A Guide to Selling Private Label Products

If you're new to online selling or just heard the term private label products, you probably have a thousand questions and have no idea where to begin. The first step in your journey is to narrow those questions down to the most important, which are:

  • What are private label products?
  • Where to find private label products to sell?
  • How to price your private label product?
  • How to sell private label products?
  • Tips on successfully sell your private label product

But first...

What are private label products?

Private label products are products that are created by one company and then sold and branded by another company.

You see examples of private label products all of the time and one of the best companies for private label products in Costco's Kirkland branded products. To give an example, Kirkland sells their own version of diapers, but they actually purchase those diapers from one of the largest manufacturers of diapers.

Where to find private label products to sell?

Before you start looking for a supplier, you first need to find a product to sell. There's a lot of different ways to look for a product to sell. You can approach it either manually or use a research tool to help you find a product.


Criteria for finding the perfect private label product to sell

Whichever way you choose, you need to keep in mind that the goal of product research is to narrow your search as much as possible. We recommend to all new sellers to look for products that fit these 4 key characteristics:

  1. Sells between $20-300

    • Unless you sell in mass volume, products priced below $20 will get crushed by Amazon fees.
    • Most Amazon product purchases fall between this range
  2. 60% Gross Margin Before Fees

    • Gross margin = (Sales Price - COGS) / Sales Price
  3. Not Saturated

    • If the market is saturated, then make sure you can offer a unique value proposition that isn't already available. Otherwise, keep searching.
    • General Rule of thumb is if the product you want to sell has over 2 pages of the product in question with only simple item variations (color, size, etc.) then it's probably going to be too difficult for a newbie to break into.
    • WARNING: A lot of new sellers use product research tools like Junglescout and it's not uncommon to hear a new seller talk about finding the perfect product only to realize once they started selling it that everyone else also found said product.
  4. Has sufficient demand

    • Search common keywords for your product to see how high the demand is.

Now there's always exceptions to every rule, but these are good guidelines to follow when you're first starting out finding a product. We also recommend that you do not spend too much money on your first product as most sellers do not turn a profit on their first go - this isn't a get-rich-quick scheme as any veteran will tell you.


Finding a supplier for your private label product

10 years ago, sites like Ali Baba were hit or miss in regards to finding reputable suppliers, but now it's easier than ever. These are the best places to look for finding suppliers.

Ali Baba

The undisputed king for finding suppliers and manufacturers.

ThomasNet

It is free and you can search for manufacturers by product and location.

Zentrada

This is Ali Baba for European markets. You can generally find better quality items here, but they're also more expensive.


How to price your private label product?

Many new sellers often overlook pricing strategy and just list their products at whatever the competition is or whatever brings in their desired ROI, but if you do this you're setting your product up for failure.

When you first start out, your product isn't going to have a lot of traction, because it doesn't have any sales, zero reviews and zero views. This means your product isn't going to rank well.

So here are some things you can do to gain some traction for your new product:

  1. Price your product below the competition

    • I've seen some sellers cut the price by 70%, but I wouldn't recommend this.
    • Start between 10-20% cut and see how your product does.
  2. Change the price of your product once a week

    • Changing prices on products that customers have recently viewed, triggers Amazon to send out emails to customers notifying them that the price went down.
  3. Get started with PPC

    • If you're brand spanking new to selling on Amazon, we do NOT recommend this. However, if you're familiar with PPC campaigns, then this is a good way to get quick sales with your new product.
  4. Advertise locally

    • Let your social media friends and family know that you're a proud new Amazon seller and show them what you're selling. There's nothing again Amazon's TOS that says social media friends can't buy your goods

How to sell your private label products on Amazon?

When setting up your Amazon Seller account, you have two options to choose from:

Amazon Individual Seller Account

  • Free to sign up
  • 99 cents per sale in addition to 15%

Amazon Professional Seller Account

  • Costs $39.00/mo
  • Allows you to sell branded products

If you're just getting your feet wet, we suggest going with the individual account, but if you're serious about making it as an Amazon Seller, the professional account makes more sense - once you sell over 30-40 items, it's paid for itself.

UPC Barcodes

All Amazon products require a UPC barcode, so you'll need one of these before listing your product. Amazon only accepts GS1 codes and you can purchase them from the GS1 website in blocks OR you can purchase them from Nationwide Barcode, which sells you barcodes in piecemeal.

