Amazon FBA Private Label: Learn How to Make It Big In 7 Steps

Author: Josh VanAkker, Copywriter at Helium 10

Published: March 26, 2024
Reading Time: 20 minute read

Introduction

So you’ve ascended into the world of e-commerce and stumbled upon various ways to make money online.

You’re wide-eyed excited!

There’s dropshipping, where you sell products without ever touching them. Sounds intriguing.

Online arbitrage, the art of buying low and selling high, seems like a savvy financial move albeit a bit of a hustle.

Self-publishing has been on your radar. Kindle Direct Publishing offers a low barrier to entry and a creative outlet for the part of yourself that aspires to be an author.

But then there’s private labeling, a method of selling online where the product is truly yours. It may be a less-known avenue, but it’s certainly a highly lucrative one. Is it the right one for you?

In this blog, let’s talk about everything you need to know about how to sell private label products — from what a private label product is to how to build an Amazon FBA private label brand and why it might just be the golden ticket you’ve been searching for. It’s time to demystify the intricacies of selling private-label products so you can start selling your own product.

What Are Amazon FBA Private Label Products?

Manufactured by a third-party manufacturer or company and then sold to a different company which then brands, markets, and sells them, private label products can come in many forms. This even includes run-of-the-mill Alibaba or AliExpress products but with a brand name added to the item.

When selling private label, sellers will be able to decide on their very own unique logo, labeling, packaging, and other creative elements that will help set them apart from the competition on Amazon.

While it can take both time and effort to grow your brand into an instantly recognizable one on Amazon or another e-commerce site like Walmart, these specific products—if you stick with them—will ensure that your business continues to thrive for years to come.

Why You Should Sell Amazon Private Label Products

So, since there are so many different ways to make money on Amazon, why should you sell private-label products? Besides being the most common sales model for Amazon sellers, check out five more reasons below why this may be the right approach for you:

1. You Own the Brand

When you sell private label products, it means that those items belong to your company. This is different than selling online or retail arbitrage, where the items you resell have different logos and brands attached to them. Furthermore, your private label products will allow you to effectively market, grow, and price your items according to your preferences.

2. Higher Profit Margins

Another benefit to selling private label on Amazon is that your costs will be low. This is because you’ll be sourcing your products straight from a supplier, thereby cutting out the ‘middle man.’ For sellers who are currently using a different model—such as wholesaling—you’ll always have to buy your products from a brand owner or distributor. This adds more fees to the process and nets you less profits, so consider switching to private label to avoid these unnecessary fees.

3. Customize Your Product

Selling private label means that you can fully customize and design your product any way you want, giving you much more freedom (and potentially more profits) than if you were to resell already created products. To help with the creative process, private labelers should always check out their competitors’ items to see what issues they can resolve that the currently listed products are not meeting.

4. Creative Control Over the Amazon Listing

Private labelers do not just have creative control over the product design phase; they also can create one-of-a-kind listings on Amazon. These sellers are able to edit any images, manage the pricing strategy, create listing copy, and add relevant keywords that will help their new item be seen on the site.

5. No Competing for the Buy Box

Odds are that if you’re reselling branded items, you’ll have to compete for the Buy Box with other sellers who are doing the same thing you are. The Buy Box is so important since the seller who has it for a specific product will see potentially remarkable profits. With private labeling, though, you can guarantee that you’ll be the only seller on the list, meaning that the Buy Box will automatically apply to you, granting your new product increased sales without the hard work of competing with others.

Benefits of Selling Amazon Private Label Products

Are you curious if it’s worth it to create your own private label products to sell on Amazon? While success isn’t completely guaranteed, victory can make your business soar. Take a look at the top benefits of selling with private label:

• Customize Your Products: You’ll find that you don’t have any say in what the product looks like when you sell items originally from different brands on Amazon. However, by having your own products, you can customize them to your heart’s content and add new and popular features that will get them noticed by more customers.
• You Get to Build Your Own Brand: By having your own brand and products, you can build a strong and lasting business. It will also help your customers start to associate your branded products with the business, driving more traffic and profit.
• Less Competition: When you create your own product, you’ll be the only one selling it, meaning that the Buy Box will be yours for the taking! If you create a product that everyone loves, you’ll be the only one selling it, ultimately leading to increased traffic and high profits.
• Higher Revenue Potential: Selling private label on Amazon usually provides sellers with increased revenue. When you creatively design a unique product that no one else is offering, you can lower your competition and generate huge sales at the same time.

