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What Does Private Label Mean on Amazon?

There are many different ‘ways’ of selling products on Amazon and Private Label is one of them. Put simply, Amazon private labeling is when a seller purchases products from a manufacturer or supplier, creates a unique brand, and then proceeds to market and sell those products under their brand name. 

A typical example is AmazonBasics. Here, Amazon doesn’t manufacture the products—it sources them from vendors and sells them under its own brand. Private Label is a form of third-party selling and is how more than half of all sellers on the platform choose to do business.

Private Label vs. Other Ways of Selling Products on Amazon

Private label is popular, sure, but is it the best way to sell? Are other forms of selling products more lucrative? 

There are a few reasons why private label is superior to other selling models such as wholesale, dropshipping, retail arbitrage, online arbitrage, and handmade, some of which are:

  • Complete control over the business: Unlike wholesale (selling existing products on Amazon), you have complete control over the business and don’t risk engaging in price wars or going to great lengths to obtain reselling privileges. Set the price, ad budget, stock, and product availability as you see fit.
  • Decreased competition: Some product listings can have more than 50 to 100 sellers offering the same product. There’s far less competition to deal with a private label brand and more room for creativity and self-expression.
  • Improved marketing capabilities: After getting your brand registered, you can upload A+ content, adding more visuals and information to your product detail page. Given how competitive Amazon marketplaces can be, this feature provides a significant edge over the competition.

The best part about operating a private label business on Amazon is that you can do everything from product research to sourcing and shipping from the comfort of your own home.

Private Label Product Research Criteria

To find the best private label products to sell on Amazon, you must first learn what a great product looks like. We’re not talking about a niche or category; a ‘winning’ product must tick all the right boxes or in other words, match set criteria. 

When researching products, check to see if they meet the following criteria:

Are In demand

The first and arguably most important factor when it comes to product research. To accurately determine how popular or in-demand a product is, you have to rely on keyword research tools—there’s no room for intuition here. 

A keyword is the search term visitors on Amazon use to look up products they’re interested in. Demand is calculated based on how many times a keyword or search term is per month. 

Are Not Hyper-Competitive

By itself, high demand doesn’t make a product worthy of being marketed and sold. In most cases, high demand comes with increased competition, which translates to considerable advertising and ranking expenses. 

One trick is to look out for products that are increasing in popularity and then start selling it before others realize the potential for sales and profit. Of course, this is easier said than done, but there are surprisingly easy ways to find such products, all of which you’ll learn later in this blog. For now, the focus is on understanding what makes a great product ‘great’.

Have Relatively Fewer Product Reviews/Positive Feedback

Amazon’s success hinges on satisfying its customers. It pumps billions of dollars each year to ensure its products and services leave no room for complaint. Amazon considers positive customer reviews/star ratings a crucial ranking metric to ensure all third-party sellers adhere to set quality standards.

Brands that amass a good chunk of reviews and 4+ star ratings get pushed to the top of search ranking pages. Additionally, some categories feature top sellers with tens of thousands of positive ratings—stay away from such products. 

Note how all the top sellers for “car charger adapter” have more than ten thousand positive star ratings

Even if your product is superior in comparison to the number one positioned seller, it could take years’ of advertising and thousands of dollars to compete with such giants. In the meantime, they’ll have gathered even more product reviews to add to their total count. 

Try to target niches where the top sellers have less than 500-1000 reviews individually.

Some niches might have lower than average review ratings indicating that sellers cannot address consumers’ pain points. If you can identify the reasons behind negative ratings and source superior quality products, then that’s an ideal opportunity that you should capitalize on as soon as possible.

Are Evergreen Products with Consistent Annual Sales

Budding new sellers should research products that have consistent demand all year round. Sweaters, skiing equipment, sun hats, and back-to-school items are some examples of seasonal products. On the other hand, evergreen products sell well all year round, examples of which include toothbrushes, kitchen accessories, paper bags, etc. 

Example of products sold during the winter season

Proponents of seasonal items are quick to point out the immense potential for sales that’s enough to offset the lack of demand during the off-season—which is true. But the downsides to such products make them a poor choice, particularly for first time private label sellers.

