSKU barcodes:
- A ’Full’ FNSKU Barcode – Use this when the name of your product is not properly displayed on your packaging.
- A ‘Shorter’ FNSKU Barcode – Use this when your product name is visible on your packaging.
10- Freight account AIR or SEA
Your product is now all set to stretch out the customers. So, now you have to figure out a way to send it to the Amazon marketplace. One of the most recommended ways is to have a supplier that helps you set up a freight delivery. Several freight organizations are available nowadays that will be delivering your products directly to the warehouse. You may also get it delivered to the nearby port and set up a freight organization to directly take the product to the Amazon center. Here are a few points to remember:
- The ‘Consignee’ is you and your official address, not the residence one.
- The ‘In Care of’ is the Amazon FBA center if you are selling through it.
- The ‘Notify’ is the freight service organization.
Your shipping mark is such information that will go into your packages. It would be best to inform your dealer about your brand and product name and the Amazon FNSKU or UPC. SEA freight is much more cost-effective than the AIR, but you can certainly use AIR if you want fast deliveries. The charges for SEA and AIR can be different for bigger products that are expensive to deliver.
Keep Import Documents
If your order is less than 200 dollars, then there is no hassle of going to customers, etc., because they will deliver your product to the Amazon warehouse hassle-free. Whenever you are importing your products, make sure about the important documents. It can also be taken care of by the Freight Agencies as they have several custom brokers contacts to assist you in filling your necessary documents in exchange for payment. This part of the process is very important as various products have different fee structures, so your dealer may know how to make it more cost-effective.
For importing your products in the United States, you will need a number. In case you are a citizen of the US, then this could be your EIN and SSN. But if you live outside the US, your customs broker will apply for a number for you, or they will use their very own (private) number. Once everything has been sorted out, you have to send an inspection team, or you can also do it from the warehouse as you cannot send the damaged products to Amazon to double-check. Now, as everything is at its place, you can certainly send your products to Amazon to list them on their website and deliver them to the people once they purchase.
11- Email Marketing
It is an important factor in selling your items to keep your customers engaged and receive regular feedback about your product. So, you have to create a series of emails to keep in touch with customers and help them track. You have to create a minimum of 3 informative emails.
- One, when the product leaves the warehouse after the purchase is being made.
- Second email after the seven days of shipping and confirm from your customers whether they received the product or not. If not, contact the 24/7 Amazon support and make sure everything is fine.
- The third one is after 16 days to receive feedback from the customers on How they are enjoying the product and whether they would like to listen to you soon or use your services. Always ask your customers to rate the product and leave comments since that ranks your product up, and you can do better in the competition.
12- Amazon advertisement and external traffic
The algorithm of Amazon works on various notes. The number of sales or faster the sales you make your product more visible is in the search. One of the most recommended ways is to use Amazon Pay Per Click. It's a paid advertisement if you want the result to be fast. As organically, it isn't easy to reach the top pages within a few months. So, you have to invest a huge amount in advertisements. You may also use keywords in your ads to measure the rank and how that will do in the web ranking.
Moreover, you can also bring external traffic to Amazon using your product links on your blogs, Youtube descriptions, etc., if you are a content creator. If you want to share your 10% profit made with Affiliate marketers, they can do this for you by their digital platforms and websites. It may also get you some audience quickly as influencers already have many followers on their blogs and vlogs because of platforms like WordPress and Youtube. In addition, Search Engine Optimization is also very successful for organic reach. If you are ready for both paid and organic support, you can surely go for advertisements.
13- Feedbacks and Reviews
Last but not least, give top-rank customer support. It may allow you to connect with potential customers and encourage positive feedback. In this way, they will come back to you and use your services soon. Also, be interactive in the comments sections and always thank them for providing their precious time for the feedback. Moreover, be quick to reply to their reviews or any other query about the product. No other better way is available to check your products than getting reviews and feedback from the customers. Also, find out what they like the most about your product and what they do not. It may further help you in improvising your product.
If you receive negative feedback, reach out to your customer by the Amazon system and ask him how you can help. Some people may like your product but do not give you good ratings. In that case, you can reach out to them as the customer has 60 days to change his review. If they do not, you have to deal with it. So, ensure that you convince your customers to do so. After that, if the negative review still stays, leave your professional and helpful response to the negative review as the seller.
If you are ambitious and confident about your products and want to scale up your Amazon FBA or FBM private label business, you have to take care of these things. These things will help you build your brand, and once you're able to create a positive experience, your sales will go high no matter what, and you will certainly be successful.
I hope you will be clear about starting Amazon private label as this guide is solely focused on Amazon private label for FBA business. Before starting, keep the tips mentioned earlier in mind to get started with your online business.
If you are looking for an Amazon private label for beginners course to get started with your online business, you can opt for an Amazon FBA course. This course contains useful information to help you get started, even if you don’t know anything about selling on Amazon.
“Don’t worry about failure; you only have to be right once.” –Drew Houston, Dropbox Co-Founder and CEO.