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Amazon private labeling has enabled tens of thousands—if not millions—of people to earn multiple times the average salary a United States citizen makes using only a laptop. 

These sellers didn’t visit manufacturing hubs overseas or spend months acquiring product development skills; they learned how to source and promote goods on Amazon and put their knowledge into practice.

A disclaimer: creating a profitable Amazon private label store doesn’t need much legwork but it definitely requires hard work—private labeling isn’t an overnight get-rich-quick scheme. 

However, with consistency, dedication, and a willingness to learn and improve, Amazon selling can balloon your income and create digital assets that pay dividends for years to come.

In this post, you’ll learn how to source private label products wholesale and create a powerful brand on Amazon!

What is Private Labeling on Amazon?

Private labeling is the practice of sourcing ready-made products from manufacturers and applying your own branding to it. It’s a selling model that allows merchants to bypass the product development phase, outsource manufacturing, and jump straight to selling unique products online. When done right, Amazon private labeling has the potential to generate millions in revenue.

Private Label vs. White Label vs. Wholesale

Private labeling isn’t the only way to sell and do business on Amazon—there’s wholesale and white label too. Knowing how each business model works helps avoid confusion during the early stages of online selling.

  • Private label: As you’ve just read, sellers brand private label products manufactured by third-parties and claim them as their own. Of all the ways to sell on Amazon, a successful private label business offers the highest possible returns depending on how the brand builds and grows over time.
  • White Label: White label products are goods created, serviced, and controlled by one company to be purchased and sold by another. Multiple retailers may sell the same product (after applying their brand logo to it)
  • Wholesale: Wholesalers bulk purchase products directly from the manufacturer (at a discount) and proceed to resell them on Amazon. Unlike white label selling, merchants don’t own wholesale products; they act as middlemen. 

There exist selling models on Amazon other than white label and wholesale e.g. dropshipping and arbitrage. So why choose private label over the rest?

Advantages of Private Label 

Some advantages of selling private label goods include:

  • Product differentiation: A wholesale or dropshipping eCommerce business lacks creative control because it has to sell branded products to make money. Even if you understand the product better and have ideas on how to improve the business, you can advise at best. With private label, the decision-making is in your hands.
  • Complete ownership: With private label products, you own the brand as well as the product. You also get to keep 100% of the profits. 
  • Scalability: Due to the nature of the business, a wholesaler or a dropshipper must invest more time to make more money. Scaling a private label brand and increasing revenues relies more on your eCommerce wit than it does on pumping more hours into the business.

Perceived Disadvantages of a Private Label Brand

Private label has its fair share of detractors—the following are popular ‘disadvantages’ of private label products:

  • High upfront costs: Sellers need a sizable budget to sell private label products online. The initial cost of purchasing inventory, applying for a trademark, and setting up PPC campaigns make dropshipping or arbitrage appear as more viable options for those strapped for cash.
  • Profitability takes time: You could source the best items available and list them on Amazon but the truth is, it may take a few months before a private label business becomes profitable. 
  • Private label is complicated: Amazon Private label has many moving parts—it takes time to learn all the steps involved in creating and running a private label store. Dropshipping and wholesale, on the other hand, are easier to learn and provide faster ROIs.

Although these points are touted as disadvantages, they aren’t as bad as they seem. Yes, private label does require a higher upfront cost but it offers the biggest possible returns as well—sometimes multiples of what is required to set up the store. With bigger risks come bigger rewards.

Profitability does take time but once your product edges closer to the top ranks, you need to exert less efforts to sustain the business. Compare this with dropshipping and wholesale where unexpected price wars or contractual disputes with manufacturers and suppliers can bring your business to an abrupt halt. 

Finally, private label seems complicated but it doesn’t have to be—YouTube and Google contain plenty of experts on how to sell private label product guides.

How to Start a Private Label Business – A Step by Step Guide

The private label process—end to end—can be summed up in 5 stages. Each stage includes only the information new sellers need to know to sell private label products on Amazon. 

  1. Product or Keyword Research
  2. Sourcing reliable product manufacturers
  3. Amazon listing optimization
  4. Advertising your products

Let’s start with step 1: Identifying niche products to sell on Amazon.

