Learn From My Research & Experience On How To Sell On Amazon
What Product Will This Bag Contain?
Answer: It Will Contain My First Private Label Product – Exciting!!
This bag is so exciting to me! It will contain my first private label product (exposed further down).
If you have not heard about private labeling before, it is basically about creating your own product to sell on Amazon or in your own store.
This is a very popular eCommerce method or business model among the Amazon sellers. In this article, I will walk you through the steps you need to know when private labeling your own product.
It is not as complicated as it may seem. There are a few hurdles to overcome when starting out, but you can soon streamline the process. You will know the process of private labeling your own product and source it from overseas. Hopefully, you have also created some good connections to continue working with.
Where Do I Start When Private Labeling
You look for a manufacturer that can produce your product for a good price and that allows you to add your company logo and possible also make some customizations to the product.
I mentioned this process in my previous blog post:
How Did I Hear About Private Labeling?
I got introduced to a webinar on Facebook held by two very successful guys who are private labeling their own products to sell on Amazon. They now have 7 figure businesses both of them, so they say at least.
I only remember one of the guys name; Justin. He started out like so many other people – super bored with his job and not sure if his employer would outsource his position in the near future. He started looking around and came across private labeling.
His quote: “Being an every-day Joe longing for something else” and his enormous success on Amazon, hit me like a bolt of lightening. I instantly felt I had to try this myself.
“If He Can Do It, So Can I!”
This statement was my first motivation which I still carry hold true. You have to have a mindset of an entrepreneur to follow through with a business effort like this. The hurdles are many until you cross the line where things start snow-balling by themselves.
Back to the webinar, where I got private labeling presented to me… Justin and his colleague introduced the basics steps when private labeling a product and also how to chose the right and most profitable products to sell.
How Far Have I Come?
Soon, I am also about to make a direct consistent income as an Amazon FBA seller. Super exciting!
As of today, I have passed the first steps of taking lots of online courses on how to private label and sell on Amazon’s FBA – Fulfillment by Amazon Program. I will probably write a future article/blog post explaining the FBA program a bit closer, but for now, you can read about it here.
I have also done extensive research to come up with a product I think will sell good and has a good net profit.
Update May 2018
It has been about a year since I wrote this article and I have gained a lot of valuable information about private labeling, but also dropshipping and online retail. The product we manufactured and sold on Amazon was a really good product, but the competition was a bit too high. This is the product with the Holiday campaign I created.
We did the mistake of not researching the sales history of the product and for how long it had been a best seller. It took us 7 months to sell only 500 items.
Private labeling your own product was a fun learning experience, but I do not think I would do it again. I do not mean to drag your hopes down now – some people are very successful using this business model – but it just was not for me and there are other eCommerce business models I have tried after and prefer.
You can read more about these eCommerce models in my newer articles:
You Shall Only Pay Attention To Products That Will Result In
A Net Profit 0f 30% And Up
The Amazon FBA charges will be approximately 30%, calculated on inventory/storage fees and the referral fee (after my first year as an Amazon FBA seller, I would recommend to calculate on 40-45% just to be safe. You may get hit with excess inventory charges if you do not sell out in time). Then you have the product cost, shipping and the customs bond. The rest is your profit.
On a good note, with Amazon’s FBA program you can ship directly to the warehouses and they take care of the distribution, storage and delivery to the customer. They even take care of possible returns and customer service which is amazing!
The only thing you have to do is acting as the middle hand, finding a product and negotiate with suppliers for the production cost and shipping. Last step is to create the product listing and then you can sit back when Amazon is handling the selling process for you.
You Are Leveraging Amazon’s
Existing Buyer Traffic
I found an interesting product to start out with. The product fits in on the directives you should follow to become a successful Amazon FBA seller.
This Will Be Me When Our Products Reach Amazon’s Warehouse And Go Live On Amazon For Customers
We ordered a sample of the product to do our own quality check and it turned out good.
Always Order A Sample So You Can See And Feel The Product
You do not want to risk selling a low quality product and get bad customer reviews. It can be difficult to bounce back after.
At this point in time, we have finished negotiating with our Chinese supplier and we got a reasonable price on air shipping. I have created a logo and provided the FNSKU codes.
The process of understanding UPC and FNSKUs’ was a bit tricky and took a while, but I highly recommend watching tutorials on YouTube. They helped me tremendously.
If you cannot create the logo yourself, there are low price designers on Fiverr.com that can do it for you. I am a graphic designer as well if you need my help.
We have created our first listing of the product on Amazon and prepared the shipping into the FBA program, so they know what products to expect before they arrive. It is a bit tricky to understand this process at first. It feels a bit backwards to me… so take your time studying tutorials.
