How to Start and Grow Your Amazon Private Label Business in 2023
Amazon is the largest and most popular e-commerce platform in the world, with over 300 million active customers and millions of products for sale. If you want to start your own online business and sell products on Amazon, one of the best ways to do it is by creating your own private-label brand.
A private label brand is a product that you sell under your own brand name, but that has been manufactured by someone else. In other words, you decide what products you want to sell, contact a manufacturer and have them produce those goods for you, apply your own brand label on the products, and then sell them on Amazon.
Private label selling has many advantages, such as:
- Higher profit margins: You can buy products at a lower cost from the manufacturer and sell them at a higher price on Amazon, keeping the difference as your profit.
- More control: You can customize your products according to your own preferences and customer feedback, creating a unique value proposition and differentiation from your competitors.
- More exposure: Amazon favors private label products and gives them more visibility and ranking on its platform, especially if they have good reviews and sales performance.
- More loyalty: You can build your own brand identity and reputation, attracting repeat customers and referrals who trust your products and service.
However, private-label selling also has some challenges, such as:
- Higher upfront investment: You need to pay for the product development, branding, packaging, labeling, inventory, shipping, and marketing costs before you start selling and making money.
- Higher risk: You are responsible for the quality and safety of your products, as well as complying with Amazon’s policies and regulations. If your products are defective, infringe on someone else’s intellectual property rights, or violate any rules, you may face negative reviews, refunds, lawsuits, or account suspension.
- Higher competition: You are not the only one who wants to sell private-label products on Amazon. There are thousands of other sellers who are doing the same thing, some of whom may have more experience, resources, or marketing skills than you.
So how do you start and grow your Amazon private label business in 2023? Here are some steps that you need to follow:
Step 1: Do Your Product Research
The first and most important step is to find a profitable product niche that you can sell on Amazon. You want to find a product that has high demand, low competition, good margins, and low seasonality.
There are many ways to do product research, such as:
- Using online tools like Jungle Scout or Helium 10 that can help you analyze the market data and trends on Amazon.
- Browsing through Amazon’s bestseller lists, categories, subcategories, and filters to see what products are popular and profitable.
- Reading customer reviews, questions, and feedback to see what problems they have with existing products and what improvements they want.
- Looking at other platforms like Alibaba, AliExpress, eBay, Etsy, or Pinterest to see what products are trending or selling well there.
- Following your own passions, hobbies, interests, or expertise to see what products you can create or improve based on your own knowledge and experience.
Some examples of popular private-label product niches in 2023 are:
- Household items: such as candles, diffusers, organizers, cleaning supplies
- Groceries: such as coffee beans, Tea, spices, snacks
- Electronics: such as headphones, chargers, speakers
- Health and beauty: such as supplements, skincare, haircare
- Pet supplies: such as toys, treats, grooming
- Sports and outdoors: such as fitness equipment, camping gear, water bottles
However, these are just some broad examples. You need to narrow down your niche and find a specific product that meets the following criteria:
- High demand: You want to sell a product that has a large and consistent customer base. You can use tools like AMZScout or Jungle Scout to check the monthly sales volume and revenue of similar products on Amazon. Ideally, you want to find a product that sells at least 300 units per month and generates at least $10,000 in revenue.
- Low competition: You want to avoid selling a product that has too many competitors or dominant brands. You can use tools like AMZScout or Jungle Scout to check the number of reviews and ratings of similar products on Amazon. Ideally, you want to find a product that has less than 100 reviews and less than 4 stars on average.
- Good margins: You want to sell a product that has a high-profit margin after deducting all the costs. You can use tools like AMZScout or Jungle Scout to check the price and fees of similar products on Amazon. Ideally, you want to find a product that has a price between $20 and $50 and a profit margin of at least 30%.
- Low seasonality: You want to sell a product that has steady demand throughout the year and is not affected by seasonal fluctuations. You can use tools like Google Trends or Keepa to check the historical trends and sales rank of similar products on Amazon. Ideally, you want to find a product that has a stable or growing trend and a low sales rank variance.
Step 2: Find a Reliable Manufacturer
Once you have decided on your product niche, the next step is to find a reliable manufacturer who can produce your products according to your specifications.
There are many ways to find manufacturers, such as:
- Using online platforms like Alibaba or AliExpress that connect you with thousands of suppliers from China and other countries. You can browse through their catalogs, request quotes, order samples, and negotiate terms.
- Using online directories like Thomasnet or Global Sources that list verified manufacturers from various industries and regions. You can search by product category, location, certification, and more.
- Using online services like Sourcify or Guided Imports that help you find and vet manufacturers based on your requirements. They can also handle communication, quality control, logistics, and payment for you.
- Attending trade shows or fairs like Canton Fair or Global Sources Trade Show that showcase hundreds of manufacturers from different sectors and countries. You can meet them face-to-face, see their products in person, and build relationships.
