To Successfully Launch a Amazon FBA private labeling business we looked at some of the most popular coaching program / courses and distilled the most important step-by-step guide for you to reference anytime you want.
My review should answer the following important questions when embarking on selling your very first Amazon FBA private label product.
- Is Private Labeling Dead in 2020?
- Why should I private label? Pros & Cons?
- Product Ideas? How do I find my niche?
- Step-by-step process of private labeling?
- My success story / results?
- How important is packaging?
- Whats the requirements?
- Should I invest in a course or a coach? Recommendations?
- How does Amazon FBA private label compare to other online businesses?
I will also discuss why in 2020 I prefer local lead generation as my top pick for the best online business for anyone to start.
- Why Private Label?
- 7 Steps to Successfully Private Label on Amazon FBA
- Should You Invest in an Amazon FBA Private Label Course?
- What should I ask my supplier?
- Get Yourself a Logo
- Order from Alibaba
- Start Selling on Amazon
- Tips on creating a badass Amazon listing
- Product Launch
- How to utilize PPC (Pay per click campaign)
- Conversion Rate Optimization
- My Results with Amazon FBA
- Top Reasons that made me quit Amazon FBA
Why Private Label?
Private Label is different from arbitrage & wholesale in a lot of ways.
With private label, you create your OWN brand.
- you find a product that’s already selling well on Amazon (use tools like Jungle Scout)
- Find products that’s selling pretty well, but its not super competitive meaning other listings doesn’t have that much reviews, no more than 100-200 reviews on the other listings
- Once you find a good niche, take the current product that’s selling and try to make it better (read customer reviews) and/or make the listing better! (take better pictures, bundle it with another product that makes sense, create better packaging)
- Use Alibaba to find a supplier for your product
Here’s how you could improve your product over the competition.
Let’s say you pick a product like zucchini pasta maker
You come up with your own cool label brand, and then you also include a FREE zucchini pasta recipe booklet
Now put yourself in consumer’s shoe. If you’re looking at two similar zucchini pasta maker but one brand looks like they put a lot more care & attention to their packaging, has better pictures, better product descriptions and it also comes with a free recipe booklet, which one will you go with?
Make sure your product is great quality though so you gotta order some samples first from the supplier.
Private Label is little bit more complicated to get started, because you have to create barcodes, get Amazon approval, etc but it can be a great benefit in the long term because with unique branding comes the potential of building brand equity, differentiating yourself from the competition.
Private Label is the long-term play with the most upside because you can actually create a brand that has the potential of being bought out later on.
7 Steps to Successfully Private Label on Amazon FBA
Ok so to review the private label model, let me outline for you the 7 proven steps that every private labeler should practice
- Find a market / niche with lots of passion (or around pain), by seeing if communities about it exists on social media
- Find 3-5 products around that niche
- Target around 300 to 500 sales per month, any more than that could be too competitive when first starting off
- competition that have 200-300 reviews or less
- find a way to differentiate your product
- Build email launch list before you release the product (Facebook ad / Free eBook offer)
- Source product and launch on Amazon
Should You Invest in an Amazon FBA Private Label Course?
In my opinion, yes.
There’s enough variables in this business that having a mentor / coach that can guide you through the Do’s & Don’ts of this business so that you can avoid costly mistakes makes whole lot of sense.
Here’s some of my top favorite picks to learn the private label game
I would say those are the most popular course for Amazon private label out there.
Very comprehensive and got plenty of insight from it that saved me bunch of time. And time is money.
some important things I learned from these courses
- avoid products that’s heavy or big, otherwise shipping costs and Amazon fees can get pretty ridiculous
- Always calculate the ROI (Return on investment) NOT the profit margin, you can calculate ROI by looking at your budget, product wholesale bulk prices, profit margins, factor in Amazon fees. Sometimes products with less profit margin has better ROI
- No national brand in your market for example you don’t wanna go into niches where huge brands like Nike is dominating and there’s a lot of brand loyalty
- avoid seasonal products, you want products that sells all year round
- 2-3 products with less than 100 reviews on the first page
- learn to negotiate with your supplier (EVERYTHING is negotiable with Chinese suppliers) the price of your product is determined by your competition and you can’t do anything about Amazon Fees but what you have control over is your purchase price from suppliers and a good negotiation can go a long way in increasing your profits.
