It would seem that the Private Label sales scheme is very simple: buy it cheaper, stick a logo on it, and sell it on Amazon with a 2-3-5 times markup. But, unfortunately, it doesn’t work that way. Because each stage is fraught with many difficulties.
Read this article to the end: it will save you from making mistakes and answer the most popular questions related to starting a business.
A step-by-step plan for getting on Amazon Private Label
1. Search for a competitive and popular product. We have already written more about choosing a niche on Amazon in our previous publication.
In short: you don’t have to look for a unique product, just focus on quality and low cost. Choose the categories you know about, because the niche should be close and interesting to you. Be sure to analyse demand and competitors, read reviews of the top products to avoid other people’s mistakes.
2. Ordering samples and testing them. Don’t buy large quantities right away, and don’t ignore the importance of quality control – it’s one of the decisive factors for your future success. Only after you have checked the samples and compiled a list of improvements should you sign a contract with a supplier.
3. Registration on Amazon and production of the first batches of goods. These are crucial stages that can be organised in parallel. It is at this point that beginners make global mistakes, which we will discuss below.
4. Receiving the goods from the supplier and branding them. The Private Label model assumes that your product will be recognisable, so at this stage, work on the visual component:
- corporate colours and fonts;
- packaging design;
- Making gifts to order (if your concept provides for it), etc.
5. Delivery of goods to Amazon warehouses if you work under the FBA scheme or to your own or rented warehouse (FBM model).
6. Launching sales: filling out product cards, setting up tools, marketing.
7. Scaling and development: replenishing the assortment, searching for new suppliers, analysing trade and financial indicators. If you are not ready to be constantly immersed in the processes, it is better to outsource such operational management.
What problems can arise when registering a Private Label?
Amazon has a fairly transparent Selling Policies. However, the rules are constantly being changed and supplemented, so it is extremely important to keep your finger on the pulse and pay attention to the nuances. It is easy to get automatically blocked for violating even a minor point, in your opinion.
After automatic blocking, it is very difficult to restore the trust of the administration and customers. And in 99% of cases, it is more expensive than the services of specialised companies for the correct initial registration and verification of an account.
Registration itself takes place in 3 stages:
1. Prepare a package of documents (bank card, identification documents, tax information, etc.)
2. Register an account.
3. Data verification.
The vast majority of problems arise due to special requirements for submitting documents. And most often, it takes a lot of time for newcomers to figure out where, to whom and in what form to send data.
Frequently asked questions about starting an Amazon Private Label business
How long will it take from the start to the first profit?
On average, it takes 3-4 months to complete all the stages, but we can help you start much faster by taking some of the organisational issues under our control.
Do I need to register a legal entity in the United States if I work under the Private Label model?
No. However, you may need to register if you want to sell goods from closed categories or enter other American marketplaces: eBay, Etsy, etc.
How many units of goods do you need to buy to start?
The first batch should be small, we recommend 300 to 1000 items. This will allow you to test demand more deeply and correct possible product defects for future bulk purchases.
How much investment is required to start selling as a Private Label on Amazon?
There is no clear answer. It depends on your capabilities and ambitions. Of course, the more you are willing to invest, the more tangible and faster you will get results. It is also important to understand whether you want to start on your own or decide to trust specialists who will help you with financial, accounting, and analytical tasks and minimise your risks.
We can help you at every stage of the business launch. With a guarantee of successful account verification and access to the platform. We will provide you with the necessary assistance on a specific issue or take over the management of your business on a turnkey basis.
Please contact us via the form to discuss the terms of cooperation.