Identifying Niche Products to Sell on Amazon

Amazon has a combined product count of 353 million products but not all of them sell well, and some don’t sell at all. Just like most people don’t venture beyond the first page of Google, buyers prefer to purchase items listed near the top of Amazon search results.

The ‘right’ product is defined by a few characteristics like:

  • High-demand (i.e. high monthly sales and search volume for a particular search term)
  • Low-competition (fewer sellers offering the same or similar products)
  • Non-seasonality (e.g. sweaters and swimsuits that sell during specific times of the year)

Other factors worth considering include average number of reviews (preferably less than 1,000 on average), product price (between $12-100), product tier size (Standard-sized), and the fulfillment method (FBA over FBM)

Popular Amazon categories filled with product opportunities in 2022 include:

  • Pet Supplies
  • Beauty & Personal Care
  • Baby Products
  • Health & Household
  • Office Products

A rookie mistake to avoid is to select products based on your ‘gut feeling’—in the world of online selling, success has to do more with data than intuition. Ask profitable sellers how they manage their affairs and you’ll discover that most rely on third-party seller tools to run their Amazon business. 

And although there exist manual methods of product research, insights gained from using reliable product hunting software provide sellers with the competitive edge needed to dominate targeted niches.

Not seen a reputable seller tool in action before? Check out the image below.

Image Caption: The ZonGuru product and keyword research tool called Keywords on Fire.

The above is a screenshot of a top-rated seller tool like ZonGuru that helps new sellers uncover the best-performing products to sell on Amazon. You start by typing in a desired product (or keyword) and the tool extracts information straight from Amazon’s database. These insights help determine whether a product is worth investing in or not.

The tool analyses average number of reviews, units sold per month, ad spent per keyword, and other variables to assign an overall score. The higher the score is to 100, the more likely it is to succeed and make money for the owner. 

The following are a list of popular products (for Amazon US) worth looking into using a tool like ZonGuru:

Pet Supplies:

  • Cat water fountain (93k MSV)
  • Cat scratching post (100k MSV)
  • Dog cooling mat (49k MSV)
  • Dog life vest (25k MSV)
  • Flea collar for cats (15k MSV)
  • Elevated dog bowls (30k MSV)

Beauty & Personal Care:

  • Makeup organizer (233k MSV)
  • Hair bands (37k MSV)
  • Nail polish set (42k MSV)
  • Makeup mirror (22k MSV)
  • Hair curling iron (18k MSV)
  • Hair extensions (107k MSV)

Baby Products:

  • Baby monitor (111k MSV)
  • Pregnancy pillows (85k MSV)
  • Diaper bag (114k MSV)
  • Pet gate (42k MSV)
  • Baby gate for stairs (42k MSV)
  • Baby car mirror (21k MSV)

Health & Household:

  • Knee brace (78k MSV)
  • Coffee cups (76k MSV)
  • Gloves disposable latex free (53k MSV)
  • Disposable plates (35k MSV)
  • Mop and bucket (34k MSV)
  • Drain cleaner (25k MSV)

Office Products:

  • Laptop stand for desk (74k MSV)
  • Pencil pouch (74k MSV)
  • Office chair mat (22k MSV)
  • Dry erase board for wall (17k MSV)
  • Postage stamps (24k MSV)
  • Document organizer (22k MSV)

Note: High monthly search volume keywords usually require larger budgets to launch and rank on Amazon.

Sourcing Reliable Product Manufacturers

Reliable private label manufacturers form the cornerstone of a successful online business. They’re responsible for providing quality products, offering live support, shipping inventory on time, and not hiking up prices or nullifying the contract without due notice.

Finding such manufacturers can prove to be challenging if you don’t know where to look. The following are popular marketplaces (and product sourcing apps) for sourcing products online:

  1. AOP+ Easy Print on Demand
  2. SupplyMeDirect
  3. Apliiq – Print on Demand
  4. Modalyst
  5. AliExpress
  6. Dripshipper
  7. Alibaba.com

Out of these 7 marketplaces, the best private label manufacturers are found on Alibaba.com. 

