One of the most surefire ways to succeed as an online entrepreneur is creating a brand, and private labeling allows online sellers to do that. Private labeling is where a retailer contracts a manufacturer to manufacture and brand the products on his (retailer’s) behalf. The manufacturer does not own any rights to the label or brand and only gets revenue from manufacturing the products. Private label has gained a lot of attention, especially with Amazon sellers as a way to make products stand out and create a brand. Private labeled products can create a recurring demand if they are high-quality because your customers will associate your brand with high-quality items. If you want to source private label Amazons product from China, here are the things that you should look out for.
As a private label Amazon seller, the very first step in starting your private label business is choosing a viable product to sell. Sourcing products from China can be a tricky affair since the Chinese manufacturing sector is plagued with low-quality products. You will need to do a lot of market research to identify a good, high-quality product in your niche that you can use for your private label. Smaller products tend to do well with private labeling due to lower shipping costs and lower handling costs from Amazon. Products with a high appeal as gifts also tend to do well in the private label business model. You should avoid large and complex products since the shipping rates for large products are generally high, and complex products tend to get more returns. Fragile goods are also unsuitable for private labeling since they can get damaged during shipping and generate returns. Too many complaints and returns can hurt your brand, and it is one of the reasons why Amazon bans sellers from its platform.
Legal battles can tank your private label business even before it takes off, shattering your dreams of becoming an Amazon seller. It is essential to make sure that your product meets all the legal requirements before you start shipping to Amazon. One of the most common legal issues that you are likely to encounter is a copyright infringement. When doing your product research, you might find a product that is already doing well and decide to copy that product’s concept. Copying another product’s idea might bring you legal troubles especially if you copy from the big brand names. Your products might also get flagged as counterfeit products which can, in turn, result in your Amazon seller account getting banned.
Amazon is very strict with the kind of products that they allow on their site. It would, therefore, be in your best interests to make sure that the product that you ship from China meets the required quality standards. Selling substandard products can also hurt your brand and kill your private label business before it even gains traction. The best way to assess the quality of your product is by ordering a few samples from your supplier. Order the product before and after it is labeled to ensure that the quality does not get compromised when labeling. Use the product for some time to determine its durability and the rate at which it wears and tears. Once you are satisfied that the product quality is top notch, you can then start shipping them to Amazon and start selling.
Finding a supplier
Your private label business will not get off the ground without a good supplier. The two most significant determinants to your success in the private label business model are your choice of product and your choice of supplier. Your supplier is the one who will be doing most of the heavy lifting for you like manufacturing, labeling, packaging, and shipping to Amazon. You will only handle the sales end of your business. It is imperative that you get a reliable supplier who can scale their production to match your growing sales volume. You do not want to settle on a supplier and later find out that they cannot satisfy your sales demands.
Another essential thing to look for in a supplier is their pricing model. You want to look for a supplier who is flexible in their pricing especially on large orders. Finding a supplier with friendly prices will keep your costs low and increase your profit margins. Your supplier should also understand that your agreement with them is exclusive and that they should not offer your product to other companies.
Shipping and handling
When sourcing products from China, you have to factor in the long shipping times. Most Amazon customers are used to fast delivery so you will have to figure out a way to meet their expectations. Shipping from a supplier in China directly to the customer is out of the question because delivery would take weeks. The only option that you have is using the Amazon FBA program. Amazon FBA (fulfilled by Amazon) allows sellers to ship their products to Amazon warehouses for storage. Amazon then handles the picking, packaging, shipping, and provides customer support on behalf of the seller. Learning how to use Amazon FBA for your private label can have a drastic positive impact on your business and brand due to the fast shipping times and excellent customer support that Amazon provides. Amazon has several fulfillment centers making it easier to achieve fast delivery times. Quick deliveries are perfect for your brand because once customers associate your products with fast delivery times, they will always keep coming back.
The benefits of Amazon FBA do, however, come at a price. Amazon charges Amazon FBA sellers a fulfillment fee for every unit they pack and ship. They also charge a monthly inventory storage fee on units in storage based on the cubic foot they occupy. Fulfillment fees vary from $2.41 to $137.32 depending on the unit size. Monthly inventory fees are generally low between January and September but go up from October to December. With these charges in mind, you would need to adjust your pricing to ensure that they do not hurt your profit margins. It is, however, essential to keep the price in your competitors range so that you can attract customers to your product.
Amazon has provided a fantastic platform with amazing services to enable you to start your own business and build a brand online. In theory, private labeling seems like an easy thing, but it is a lot harder in reality. It is, however, manageable for sellers who follow the due process and observe the critical things that we have mentioned. Private labeling should not be treated as a shortcut to success, but instead, it should be nurtured just like any other business. For more insight on how to be a successful Amazon private label seller, you can read this step by step manual to building a private label empire.