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Are you looking for a way to sell your original product ideas or some OEM merchandise on Amazon? Then why not try creating your own Amazon private label? One of the best things about selling on Amazon is that you may create your own brand with your own set of merchandise without having to set up an actual company. This practice can empower both sellers and buyers. It’s a total win-win!
If you’re an online seller, you might want to know how. Here are 5 steps to creating your own private brand and promote it on Amazon platform.
What Exactly is a Private Label?
If you’re pretty new to Amazon or online selling as a whole, you’ll probably ask yourself what exactly a private label on Amazon is and why it is the craze these days. Well, Amazon private label is a brand that is owned by a retailer who sells it on Amazon.
Just like regular distribution companies, private label sellers either manufacture their own product, or they get products from another manufacturer. From there, they will rebrand these products under their own brand and sell them. It’s pretty much like creating OEM products, but the only difference is that you’re selling on Amazon.
Now, it’s important to take note that the manufacturer has no actual rights to the product unless the retailer is also the manufacturer of the product. The manufacturer just either gets a share in profits or the manufacturer will directly sell the products to the seller. Now that you know what a private label is, let’s check out why you should consider selling private label on Amazon.
Private Level: Why You Should Sell on Amazon
If you’re not convinced on the impact of private label brands yet, here are a few facts that you should know of. According to researchers from L2, a little over 40 private label business brands were found on Amazon platform with 29 of them carrying apparel products. Also, L2 researchers have found that Amazon highly encourages the emergence of private labels in their community. And this includes not only the big brand names but also the lesser-known names who want to expand their reach. In fact, Amazon is helping them by providing more private label offerings to fill up all the empty space. It also seems that consumers don’t mind because all the small Amazon private brands are getting more transactions, as per L2’s findings.
This may beg the question of why private labels are doing so well on Amazon.
Well, if you take a look at the products being sold on Amazon, you’ll notice that all of them are pretty much the same. Sellers buy the same products and sell them on the platform, hoping to make a quick buck. It’s like being in a generic product marketplace, so to speak. Unlike brand products and reputed sellers that create bonds with their customers, generic brands and generic sellers just don’t cut it. This is why small private label businesses are doing so well on the platform. It’s a brand strategy that can cut through the competition!
5 Steps on Creating Your own Amazon FBA Private Label
Now that you know why private labels are great for business, let’s take a look at the steps on how to make your own private branding.
Step 1: Find a Niche Product
Just like in any business, you have to find a niche. How do you find your niche? Well, you can use these product factors to find the best product for you to sell:
- Retention ability or demand – This will determine how your customers will react to your product and how much of your stock you’ll end up selling. It’s always better to get a product that you know has a high demand.
- Exclusivity of the product – This refers to how many products exist on Amazon. If you’re the exclusive distributor of a certain product, then you can enjoy a monopoly of it.
- Price of the product – The price range will depend on your target market and how much they are willing to spend to buy your product.
- Shelf life – The shelf life refers to how long the products last. The shelf life also determines how you will price your product.
- Size and weight – This affects the shipping since bigger sized and heavier products will be priced higher.
If all of these 5 factors follow your vision, then you’ll be able to sell it on Amazon. Also, you must take into consideration the fact that your product is being sold by others in the platform, too. If it is, take note of these factors:
- Amazon Sales Rank – The higher it is in the rank, the higher the demand. This also means that the product has good listing quality.
- Product Reviews – Generally, you’ll want products that have good reviews. However, you’ll also want a product with not that many reviews. That way, you’re assured that the competition isn’t so much.
Step 2: Look for a Supplier
Unlike most individual retailers on Amazon, you’ll want to get your wares from the actual third-party manufacturer. This will allow you to have lower costs, which will result in a higher profit margin. You can look for various suppliers in US or China. Check out their bulk buying options and see which one suits you the best. It is recommended that you look for the supplier closest to you. If you live in the US, then get a US supplier. If you live somewhere in Asia, China is a better bet.
Step 3: Create your Brand
This is probably the most fun part of the process, since it requires a lot of creativity. Now that you have the product and the supplier, you need to align your strategy with your desired brand image. What message do you want to communicate with your brand?
To make things clearer, let’s take a look at some private brand examples.
One of the rather known Amazon Prime brands is Buttoned Down. Buttoned Down is a brand that sells polos and dress shirts. If you look at the tagline, it says, “Every Man’s Favorite Dress Shirt”. This message tells us that Buttoned Down shirts will easily become a favorite among men. Also, you can see that they really cemented their brand by creating brand colors and also a logo. As for the packaging, they have their own with the brand located in the shirt’s tag; it’s pretty much like any other brand of polo shirts that we see in department stores.
Another private label example is the Amazon brand Mama Bear. The name alone tells us that the brand sells baby products. They sell baby clothes, diapers, and many more. They also have their own logo with a cute design of a mama bear and a baby bear. Also, they make their own packaging, like most real businesses would do.
Step 4: Register Your Brand on Amazon
Just like what you would do for any business, you have to register your brand. Luckily, registering your brand on Amazon is very fast and easy. To do this, go to the Amazon Brand Registry, and register your brand. This will allow you to have exclusive rights to your brand in the Amazon Marketplace. It will also protect you in the event that another seller tries to rip off your brand and sell the same thing under the same name.
Once you register your brand, there are a few things that you need to take into consideration when you list your product:
- You should always write your brand name in all listings.
- You must upload 6 high def pictures with three products containing your logo.
- You must put a sticker of your logo in your product packaging.
- You must include in the description and picture the accessories if you have any.
Step 5: Use the FBA
Now that you have your merchandise ready and your brand up in the marketplace, you now have to think of how to get your products to your customers. This is where shipping comes in. Amazon has a facility known as the Amazon FBA, which handles all your shipping concerns for you. You don’t need to ship the order anymore, as the facility will pretty much do everything for you.
Take note though that this is only for products that you host on Amazon. If you sell your products in other channels such as a website or maybe in Shopify, Amazon won’t have anything to do with that anymore. In order to use the facility, all you have to do is register for it. Make sure you read all of the terms and conditions as well as the privacy policy before you sign up so that you know what to take note of while using it. Once you have already signed up for the facility, you just have to pay the FBA fees, and you’re on your way to creating your own full-fledged store that’s up and ready for business.
Conclusion
We can see that private labels on Amazon are becoming the next trend with regard to the platform. In 2017, Amazon saw an increase in the number of private label brands in their platform. That said, Amazon was able to make $210 million from AmazonBasics alone. This in itself proved the power of private labels in the platform. In fact, Suntrust Robinson Humphrey predicts that the total sales of Amazon’s private labels will reach maybe even more than $20 billion come 2022.
Whether you believe in the power of Amazon private labels or not, we can’t ignore the figures that are right in front of us. As of 2018, private labels already play a vital role in the growth of Amazon. They may even revolutionize the way Amazon works as a whole. If you are an online seller, then you’ll know that there’s a fortune to be made with private labels.
If you’re new to the game, now is the best time to start because Amazon private labels are just getting started. As mentioned above, private label sales are expected to reach $20 billion in just 4 years. So you’ll know that there is huge potential. This is why now is the best time to jump on the trend, as private labels are starting to pick up. Take a look at more private label products examples, and you’ll see.
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