You can also get support from the Amazon Giant itself, but often they send you links to read more and you get even more confused. Their descriptions are rather contradictory and very difficult to understand.
We called their support and demanded for them to personally guide us through our concerns, and we had to do so SEVERAL times, because the expertise of the customers sales reps varies a LOT.
As of now, we are waiting on the final step before placing the order – to see how the product will look like with packaging and logo.
Hopefully, How We Will Look Watching The Sales Numbers On Amazon
After approval, we can go ahead with the purchase of our first 500 units and wait for it to reach the Amazon warehouse and then go live. Or in fact, 3 different warehouses. This is something to take into consideration in regards to the shipping costs.
When preparing a shipment in Amazon’s seller central, Amazon often splits up the shipment to different locations. They started this to shorten the delivery time to customers, but it makes it worse for sellers since it gets more expensive shipping to several locations.
Although, there are so many more benefits than disadvantages with selling on Amazon, so do not get discouraged by this.
In fact, they have a program called: The Inventory Placement Program, where you can ship your inventory to one warehouse in exchange for a $0.30 fee for each unit (small standard size). If you have an over-sized product the cost is $1.39 per item.
11 Things To Consider When Choosing A Product To Sell On Amazon
There are some things to consider if you want to guarantee that your product will sell on Amazon. These 11 steps are crucial to consider before private labeling your own product. The information is collected from the webinar about private labeling, further research online and video tutorials:
#1. Identify A Product That Is Already Selling Well on Amazon
To identify a product already selling well on Amazon is easy. You can do this by Googling: “Top 100 Best Sellers On Amazon + Your Category You Have Interest In”. Choose a product that is already a best seller with a low sales rank. More info about this further down.
#2. Choose A Product Not Sensitive To A Brand
To give you an example of a product not to choose, I would say a digital camera. It will be very difficult to compete with an already established brand. There are already MANY established brands selling cameras on Amazon. What the guys from the webinar recommended (plus other sources online) is to choose something in the pet supplies category. For example: pet odor removal.
#3. Choose A Product In the Price Range Of $15 – $50
The reason to this is that Amazon customers make purchases in this price range rather easily and without too much consideration. It does not feel too expensive and people tend to do impulse buying decisions for products in this price range. Most people will not need any further research to make the buying decision since the price is low enough to risk losing out on the small amount of money if the product is not what they expected.
#4. Try To Find A Simple Item That Does Not Break Easily
This is very important, since you want to sell a product that first of all is simple and that you do not have to worry about arriving to the customer broken in pieces. The best way to ensure finding a product that does not break easily, is to stay away from more than one-part products, porcelain, glass, and electronic devices.
#5. Search For A Supplier/Manufacturer That Can Produce The Product For
A Low Cost
To find a low cost suppliers, many tend to look overseas, for example in China. There is a good website that I used to look for Chinese manufacturers called alibaba.com. I recommend to check in the box “Gold supplier” to not risk receiving low quality products or being scammed.
#6. Chose A Product Preferably Not Heavier Than 1LBS
The weight is important because it plays a big role in the shipping cost from your supplier to the Amazon warehouse. The lighter the product is, the cheaper the shipping cost will be, which in turn means higher profit margins. If you keep to products not heavier than 1lbs you can choose to ship by air which is much faster and will save you the agony of running out of stock 30 days before the next shipping. You will be able to sell your products faster on Amazon and in that way save (or make) more money. The weight also plays an important part in the Amazon’s FBA storage/inventory fees. Amazon charges around $2 for up to 2lbs and every pound after this it is an extra $0.39.
#7. Choose A Product That Have Competitors With Less Than 50 Reviews
The amount of reviews is one of the best ways sellers have to gauge the level of competition for a product. Reviews are one of the main aspects on how Amazon ranks products. If your competitors who are selling the same product have less than 50 reviews, you can easily beat their review count. Some Amazon sellers say even a review count of 200 is beatable. I believe it is best to stop there. It will be very difficult to beat the big players, with thousands of reviews and get customers to buy your product instead.
#8. List Your Product On Amazon
When listing your product on Amazon you have to make sure you are better than your competitors. In order to be so, you have to have high quality images and preferable even user pictures. Put some extra effort in making the description self-explanatory. It should focus on trying to solve a problem for the potential customer. Why should customers buy this product from you?
Yes, There Are Tons Of Competition On Amazon But 99 Percent Are Doing It Wrong!
With this statement I mean having none or maybe only one picture of the product. Also poor descriptions and no optimization. Customers want to see and read about what they are purchasing. Make sure to do it the right way. Make your listing stand out.