Some tips for finding a reliable manufacturer are:
- Do your research: Before contacting any manufacturer, do some background research on their company profile, reputation, experience, capacity, quality standards
- Ask for samples: Before placing a large order, always ask for samples to test the quality, functionality, and appearance of the products. Compare them with your expectations and specifications, and give feedback to the manufacturer.
- Negotiate the terms: Once you are satisfied with the samples, negotiate the terms of the contract with the manufacturer, such as the price, quantity, lead time, payment method, shipping method, warranty, and return policy. Make sure everything is clear and written in a formal agreement.
- Inspect the products: Before shipping the products to Amazon or your warehouse, inspect them for any defects, damages, or discrepancies. You can do it yourself or hire a third-party inspection service to do it for you. If there are any issues, report them to the manufacturer and ask for a resolution.
Step 3: Create Your Brand
Creating your own brand is one of the most exciting and rewarding parts of selling private-label products on Amazon. A strong brand can help you stand out from the crowd, attract loyal customers, and increase your sales.
There are many aspects of creating your brand, such as:
- Choosing a brand name: You want to choose a brand name that is catchy, memorable, relevant, and unique. You can use tools like Namelix or Shopify Business Name Generator to get some ideas. You also want to check the availability of the domain name and social media handles for your brand name.
- Designing a logo: You want to design a logo that represents your brand identity, values, and personality. You can use tools like Canva or Logo Maker to create your own logo. You also want to make sure your logo is clear, simple, and scalable for different sizes and platforms.
- Creating a slogan: You want to create a slogan that summarizes your brand message, mission, and value proposition. You can use tools like Slogan Generator or Oberlo Slogan Maker to get some inspiration. You also want to make sure your slogan is catchy, concise, and consistent with your brand name and logo.
- Developing a brand voice: You want to develop a brand voice that reflects your brand personality, tone, and style. You can use tools like VoiceBuddy or Brand Voice Generator to define your brand voice. You also want to make sure your brand voice is authentic, engaging, and consistent across all your communication channels.
Some examples of successful private-label brands on Amazon are:
- Anker: A leading brand of electronics and accessories that focuses on innovation, quality, and customer satisfaction.
- RAVPower: A popular brand of power banks and chargers that delivers reliable and fast charging solutions.
- Baebody: A beauty brand that offers natural and effective skincare products for various skin types and concerns.
- Mellanni: A home and bedding brand that provides high-quality and affordable sheets, comforters, duvets, and more.
Step 4: Optimize Your Listing
Optimizing your listing is crucial for selling private-label products on Amazon. A well-optimized listing can help you rank higher on Amazon’s search results, attract more clicks and conversions, and boost your sales.
There are many elements of optimizing your listing, such as:
- Keyword research: You want to find the most relevant and profitable keywords for your product niche and target audience. You can use tools like AMZScout or Jungle Scout to discover the best keywords for your listing. You also want to include them in your title, bullet points, description, and backend search terms.
- Title: You want to write a title that is clear, descriptive, and compelling. You can use tools like AMZScout or Jungle Scout to generate optimized titles for your listing. You also want to follow Amazon’s guidelines and best practices for writing titles.
- Bullet points: You want to write bullet points that highlight the features, benefits, and value proposition of your product. You can use tools like AMZScout or Jungle Scout to create persuasive bullet points for your listing. You also want to use keywords, formatting, and emotional triggers to capture attention and interest.
- Description: You want to write a description that provides more details, information, and stories about your product. You can use tools like AMZScout or Jungle Scout to craft engaging descriptions for your listing. You also want to use keywords, formatting, and emotional triggers to build trust and desire.
- Images: You want to upload images that showcase your product from different angles, perspectives, and scenarios. You can use tools like Canva or PicMonkey to edit and enhance your images. You also want to follow Amazon’s guidelines and best practices for uploading images.
- Reviews: You want to get reviews that demonstrate the satisfaction and loyalty of your customers. You can use tools like AMZScout or Jungle Scout to monitor and manage your reviews. You also want to encourage your customers to leave honest and helpful feedback and respond to their questions and concerns.
Some examples of well-optimized listings on Amazon are:
- Anker PowerCore 10000 Portable Charger
- Baebody Eye Gel for Under and Around Eyes
- Mellanni Bed Sheet Set – Brushed Microfiber 1800 Bedding
Step 5: Manage Your Inventory
Managing your inventory is essential for selling private-label products on Amazon. A good inventory management system can help you avoid stockouts, overstocking, and other issues that can affect your sales and reputation.
There are many aspects of managing your inventory, such as:
- Forecasting demand: You want to estimate how much inventory you need to meet the expected demand for your product. You can use tools like AMZScout or Jungle Scout to analyze the sales history and trends of similar products on Amazon. You also want to consider factors like seasonality, promotions, and competition.