What should I ask my supplier?
Once you find the right product on Alibaba that you want to sell, you then want to ask few things to the supplier
- Do you have DDP and DDU Parity?
- Minimum trial order quantity?
- Can I brand the product with my own logo?
- What is the lead (manufacturing & shipping) time once I place my order?
Get Yourself a Logo
You got many options, what many coaches teach is to go to sites like fiverr.com and hire yourself a professional logo designer
You can send these guys your own hand drawings and some good directions and you’ll be surprised at how well they can design some logos for you for low costs
Order from Alibaba
200-300 units is typical a good number for your first inventory order, depending on your budget starting multiple private label businesses at the same time is really the best approach to ensure success. I’ve found that even if you do everything correctly with niche targetting and creating an awesome brand, its still not guaranteed success. Some products really struggle to get to the first page rankings and/or it just doesn’t produce as many sales as you had hoped or Junglescout has shown.
Most people use UPS to schedule the delivery from the overseas supplier, one tip is to order an amount of at least $2300 so you can avoid additional custom procedure and additional taxes.
Start Selling on Amazon
Ok time to create your Amazon seller account and start selling!
Register an Amazon seller account and create your listing!
Tips on creating a badass Amazon listing
So the most important thing about your listing is the picture and your title.
I highly recommend using Google keyword planner or this plugin called Keywords Everywhere to find keywords for your product, you want to include as many important keywords in your title as possible because that’s what the listing will rank for.
For photos we recommend hiring a professional photographer to take amazing photos of some of the samples you had ordered.
Not just getting awesome photos for the main profile area but you can add Awesome photos in the product description section, every little bit counts.
Picture is worth thousand words.
For the written content, I hired even professional writers to do some of that for me.
So your job after you launch your product listing is to get reviews.
Reviews are what moves the needle, helps to rank your product listing so that it begins showing up more organically for people when they search, and its ultimately what buyers look at to decide to purchase your product over others.
I would say this is the challenging part about Amazon FBA business period.
Since 2016, they no longer allow incentivized reviews (you used to be able to offer your product at discount in exchange for a review)
Now you have to get REAL reviews.
But its not really possible to just let your product sit there and wait for reviews, you may never get anywhere because who would buy from your product when it doesn’t have any reviews… very rare.
Some here are some of the most popular strategies on getting reviews for your listing.
- Have friends, family, next door neighbor, & everyone in between search for the product on Amazon, buy & write you a review (do not send them the link, make them search for it manually because that behavior is tracked by Amazon and helps with the ranking)
- People have used services like upwork.com or fiverr.com to hire someone for reviews, obviously you’ll pay for the cost of the product for them (again have them search manually in Amazon)
Here’s another strategy
Create a Shopify e-commerce store with wordpress. (Register a catchy domain name)
Use a plugin called Login with Amazon
This will allow visitors to your site to login to their own Amazon account on your site for fast checkout.
Pro Tip, put your products on this site but before you do that sign up for Amazon Affiliate, and place your affiliate links on your Shopify store instead.
This means on top of the profit of selling your product, you also earn 6% commission for each sale. Nice little double dip bonus,completely allowed by Amazon.
Amazon paying you commission for selling your own product! Pretty cool.
Amazon charges higher fees for MCF (Multi Channel Fulfillment) / selling outside of Amazon and also your product prices must be equal or higher to the product price on Amazon.com
You will get BANNED for trying to sell outside of Amazon at lower price so do NOT try it.
How to utilize PPC (Pay per click campaign)
After you get 5 reviews, you want to start running some PPC campaigns, if done correctly this should speed things along. More visibility on your product, more purchases = more reviews
These are the best practice for setting up PPC or sponsored product ads campaigns
- Many people use AMA Keyword Generator to find keywords related to your niche
- get like 50-100 keywords and use broad match campaigns to run it for 10+ days
- look at the report to find keywords that are converting
- put those in phrase match campaigns
- pro tip, add those phrase match keywords as negative keywords in your broad match campaign
- Then after another few days begin identifying the keywords converting best from phrase match campaign and then create exact match campaigns for those keywords (again put those keywords as negative keywords from your phrase match campaign)
- Now you want to focus on those exact match campaign, you can test by putting the bid as high as $5 per click, Amazon will try to get the click as low as possible so you won’t ever pay that much but you also want to make sure you outbid others or else your product will never show up on the first page
Do I have to run PPC forever?
