So you’re excited about starting your shiny new private business label selling products on Amazon. You have everything in place to make a great start. You have your business plan, your strategy, your niche or range of great niches that you have spent time researching. You’re really excited about making your mark and selling products that you will choose and that carry your brand. It’s great to feel that you are getting ahead and making progress with your own business and that you are finally in a position as an entrepreneur to make your own decisions that will grow your business to its full potential.
The question now is how you’re going to make sure that you get off to an amazing start? In this article we’ll be discussing just that and helping you to make the first tentative steps to a very profitable private label business on Amazon.
- Realise This Will Take Capital
There are very few businesses that you can start without any capital at all. As well as planning and research, selling Private Label Products on Amazon necessitates having some investment capital to start off with. The Online Empire Academy points out that selling private label products is different to finding products to resell.
You could choose not to buy in bulk but you would be potentially sacrificing a significant discount that your supplier might be able to offer you. Your supplier, no matter how good your business relationship with them, will not be in a position to offer you better terms or other helpful services.
Perhaps you have enough capital to buy in bulk. If not, another option will be for you to work with a reputable sourcing agent who has more bargaining power with suppliers. Ideally they will have a good history, from their work with other clients, of buying in significant volume and they will have a strong supplier network.
You need to weigh up the cost of working with a good sourcing agent against your ability to deal directly with the suppliers and get a good deal. Here is a new option to help get a further discount from the manufacturers
- Finding A Reliable Supplier
The key to any successful private label business venture will be the amount and quality of the research that you do. In fact, this applies to any business. They all require an appropriate level of research and for you to take heed of the information you glean from it.
Research and find yourself the best supplier you can for the products you want to sell. One of the first options you’ll have to consider will be whether to source your product from overseas or domestic. Sourcing from overseas will normally result in lower costs but there may be language barriers that you will have to overcome in order to make yourself understood and make sure you are getting what you are paying for.
If you are new to the game, a good way to get the best of both worlds is to link up with a sourcing agent. The agent will take the strain away from you. This means you will be able to take advantage of the low prices that overseas suppliers can offer. Meanwhile the admin will be carried out between yourself and an agent who is relatively local to you and speaks your language. Just be aware that a sourcing agent will not work for free. They charge a fee or a percentage of the deal you eventually make with the supplier.
- How To Scout The Right Products
Here is a great checklist for the process you will need to go through in order to successfully select products for your business. Here are a few key ones:
- Ideally the products you source should have to have a maximum sale price of $50 – preferably less.
- Make sure the products are lightweight and do not exceed 3 pounds in weight.
- Do not choose any products that fall within a category that is already dominated by a recognised brand name
- Extensions of Other Products
The best products to sell on your private label will be those that can be easily sold as extensions of other products. You should look for products that can easily ride the coattails of other already successful products. A product might be strong enough to find its own market, but you will be assured of what you are selling if it can tie into something that is already popular and sells well. For example, if a particular range of mugs is selling well you may consider selling branded coasters to match.
- Research Your Competition
Your competition has the power to have a dramatic effect on your business. Selling on Amazon means you need to compete with everyone else and this is something you need to take seriously. Part of that will mean you have to thoroughly research the other sellers you are going up against.
Researching your competition will mean you have a better understanding of what is required for your business to succeed.
- How are they getting brand awareness?
- How are they differentiating themselves from one another?
- How are the products that they sell different to those that you want to sell?
Keep those questions in mind and always try to find products to sell that have a unique selling point to set your offering apart from those of your competitors.
- Look at their current stock list and monitor their prices and any fluctuations.
- Be sure also to check the comments from their customers. Their prices may be competitive but how is their customer service?
- Use a keyword search to analyse your competition
- There is a range of tracking software that you can use to keep an eye on the popularity of a particular product or niche
- Use Amazon Tools
With Amazon you can take up the option of their Amazon Pro Seller account which helps you by fulfilling your orders for you. All you have to do is pay the relatively small subscription fee of $40 a month. Otherwise with the basic Individual Seller Account you will end up paying $0.99 on each item you sell. If you’re looking to sell more If you plan to sell more than forty items each month, it will be a smart use of your money to use the Amazon Pro Seller Account. Don’t make the mistake of relying on your supplier or doing the fulfillment yourself. Your customers are paying for Amazon Prime to get their products within a couple of days from Amazon. It will be a huge turn-off to customers if they’re not able to take advantage of their Amazon Prime benefits because you haven’t chosen to subscribe to an Amazon Pro Seller Account.
Sarah Kaiser is a digital marketing manager at casino global sourcing, the sourcing division of a French retailer Groupe Casino. She’s in charge of godirek.com, the digital product catalog of casino global sourcing, which offers helps and handles enquiries about private label manufacturing and sourcing. She’s a fan of water sports and has studied business management in France. Her works have been published on dozens of websites and blogs.