One of the best ways to gain profit from an online business is by selling private label products on Amazon. So what actually is private label? You must have noticed that there are a plethora of generic products sold online, which obviously faces a huge competition. By creating a private label or brand, products are identified and compartmentalized. Private labels give you the advantage of enhancing the value of your products through visual differentiation through logos and brands. This gives you a competitive advantage in the global markets.
Understanding the Concept of Private Labels
Brands that are legally owned by suppliers or retailers are basically known as private label products. These products are not manufactured by the suppliers or retailers but they own the brand or label. The manufacturers benefit by receiving a share of the revenue when the products are sold online.
There are a few simple and effective techniques to private label your products. With the constant boom in ecommerce, millions of products are sold online these days. There is no better channel than Amazon, which serves as the biggest online retailer store, to sell your products.
Amazon Private Label and How to Create It?
There are many steps involved in private labeling your products on Amazon. Although building a brand and labeling your products prove to be profitable, it takes some time to yield results. You cannot expect to become a millionaire overnight with this strategy. It takes diligence, patience and a good level of determination to watch your idea become a reality.
1.Choosing a product or product niche
This is perhaps the most important step involved in this process. Before you create a Amazon private label, you need to choose a generic product from the list of best selling products on Amazon, which is also referred to as Amazon product sourcing. Even though there are more than thousands of products on Amazon, it is wise to choose products that are on the high ranking list and generic. Top brand driven products such as Nike and Motorola are protected and it can seldom be private labeled. So it is important to choose simple products such as water bottles, plastic products, bake ware and so forth. Once you zero in on the specific type of product, it is time to pursue the next step.
2. Conduct market research
The product you choose to Amazon private label must have the potential to create demand repeatedly. It must also be exclusive, light weight and small in size. There must be a perfect balance of competition and demand in your product. This will ensure that there will be quite a large number of buyers for your product with a healthy competition.
3. Identify the level of competition
If you have honed on a simple product such as an insulated lunch box, check the top 100 rankings of the best brands that sell these products on Amazon. This gives you a bigger picture of competitive arena. The first five listings will give you a clear picture of the price, reviews, best selling ranks on Amazon and so forth. This information will serves as a measuring tool to determine whether the product is worthy of investment.
4. Find a suitable supplier
Now it is time to find a suitable supplier for your product. If you want a cost-effective solution, you need to choose a supplier from China. In fact, most of the merchandise in the world is import from China. Through a experienced China sourcing agent or a China import agent, you can identify the best private label manufacturers that are willing to print your own logo in their products. How to find a sourcing agent in China is also a important subject for Amazon sellers since having a good supplier is very essential key from the supply chain management's perspective. This process is also referred to as original equipment manufacturing service(OEM service). For instance, in the industry of consumer electronics, electronic manufacturing services is a form of private labeling. though it might incur importing charges, you can still save a lot of money in the price of the product. One of the most popular sites is Alibaba for B2B transactions.
5. Product package design and logo
Another aspect which you need to focus on is the logo and the packaging of the product. You can compare the packaging and logo of your competitors and find viable ways to create a distinction in your Amazon private label. This is one of the best ways to set your private label apart from your competitors.
6. Amazon brand registry and private hosting
To grant more control to the sellers on their private brands and labels, Amazon has introduced the Brand Registry program. This program prohibits other sellers from imitating the logo, description and pictures of your private label. When you host your products with Amazon private label, it creates a strong brand perception among prospective buyers.
7. Fulfillment by Amazon or the FBA
Private label sellers can also benefit from FBA as it includes a wide range of benefits for these sellers. With FBA, you no longer need to pack and ship the products which can be quite a hassle. Moreover, now you are also eligible for shipping through prime. Prime shipping is also known to boost Amazon private label sales.
Why Choose China For Amazon Private Label Products?
Even though private labeling was not originated in China, the Chinese manufacturers have certainly widened the list of products that can be availed for private labeling. Majority of these private label manufacturers allow their products to be private labeled. In China, most of the products are made to order. This means that all the products are manufactured according to the specific requirements of the buyers.
China is the foremost international player with exports worth 2.1 trillion USD. It is basically an industrial powerhouse that manufactures all types of products at cheap rates. There are millions of factories in China that work relentlessly to supply products to different parts of the world. Most of these factories are willing to manufacture and supply products in minimum quantities too.
How to Choose Private Label Manufacturer in China?
China is rightly known as the largest manufacturing country in the world as it has the expertise and manpower to make any product imaginable. Moreover, it is done at a cheaper rate in China than any other country. Sourcing products from China however is not a very trivial thing. Sourcing products from China to sell on Amazon is even more so. With more than hundreds and thousands of manufacturers in China, how do you choose a reliable private label manufacturer?
There are many ways to choose a high quality manufacturer in China that meets both the quantity and quality of your production requisites.
Background checks
Before you make a decision on choosing a manufacturer, it is a good idea to conduct a thorough background check. There are companies that give you an overview of the several manufacturers in China.
US customers
It is a fact that only those companies which are capable of producing high quality products export to USA. So you can choose such manufacturers for your products. Make sure you choose to work with a good China freight forwarder that knows the detailed requirement for shipping from China to US and importing from China to US.
Multiple samples
When you order for multiple samples, it gives you a better chance to check the quality of the products that these companies manufacture. You can order 10-50 samples depending on the cost of the products. There are companies that take up such orders and you can even negotiate with the prices.
Choice based on price
Businesses all over the world outsource to China due to low cost of production. But never make the mistake of choosing a manufacturer solely due to the low price. If the factory is offering the lowest price for the product, you are heading straight for disaster as the quality will surely be compromised. Low price indicates the use of low quality materials or any other hidden charges.
Product expert
Before seeking a supplier, you need to know your product like an expert. You should know relevant details such as product specs, type of raw materials used, manufacturing processes etc like the back of your hand. In this way you can easily identify manufacturers who are capable of meeting your specific requisites.
Conclusion
Products with Amazon Private Label Products have the potential to recreate demand throughout the year. These labels undeniably go a long way to make a difference to generic products online. There is no perfect product online that will make you rich overnight. But by using the right type of tools, no doubt you can convert your private labeling business into a successful career.