Image Caption: Alibaba.com – the sourcing hub for third-party Amazon sellers.

Alibaba.com is one of the world’s largest online marketplaces connecting distributors and suppliers with Amazon and eBay merchants. A quick search unveils manufacturers for just about any product that sells on Amazon. The trick is to know how to find the right people for the job. 

Just as you would look at review ratings and customer feedback to purchase the best products on Amazon, you must also vet manufacturers on Alibaba. Check whether prospects have the following attributes next to their company names:

  • Verified Logo: A blue-colored verified logo means that the manufacturer has passed an inspection test conducted by a reputable third-party e.g. SGS group.
  • Supplier Online Performance Index: Or SOPI for short, this index analyses manufacturer performance and assigns 0 to 5 red gems with 5 awarded to the highest performers. 
  • Experience: How long the manufacturer has been actively selling on Alibaba.com. Avoid working with those with less than 3 years’ worth of experience. 
  • Seller Ratings: A 1-5 seller rating based on customer feedback. Choose manufacturers with a minimum 4.6 average rating score.

Sourcing products from Alibaba.com also requires you to get in touch with potential manufacturers and ask the right questions. For more details on how to work with the right suppliers, check out this Alibaba product sourcing guide.

Amazon Listing Optimization

With the right product in hand and a reliable manufacturer by your side, it’s time to set up your Amazon store. Create an Amazon seller central account and choose a selling plan. Since you’re most likely interested in selling private label products wholesale, opt for the Professional selling plan that caps at $39.99 per month regardless of how many products you sell.

Image Caption: Differences between the Individual and Professional selling plans on Amazon.

An Amazon listing (or product detail page) is where buyers get to know more about your product—its purpose, usage, dimensions, possible color variations, etc. However, the listing doesn’t just tell visitors how to use your product but also serves to convince buyers that your offering is the best. Amazon listing optimization is a two-fold process:

  1. Ask manufacturers to ship over samples and also order some from your competitors. Compare the two and jot down your competitors’ strengths and your products’ weaknesses. Relay this information to your manufacturer and ask them to incorporate the necessary changes (do this before ordering your first batch of inventory)
  2. Create attractive content for your product listing. The listing content (or copy) must be authoritative and compelling enough to convince buyers to purchase your product.

In addition to these two-steps, adhere to the following guidelines:

  • Product images: Upload up to 7 product images (you can include an infographic) and showcase your product clearly against a white background in the main image.
  • Product title: Every word in the product title must have its first letter capitalized and you should also include your main keyword in this section. The general format for creating product titles is: Brand name + main keyword + product features.
  • Bullet points: Explain your products main features and benefits and utilize secondary keywords as much as possible.
  • Description: Add further details about your product (which you couldn’t add or explain at length in the bullet points section). If you still have keywords left, add them in the product description.
  • Variations: Create separate listings for products with variations like color, size, scents, etc. 

The last stage of the private label journey is to market your product to relevant audiences.

Advertising Your Products

Advertising Amazon products is done mainly through a PPC (Pay-Per-Click) model. Even though some people leverage social media platforms to bring in external traffic, Amazon PPC remains the most potent weapon in sellers’ advertising arsenal.

Explaining how to use Amazon’s PPC model to maximum effect requires a blog of its own (P.S: check out this Amazon PPC training guide for more details) but for the sake of brevity, here are the three types of PPC ad campaigns you can create to bring in sales:

  • Sponsored Products
  • Sponsored Brands
  • Sponsored Display

If this is your first private label rodeo then we recommend sticking to sponsored products campaigns—they’re simple to launch and maintain and produce results. 

Conclusion – Sell Private Label Products Like the Pros!

If you found this post helpful, you can bookmark it for future reference. However, truth be told, encompassing and explaining the entire private label journey is beyond the scope of one blog. Add to that the fact that Amazon’s online selling policies change from time to time and it’s easy for new sellers to make costly mistakes.

Whether you’re just starting your Amazon journey or been in the game for a while, ZonGuru has just what you need to improve your business. Sign up for a FREE trial today, cancel any time.

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