Not exactly, when your product successfully ranks to page 1 for the main keywords, you can generate income with Amazon’s free organic traffic.
So these PPC campaigns are almost investment for the future.
Conversion Rate Optimization
Getting eyeballs to land on your product page is the first step
But converting them to buying customer is the next important step
higher conversion rate is the main ranking factor for Amazon
Price & number of reviews have been tested to be the biggest driving factors for higher conversions.
However you still want to pay extra attention on the following factors that increases conversion rates.
- awesome photos (the best sellers hire professional photographers)
- most important keywords in the product listing title (so it can show up in more than one important relevant search)
- hire writer on upwork or fiverr to go over your title, bullets & product description to make sure everything is top notch copy writing
My Results with Amazon FBA
By the time I got into the Amazon FBA business I had already built a stable 6 figure lead gen biz which I started thanks to this coaching program.
I was simply looking to diversify my income and got into Amazon FBA private labeling.
It took me 3 different product launches before I had my first success.
Cost me around $20K in inventory
4-5 months before I could even create the Amazon product listing because there’s so much initial setup required.
In the end, my result was this one product that’s making me around $600 per month in profit.
What surprised me was Amazon fees are a lot higher than I expected. 30-40%.
Which leads me to listing some of the reasons why I ultimately left the Amazon FBA business model
Top Reasons that made me quit Amazon FBA
- high Amazon Fees 30-40%
- much more risk & initial investment required than lead generation business, because of needing to invest in inventory & how much time it takes to deal with foreign suppliers, creating your own branding, packaging & optimizing the listing, but there’s other variables that could go wrong like the product ultimately not living up to par in quality or too much competition
- competition for this business seems to be getting increasingly more saturated at more accelerated rate than few years before
- the problems that can arise of dealing with customs, when you are operating on small margins, one little issue at customs could mean completely wiping out your profits for the month
- lack of having the ability to create a competitive edge over the competition, the whole model is based around copying other success and over taking them, but what’s preventing someone else from doing the same thing to you
- lack of control for the number 1 factor to making your product a success which are customer reviews
For me that’s the biggest issue I had with Amazon FBA business.
Even if you did the entire process 100% correctly, there still is pretty high chances that your business will not take off
So its like hit or miss.
So the ability to produce consistent success isn’t there like there is with the lead generation business.
Success with Amazon FBA is much less predictable.
Look, out of all the ecommerce business models out there from drop shipping shopify to eBay retail arbitrage, I like Amazon FBA private labeling the best because you have the opportunity to actually create a unique brand and build that brand equity over time and that brand value is what translates to long-term profitable physical product business.
The potential to one day sell that brand for pretty amazing payout is also a very attractive thing.
However, when it comes down to it I simply prefer my local lead generation online business for the following reasons
- actually being able to deal with real people, small business owners and impacting their life in a very meaningful way somehow feels a lot more fulfilling & motivating for me
- I don’t have to tie up bunch of cash every month for inventory
- much healthier profit margins
- much less competition, no signs of saturation
- more predictable results
- more passive (no need to worry about inventory)
The best thing about a lead generation business is that once our lead gen sites are set up & ranked, then you can pretty much forget about them and they keep generating income for you on autopilot
This is an example of one of the first lead generation site I ever made, its a limo site in Lansing, MI and this site has been making me $750 per month since 2014, I haven’t touched this site since then.
Small businesses aren’t going anywhere anytime soon, neither is the internet. So the need for internet marketing for these small business owners is only going to go up in time.
Because there’s so many cities in the US & world plus so many niches that you can go into.
I just believe that lead generation is a much smarter, sustainable business to get into in 2020 than Amazon FBA private label
Click here for the coaching program that taught me how to build my own lead generation business that gave me the laptop lifestyle.