#9. Optimize Your Listing With Keywords
To be able to rank in the organic ranking on Amazon, you have to optimize your listing. Make sure to use your keywords in the main title and description. You also have a special page on your Amazon seller account where you can add keywords.
#10. Take Advantage Of Amazon’s Pay Per Click Advertising
If you want to start selling fast, be prepared to invest some money into Amazon advertising. With their PPC – Pay Per Click option, you can pay to be visible on the 1st page to the right side of their product listing page. You only pay when someone clicks on your listing and most often this leads to a sale. A quick ROI.
#11. Similar Products Have A 5,000 Best Seller Rank Or Smaller In The Main Category
The lower sales ranking (BSR) on Amazon, the better! The best seller rank also gives a good measure of whether there is enough demand for a product or not. Your product should have a BSR of 5,000 or lower to ensure there will be enough buyers in the market for you to make a good profit.
Below are numbers explaining the sales ranking a bit better and how many sales you can expect from a particular sales rank. This example is for books only:
- Amazon Best Seller Rank 50,000 to 100,000 – selling close to 1 book a day.
- Amazon Best Seller Rank 10,000 to 50,000 – selling 5 to 15 books a day.
- Amazon Best Seller Rank 5,500 to 10,000 – selling 15 to 25 books a day.
- Amazon Best Seller Rank 3,000 to 5,500 – selling 25 to 70 books a day.
- Amazon Best Seller Rank 1,500 to 3,000 – selling 70 to 100 books a day.
- Amazon Best Seller Rank 750 to 1,500 – selling 100 to 120 books a day.
- Amazon Best Seller Rank 500 to 750 – selling 120 to 175 books a day.
- Amazon Best Seller Rank 350 to 500 – selling 175 to 250 books a day.
- Amazon Best Seller Rank 200 to 350 – selling 250 to 500 books a day.
- Amazon Best Seller Rank 35 to 200 –selling 500 to 2,000 books a day.
- Amazon Best Seller Rank 20 to 35 – selling 2,000 to 3,000 books a day.
- Amazon Best Seller Rank of 5 to 20 – selling 3,000 to 4,000 books a day.
- Amazon Best Seller Rank of 1 to 5 – selling 4,000+ books a day.
These numbers are taken from another blogger; Make Use Of. Check them out!
Very exciting numbers indeed!
Imagine If You Can Find A Product With For Example 200 – 350 In Sales Rank And You Can Sell Up To 500 Books A Day. Not Bad!
Of course, there are other aspects deciding how good your items will sell as well.
You first of all have to follow the Amazon’s terms and regulations, and like I mentioned earlier, you also need a good amount of reviews.
I am super excited to see where my journey takes me!! I have a really good feeling about this.
My baby Max is on my side voting for mommy too^^
Good Advice When Private Labeling Products To Sell On Amazon
Try to find a product that is not seasonal and that people will buy all year around. Also, if the product encourages recurring purchases, you have set yourself up with a gold mine.
Watch Out For Weight Loss Supplements!
These come with too many regulations and safety risks. You can risk ending up in some legal hot-waters, so it would be wise to avoid this product category.
Furthermore, start with one product only and focus on building a brand. When your first product is selling well, you can start looking for more products to private label. It is not recommended to sell more than five products to be able to maintain the account and not get overwhelmed.
Take Your Business One Step Further
If you want to take your Amazon business one step further, you should also create a website for your new brand.
If you can show Amazon that you have a branded website, you can register your products in Amazon’s brand registry and not have to bother about UPC codes etc
The website on the picture is a WordPress site I built for my other blog: Stay Forever Young – Your Anti Aging Skin Care Pro.
Conclusion How To Private Label
And Sell On Amazon
Like everything else I present on my website, this is not a get-rich-quick solution. Any business start-up takes time to get momentum. There is a lot to think about and process before ordering your first product.
Our biggest hurdle so far has been trying to reduce the shipping cost and to figure out whether we need to apply for customs bond, if we need to hire a shipping and customs agent, how much the duty will cost us and so forth.
We ended up choosing air-shipping since our products are lightweight. Luckily, there is no customs when air-shipping and we got a reasonable price.
I hope this article helped answering some of the questions you may have or spiked your interest in private labeling your own product to sell on Amazon. If you have any questions I still have not yet touched, please feel free to ask them in the comment section below and I will research the subject for you.
I am here to help out as good as I can.
Cheers and best wishes to you all!
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Update On My Journey Private Labeling A Product To Sell On Amazon
I promised to keep you posted on my private labeling journey, so here comes a summary of what has been going on during the last 2 weeks.
It is now already April 5, 2017, and we have been going through some frustrations. First of all, the twelve hour time difference makes it really hard to get enough accomplished for each day.