When selling seasonal products, there is little to no room for mistakes. Shipping issues, labeling errors, and unforeseen circumstances can cause you to miss the one opportunity you have to make money. 

Because other seasonal product sellers are also looking to cash in on the influx of new customers, you might have to offer discounts on your products to secure a sizable chunk of the pie. Unfortunately, this strategy forces sellers to cut down on profits and further reduces the viability of selling such products.

Are Not Brand or Amazon Dominated

A product niche where either Amazon (under the name Amazonbasics) or a single seller occupies 4 out of the top 10 seller rankings is considered Amazon or brand dominated. 

In such scenarios, plenty of profit cutting and ad spend is needed to break into the top ranks, which isn’t a wise business strategy, to say the least. The situation gets worse for Amazon-dominated product niches where it’s nigh-impossible to compete on price alone. That’s because Amazon:

  1. Purchases products in bulk to keep costs low
  2. Does not have to pay for storage and shipping expenses
  3. Incurs no FBA costs

Target product niches that are open, which is the case with most categories.

Note: Amazon does not make Amazonbasic products. It purchases them from manufacturers and sells them under its label, hence the variation in quality for Amazonbasics’ products across different categories.

Qualify for the Small and Lightweight Program

Amazon created a separate FBA program for small-dimensional and lightweight products called the Small and Light (SnL for short) program. Until recently, sellers stayed away from listing products priced below $10. That’s because the FBA fees alone would eat a significant chunk of the profits. So to encourage more people to sell such products, Amazon introduced the SnL program, which offers these benefits:

  • Lower fulfillment fees: Reduced fulfillment fee results in more significant profit margins and opens the doors to selling millions of products that, until recently, were not viable. It also lets you price competitively to win more sales. 
  • Amazon A-Z guarantee: Since SnL is an essential part of the FBA program, selling becomes easier. Amazon’s customer support services handle all the heavy lifting ,including refunds. 
  • Free Prime delivery: Successfully enrolling in the SnL program means that your products become eligible for free prime shipping. You’ll also be able to market goods to millions of active Amazon customers!

Keep in mind: while selling small and lightweight products allows you to avail all of these benefits, lower-priced products equal lower profits per sale. So a product priced at, let’s say, $50 will be more lucrative than one priced at $7, given the same amount of sales. 

The list of Amazon marketplaces where the SnL program is currently available

That said, qualifying for the small and lightweight program is more of a consideration rather than a benchmark. If the product you’re interested in is not eligible for the SnL program, it’s perfectly alright—match it against the other metrics mentioned in this list.

Note: See the Small and Lightweight program criteria for each Amazon marketplace by visiting the official page.

Boast Multiple Variations or are Breakable

It makes good business sense to sell essential products i.e. those with annual demand, easy to manufacture and source, lack tough competition, etc. Another critical attribute is the number of variations the product has on average. 

Take clothing, for example. It’s rare to find a seller offering a t-shirt with no size or color option to choose from. The greater the variations, the more challenging it is to ship and manage inventory and anticipate demand. There’s trial and error involved before you can determine how well each size/color combination sells.

Clothing items need to have plenty of color & size variations to remain competitive

Similarly, products made out of glass or easily breakable materials increase the risk of negative reviews and returns. To ensure such products reach customers in one piece, extra padding and protection must be incorporated into the packaging, incurring additional costs. 

However, similar to SnL products, the number of variations and product material isn’t necessarily a deal-breaker. If there’s potential in a product and it ticks all the other boxes, it could prove to be a best-seller!

Belong to a Restricted or Gated Category

As the name implies, restricted categories prevent new sellers from listing products unless they’ve been granted access by Amazon or the respective brand owners. Restrictions are of three types:

  • An entire category restriction
  • Specific sub-categories or niches are restricted, whereas others are open to all entrants
  • Certain products are restricted also known as product or brand restrictions

The list of restricted categories varies based on the marketplace; what’s restricted on Amazon.com may be ungated on Amazon.uk. Also, the product, category, and sub-category restrictions may change from time to time.

Selling in restricted categories has its pros and cons (we wrote an extensive guide on how to get unrestricted on Amazon). Suffice to say, new sellers should start by selling products in open categories. 