Creating a great Listing

First, what's a great listing?

  • A great listing grabs the viewers attention
  • A great listing has all necessary information and limited fluff
  • A great listing has clear, crisp pictures
  • A great listing is priced strategically
  • Most importantly, a great listing has a high conversion ratio

Listings are composed of 4 pieces: images, title, bullet points and product description. Slack off on any one of these are your conversion rates will suffer.

Taking Great Photos of Your Product

Product images are by far, the most important part of your listing. So if you're not good at taking photos, you need to either get good or hire someone to take photos for you.

If you're just selling a couple of products, it might be cheaper and more time efficient to hire someone, because buying the proper tools to take good pictures can cost just as much as hiring a qualit photographer.  

Whatever path you choose, here are some guidelines you'll want to follow:

  • More the better - Use all of the image slots that Amazon allows
  • 1000 x 1000 pixels - Minimum width required for image zoom.
  • Fill up the entire frame - Don't have your product take up just one corner of the frame. Use it all.
  • Multiple Angles - Take pictures from multiple angles
  • Include Brand Logo - if your product is branded, include a photo of it in the images. This will prevent hijackers from stealing your product.

Optimizing Your Listing

Another important aspect to your listing is your listings keywords. Amazon allows you to add keywords to your listing so that potential customers can find your products. Without proper keywords, customers won't be able to find your products.

Here are some guidelines when creating product keywords:

  • No commas
  • No repeated words
  • No variations of the same word, e.g., color and colors
  • No misspelled words
  • Do not use competitor's brand names
  • Use keywords in your competitor's description
  • Don't use words that are also in your product's title
  • Synonyms are your friend

Successfully sell your private label product

When you're first launching your product you have 3 primary goals:

  1. Sell as many products as possible
  2. Get as many positive reviews as possible
  3. Avoid negative reviews and feedback at all costs

These are the ONLY things you need to worry about in the beginning. Don't worry about turning a profit yet or even your products sales rank. You need to show Amazon that your product has potential to sell and if they see potential, your product will automatically move up in rank and as it does, you increase your price.

Sell as many products as possible

As mentioned before, one way to sell products quickly is to price cut your competitors. This usually means you'll be eating the cost, but it's worth it if you can drive sales this way. Another option is to pay for clicks via advertising on Amazon. Although, this can be very costly and if you don't know what you're doing here, then you could end up just throwing all of this money away.

There are also launch services that help you get more sales, but some of these services are actually against Amazon's TOS (terms of service) and could get you suspended.

Regardless of what you do, you should always be promoting your product via social media. It's an obvious answer, but you'd be surprised how bad some people are at promoting their products on social media. We'll go into more detail on how to effectively target your audience via social media campaigns and promotions in a later article.

Getting Amazon Product Reviews

It's estimated that for every 200 sales, only one person leaves a product review... one. It's notoriously difficult to get product reviews on Amazon, but some sellers do find ways increase their odds of getting reviews by asking for feedback via email and/or note in the package.

An email autoresponder is a great way of connecting with the buyer and asking for feedback because you can leave the review link in the email so all the buyer has to do is click on it and write the review, which is a lot easier/faster than logging into Amazon, going to orders, finding the product and clicking on leave review.

But don't think that simply asking for reviews is going to work, because it rarely every does. We find that the best way to get buyers to click on that review link, is to give a little something extra in that email. That little something extra could be an eBook, instructions, warranty information or even a funny story that you know would connect with your customers. If you want a better idea on how to write perfect email campaigns click here.

Avoiding Negative Reviews and Feedback

A 1 star review on a new product with no other reviews is catastrophic and you'll find it nearly impossible to recover at that point. To make matters worse, most buyers on Amazon tend to shoot first and ask questions later when it comes to expressing their grievances.

That's why it's imperative to avoid negative reviews at all cost on new products.  Here are some ways to avoid negative reviews:

  1. Emailing services also serve as a contact point for your customers - if they have issues, they can just reply to your email rather than going on Amazon
  2. Don't miss the ship-by date
  3. Answer any questions ASAP
  4. Be honest and open in communication
  5. Monitor your product reviews - there are services that notify you as soon as a negative review is left

In the event you do get a negative or even a neutral review, then it's important that you act fast as there are ways to get reviews removed and altered. To find out how to remove negative reviews read this article here.