My partner, James, who is a morning person has taken the night shift (Chinese time) and I have the morning shift trying to process things with our supplier.
However, even that I am an evening person I cannot be up ALL night, so often I get to communicate with our contact person in China from 10PM to 1AM. Not enough time, when trying to schedule everything.
Our first frustration occurred, while I was going to pay the deposit for them to start manufacturing our product with full packaging, logo and label. They wanted a deposit of about 30% of the total order to do this.
I had no idea it was such complicated to wire money to China, as it turned out to be. It took us two days of texting and emailing back and forth trying to figure out the fact that the Chinese Swift codes look different from other countries. I honestly thought my supplier did not have “all horses in the stable”, when he continued to send me too short Swift codes with only letters and XXX’s – even that I told him it had to be 2 letters and then 8-12 digits.
After Googling common Swift codes in China, I saw that they were different and were similar to the codes he kept sending me. It made me feel a bit remorseful and I had to apologize for not understanding they were different.
The Language Barrier Complicates Things
At times, our Chinese contact does not understand what we mean which prolongs the end result, having to repeat the same thing over and over. He is limited in his understanding of English, as well as speaking the language. He is also the ONLY person in the company speaking English at all. Unfortunately, a reality with many suppliers in China.
The Seller Shall Pay The PayPal Service Fee
According to the PayPal regulations, the seller should always pay the service fee. However, our supplier added the 5% PayPal fee to our invoice, instead of taking the cost as they should. It may seem like 5% is nothing, but when having tight margins, every extra penny is decreasing your net profit.
We tried to get our supplier to do the right thing and pay for the service fee, but they were arguing that they would go with minus if they did.
I even sent them the legal regulations from PayPal, but got back that all suppliers are charging their customers this fee. The only difference was that they include it in the product cost from the beginning, so the customers were unaware they were paying the PayPal fee.
UPC & FNSKU Codes – What To Use
The different codes and labels are a bit confusing in the beginning, but here is what we have learned:
- The UPC code is needed when creating the product listing on Amazon. If your product does not have an UPC code already, you can purchase a code for a low cost. I purchased 250 UPC codes on eBay for only $5. Not a big expense at all.
- The FNSKU code has to be placed on the packaging of the product when selling on Amazon. This code is related to you as seller, so they know who to pay out the sales profits to. You will get access to the FNSKU codes after creating your listing in Amazon’s seller central.
- Inside the seller central, you will get access to the shipping labels you will need to provide to your supplier. These, will display the correct Amazon warehouse addresses. Amazon can decide to split up your order in several deliveries, which can cost you a great deal more when it comes to shipping. You can avoid this by joining the Amazon Placement Program and pay $0.30 per standard sized item and $1.35 per over sized item. In some cases this may be worth it.
- For now, we decided to not use the Amazon Placement Program. We had to go a couple of rounds with the product description before the process was settled. At first, our supplier told us the description and user guide were too long for adding it to the back of the poly bag and asked us to create a description we could add on a hard copy inside of the packaging.
Always Create More Sales Funnels
Than Just Amazon
What do I mean with this? When branding your products and working on getting more sales, it is always good to find more sales funnels than just Amazon.
I guess my long experience as a marketing specialist, makes this way of thinking natural to me. While waiting for our product to get ready, I have created a Facebook store where people will be able to buy our product as well. I will update with the links when our product is finished.
Status Of Our Private Labeling Efforts
We are now waiting and waiting! It has been over a week and it is so nerve-racking because I am nervous about the final result. How will the packaging look with our logo, label and description?
I Cannot Wait To Start Selling On Amazon
I am telling you, patience is not my virtue! I want to get going NOW.
Luckily, my partner is there to calm me down. He is good at reminding me it is better to make sure everything is okay and not make unnecessary mistakes that need to be corrected later. He is absolutely right.
So…this is where we are today and make sure to come back for my next update. If you have any questions or if you want me to research something for you, let me know in the comment section below.
Founder – The Future Is Your Creation
Email: [email protected]
About The Author
Stina Pettersson is originally from Sweden, but have resided in the U.S. for the past 6 years. She started her American journey in Miami, Florida, and recently moved to Austin, Texas.
Stina was active as a professional dancer for 21 years, but after ACL surgery in both knees, she was forced to slow down her dancing. She is now back to her roots, with her beloved horses, and also enjoys every day out in nature with her two adorable dogs, Max and Abigail.
Stina has the gift of being able to receive communication from the spirit and extraterrestrial world, which she also loves sharing with her readers.
“My main goal is to always maintain a flexible lifestyle, where I set my own schedule. Even that I work hard, I love what I do every day and have the opportunity to help other people, which is a huge gift.”
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