The Best Selling Products on Amazon

One hassle and cost-free way of finding out which categories have the best selling products is analyzing the Search Terms report. This report is only available to Brand Registered sellers and can be viewed by: 

  • Hovering over the Brand tab 
  • Clicking on Brand Analytics
  • Selecting the Amazon Search Terms report option 
  • Adjusting the range (select monthly or quarterly)

After completing these steps, you can view or download the list of the most popular search terms during a given period. Here are what the results look like:

The most popular search terms for August

The next step is to click on the top-ranking ASINs and scroll down to the Product information section. Here, you can see which category the product belongs to. Repeat this process and you’ll soon see which product category boasts the highest number of popular products for that specific period!

Amazon Private Label Research Methods

Now comes the part where we start hunting the best private label products to sell on Amazon. Private label research is divided into two parts:

  1. Manual research methods
  2. Research via the use of advanced third-party seller tools

If you’re a seasoned seller, there’s a high chance you’ve already come across the manual research methods before. However, they’re still a good starting point for newbie private label sellers who want to understand how product research works. Let’s go over a few basic methods before moving onto the more advanced stuff.

Manual Research Method #1: Use Seed Keywords & Related Products to Generate Fresh Ideas

A ‘seed’ keyword is the main word or phrase that forms part of users’ search terms These are usually generic words that are used to generate a list of product ideas to validate later on. 

Let’s assume that you’re interested in selling a product in the Pet Supplies category. Type in generic words like ‘pet’, ‘cat’, or ‘dog’ in Amazon’s search bar and see what suggestions pop up. These suggestions are usually related to products that are currently trending or have a high number of sales.

Leverage Amazon’s auto-suggest feature to discover related products

The research doesn’t stop there; once on the product page, scroll down to the “Frequently bought together” section which shows complimentary items. The products included in this section are worth checking out as well.

Manual Research Method #2: Visit Rebate and Discount Coupon Websites

Websites like RebateKey and Jump Send were all the rage a few years ago. Their popularity stemmed from: 

  1. The fact that buyers could purchase their favorite products at heavily discounted prices and
  2. By offering products at meager prices (sometimes even at a loss), buyers drastically increased sales velocity, which ultimately improved BSR (Best Seller Rank on Amazon)

Soon Amazon caught wind of this tactic and reduced the impact discounted product purchases had on rankings. Nevertheless, these websites still have numerous promotions on display including coupons, deals, and rebates. 

It serves as a hotbed of product ideas and is one of the easiest ways to find up-and-coming products (since sellers are least likely to promote products that lack potential).

Manual Research Method #3: Check out Alibaba, AliExpress, and eBay

It’s no secret that most Amazon sellers source their products from China, particularly Alibaba.com. That’s because very few can compete with Chinese manufacturers when it comes to price. Purchase in bulk, and you can secure even lower rates, allowing for sizable profit margins.

Clicking on the search bar will reveal popular searches for the month

Just like Amazon features top-selling products on its main page in a bid to win over more customers, Alibaba.com displays products that are in demand among Amazon sellers. In essence, B2B platforms like Alibaba.com provide valuable insight for sellers searching for new product ideas.

AliExpress and eBay are similar eCommerce platforms worth visiting. Note down the products you think would sell well to validate later using third-party tools.

Manual Research Method #4: Inspect Amazon Best Sellers

What better way to find the best private label products to sell on Amazon than by asking Amazon itself? Just below the search bar is where you can find the Best Seller option. Click on it, and more categories appear such as New Releases, Most Wished For, and Movers & Shakers.

Browse Best Selling products and validate them using Zonguru’s Niche Finder tool

Browse through the different categories to get an idea about what buyers are interested in real-time. The list is updated hourly, so you don’t have to worry about relying on outdated information; an easy way of researching hot products.

The Ultimate Research Method: Powerful Third-Party Tools to Find Best Selling Private Label Products in Seconds

All of the manual research methods discussed until now are valid and effective methods of product research on Amazon. Practically speaking; however, most sellers don’t have the time to search keywords and shortlist products. Instead, they want an easy and quick way of picking out products with a high potential of generating income.