- Sourcing products: You want to order products from your manufacturer in advance and in sufficient quantity. You can use tools like AMZScout or Jungle Scout to track your inventory levels and reorder points. You also want to communicate with your manufacturer regularly and confirm the quality, quantity, and delivery time of your products.
- Shipping products: You want to ship products from your manufacturer to Amazon’s warehouses or your own warehouse. You can use tools like AMZScout or Jungle Scout to calculate the shipping costs and fees. You also want to choose a reliable and cost-effective shipping method and carrier.
- Storing products: You want to store products in Amazon’s warehouses or your own warehouse. You can use tools like AMZScout or Jungle Scout to compare the storage costs and fees. You also want to follow Amazon’s guidelines and best practices for preparing and labeling your products.
Some tips for managing your inventory are:
- Plan ahead: Always plan ahead and order your products well before you run out of stock. This will help you avoid losing sales, ranking, and customers due to stockouts.
- Optimize your inventory: Always optimize your inventory and avoid overstocking or understocking your products. This will help you reduce storage costs, fees, and waste, as well as improve cash flow and profitability.
- Track your inventory: Always track your inventory and monitor your sales performance and customer feedback. This will help you adjust your inventory levels and strategies accordingly and respond to any changes or issues.
Step 6: Promote Your Products
Promoting your products is vital for selling private-label products on Amazon. A good promotion strategy can help you increase your visibility, traffic, and conversions, and boost your sales.
There are many ways to promote your products, such as:
- Amazon PPC: You can use Amazon’s pay-per-click advertising platform to create and run sponsored ads for your products. You can use tools like AMZScout or Jungle Scout to research and optimize your keywords, bids, and campaigns. You also want to monitor and measure your PPC performance and ROI.
- Amazon SEO: You can use Amazon’s search engine optimization techniques to improve your organic ranking and visibility on Amazon’s search results. You can use tools like AMZScout or Jungle Scout to optimize your listing, keywords, reviews, and images. You also want to follow Amazon’s guidelines and best practices for SEO.
- Social media: You can use social media platforms like Facebook, Instagram, Twitter, or YouTube to create and share content about your products. You can use tools like Canva or PicMonkey to create engaging posts, stories, videos, or live streams. You also want to interact with your followers and influencers and drive traffic to your listing.
- Email marketing: You can use email marketing platforms like Mailchimp or AWeber to build and grow your email list of customers and prospects. You can use tools like Canva or PicMonkey to create attractive newsletters, offers, or updates. You also want to segment your list and personalize your emails and drive traffic to your listing.
Some tips for promoting your products are:
- Test and optimize: Always test and optimize your promotion methods and channels. This will help you find out what works best for your products and audience and improve your results and ROI.
- Be consistent: Always be consistent with your promotion efforts and frequency. This will help you build awareness, trust, and loyalty among your customers and prospects.
- Be creative: Always be creative with your promotion ideas and content. This will help you stand out from the crowd, attract attention and interest, and generate buzz and word-of-mouth.
Step 7: Scale Your Business
Scaling your business is the ultimate goal of selling private-label products on Amazon. A scalable business can help you increase your sales, profits, and market share, and achieve your long-term vision.
There are many ways to scale your business, such as:
- Adding more products: You can add more products to your product line or portfolio. You can use tools like AMZScout or Jungle Scout to research and source new products that are related to your existing products or target new niches or markets.
- Expanding to new markets: You can expand to new markets or regions where your products have potential demand. You can use tools like AMZScout or Jungle Scout to analyze and compare the market data and trends of different countries or regions. You also want to consider factors like language, culture, regulations, and competition.
- Leveraging Amazon’s programs: You can leverage Amazon’s programs and services that can help you scale your business faster and easier. For example, you can use Amazon Brand Registry to protect your brand and access exclusive tools and features. You can also use Amazon Global Selling to sell your products across multiple marketplaces. You can also use Amazon Prime to offer fast and free shipping to your customers.
Some tips for scaling your business are:
- Automate and outsource: Always automate and outsource the tasks and processes that are repetitive, time-consuming, or non-core to your business. This will help you save time, money, and resources, and focus on the tasks and processes that are strategic, creative, or core to your business.
- Learn and improve: Always learn and improve from your experiences, mistakes, feedback, and data. This will help you adapt to the changing market conditions, customer needs, and competition, and enhance your products, services, and strategies.
- Invest and grow: Always invest and grow your capital, assets, and resources. This will help you develop your capabilities, capacities, and competencies, and create more value for your customers and stakeholders.
Conclusion
Selling private-label products on Amazon is a great way to start and grow your own online business. It allows you to create your own brand, control your own products, and enjoy higher profit margins.
However, it also requires a lot of planning, research, execution, and optimization. You need to follow the steps outlined in this guide and use the tools and tips recommended in this guide.