Cons of Selling Amazon Private Label Products

Even though Amazon private label comes with many benefits, there are also some downsides that every interested seller should be aware of. Take a look at the most common ones:

• An Initial High Investment: The upfront investment required can be large, preventing some sellers from using this method. This huge investment is because suppliers and manufacturers require sellers to purchase products in bulk.
• Not in Charge of Quality Control: Because you’re sourcing products from a third-party supplier, it’s nearly impossible to check the quality of the products you’re selling to your customers. Customers may turn on your product if it’s low quality, resulting in damage to your company.
• More Time and Effort: It’s important to remember that selling private label will not immediately make you wealthy. It will take a large amount of time and effort to find great products, source them, create a brand around them, launch and market them, and continuously manage the inventory.

What Are the Requirements for Amazon Private Labeling?

Amazon doesn’t have specific requirements that are exclusive to private labeling, but there are general requirements and best practices that apply to all sellers on the platform, including those who engage in private labeling:

1. Amazon Seller Account: Create an Amazon seller account.
2. Product Quality and Compliance: Your products must meet Amazon’s product quality and safety standards.
3. Product Listings: Create accurate and detailed product listings.
4. Branding and Packaging: Develop your brand name, logo, and packaging design.
5. Product Reviews and Ratings: Positive reviews and ratings are crucial for building trust with customers.
6. Intellectual Property Rights: Ensure that your products do not infringe on the intellectual property rights of other brands.
7. Product Research: Conduct thorough market research to identify profitable niches.
8. Supplier Management: Work with reliable manufacturers or suppliers.
9. Inventory Management: Keep track of your inventory levels.
10. Fulfillment Method: Decide whether you’ll fulfill orders yourself or use Amazon FBA.
11. Marketing and Promotion: Develop a marketing strategy to promote your products.
12. Legal Considerations: Ensure that you have all necessary business licenses and tax registrations.

How to Sell Private Label Products

1. Do Product Research

Research the right product to sell, focusing on data rather than emotions. Here are some criteria to consider:

• Price: $20-$70
• Sales per Month: 300 or more
• Number of Product Reviews: 500 reviews or less
• Product Star Rating: Maximum of 4 stars.
• Listing Health Score: 5 to 7.

2. Find a Supplier

Find a supplier either directly from a manufacturer or by ordering one-off items on platforms like AliExpress. Always ask for a sample to gauge quality before purchasing in bulk.

3. Choose a Logo for Your Brand

Help your brand stand out by creating a unique logo and packaging. Ensure your branding resonates with customers.

4. Create Your Listing

Optimize your Amazon product listing by focusing on photography, pricing strategy, obtaining a UPC, and writing compelling copy.

5. Choose a Pricing Strategy

Don’t underprice your products. Instead, focus on better product designs and effective marketing strategies.

6. Fulfillment Method

Most sellers prefer Fulfillment by Amazon (FBA) as it reduces risks related to shipping and handling.

7. Launch Product

Implement a product launch strategy that may include:

• Running effective PPC ads
• Advertising on Instagram or Google
• Utilizing influencer marketing
• Conducting giveaways or lightning deals

Examples of Private Label Products

Coofandy’s Mens Blazer - Popular affordable men’s clothing brand.

Flexzilla Garden Hose - Dominating its competitors with effective design.

Modvel Compression Knee Brace - Small business with optimized photographs and copy.

Conclusion

Creating a private label listing on Amazon FBA that attracts customers sets a strong foundation for success. Armed with insights into product selection, branding, marketing, and customer engagement, you’re better equipped to embark on your private labeling adventure.