In that regard, a reliable product research tool like Zonguru can help you find the best private label products in a matter of seconds. Here’s how it works:

Step 1: Click on the Product Research drop-down menu and select Niche Finder. Set your marketplace (Amazon.com in this case) and if you want, select the product categories in which you want to sell.

Easy mode is the easiest way of hunting great private label products!

Step 2: As you can see in the image above, the Niche Finder tool has an Easy mode and an advanced mode. For now, let’s focus on the Easy mode as our concern is to find the best private label products as fast as possible.

After selecting the marketplace and product categories, you’ll see the Quick Filters section with three options; each caters to users based on their selling experience and budget. 

  • Easy Starter is for brand new sellers wanting to launch their first product
  • Business Builder is suited for mid-tier sellers with a long-term goal and a sizable investment to work with
  • Big hitter caters to serious sellers with lots of experience under their belt and deep pockets needed to launch products with high potential for returns

Enter a keyword if you wish to extract details about a specific product or just hit the Search button to let Niche Finder find the best products for you. We chose the Pet Supplies category, and here’s what popped up:

A high overall Niche Score is indicative of an amazing private label product

The above image requires some explanation. See the section highlighted in red? These additional filters let you sift out the most valuable private label products from thousands of others belonging to the same category. 

  • Niche Score: An overall ranking metric that assigns a score from 0 to 100%. The higher the score, the more likely the product will perform well. The Niche Score is calculated based on the buyer demand, competition, investment, and revenue potential
  • Buyer demand: Numerous data points are used to calculate how likely customers will purchase this product
  • Competition: How strong or weak competitors are within the niche
  • Investment: How close the required investment is to the ‘sweet spot’ i.e. the budget range within which most successful private label sellers fall
  • Revenue potential: The percentage of profitable sellers within a niche.

Clicking on ‘Niche Score’ sorts out the results in ascending or descending order.

Make sure the product of interest has a monthly search volume of more than 5,000!

These are some of the best private label products within the pet supplies niche to sell on Amazon. Hover over a keyword to see more details about the product. In this example, the image shows stats for a ‘fly mask’. A healthy monthly search volume, a good amount of average sales, relatively fewer average ratings, and other factors give this keyword a sound 69% Niche Score.

We advise searching for private label products in other categories as well—it’s not that hard to find products with niche scores as high as 95-97%!

The advanced mode is better suited for experienced sellers. It lets you specify the type of products based on keyword relevancy, percentage of FBA sellers, and how well the listings are optimized. Not only that, but you can also set a range for the:

  • Monthly search volume
  • Launch budget 
  • Estimated PPC bidding cost
  • Average product price
  • Average combined monthly revenue for the top 25 product listings
  • Average number of ratings
  • Average number of reviews

The more details you add, the more specific the search results will get. 

Use the advanced mode to get results that cater to your budget

If any of this seems confusing, there’s a video tutorial section at the top right corner which you can access at any time to learn how each feature works.

Need guidance on any one of Zonguru’s tools? Click on the video tutorial to get help!

And there you have it—finding the best private label products to sell on Amazon in a matter of seconds. 

Conclusion – Private Label Products

An Amazon Private Label business has many moving parts but with a solid product in hand, your chances of success increase exponentially!

The Zonguru Niche Finder tool helps in finding the best products to sell on Amazon. It also comes along with 15 additional tools catering to every aspect of FBA selling. Powered by successful sellers, Zonguru isn’t your average seller toolkit—a subscription includes access to live one-on-one personal training with six-to-seven figure sellers, tons of free content, and 24/7 customer support!

Oh, and here is  a free eBook with 100 Hot Products across virtually every category on Amazon. You’re welcome!

Do you know how people discover the best private label products to sell on Amazon? It’s simple; they keep in mind one important point:The question is not what to sell, but what not to sell on AmazonThink about it; there are around 353 million products listed on the platform (excluding Books). The choice of products to sell may be endless; however, not every product has the potential to rack up sales.Sellers that make $100k+ or $1M+ in revenue do so because they rely on tried-and-tested research methods to find trending private label products. In this post, you’ll learn research techniques utilized by the six-to-seven figure sellers, and by the end you will be able to identify hot products opportunities with ease!

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