Over the past few years, private labeling has become widely popular on Amazon platform selling products manufactured by another company as their own products. The truth is that setting up a private label business isn’t easy, however, many private label businesses have become best sellers on Amazon through discovering trustworthy private label manufacturers and selling profitable products. So, if you want to sell private label products, how can you find the best products at the beginning of the journey?
Then this article will help you find the answer. Let’s start by taking a look into what “Private Label” means
What Does “Private Label” Mean?
Let’s look at a simple definition from Wikipedia:
“Private label products are those manufactured by one company for sale under another company’s brand. Private-label goods are available in a wide range of industries from food to cosmetics”.
Simply put, a private label product has your brand name on it but is manufactured by someone else. By selling your own brand with fewer costs, that translates into greater profits for you!
Identify Profitable Products for Private Label
Finding items for private label on Amazon can be broken down into three factors.
Highest Demand – Low sales rank and highly-ranked keywords are the two things you need.
Narrow Down to Items That Don’t Have a Lot of Competition – Why go up against more sellers than necessary? Narrow your focus down to the items that either contain few reviews (not many people have bought them) and/or have a low listing quality.
Finish Off with This Last Checklist – Once you’ve arrived at this step, there’s just a final small check-list to go through. Look for items that are fairly light and durable (i.e. won’t break when shipped), can be used across the seasons, aren’t strongly identified with anyone or two brands, and have a price that runs between a movie ticket and pair of shoes. If you’re just starting out, I highly recommend starting with products that have the following qualities:
- Small and lightweight. Your product should be able to fit into a small, flat-rate box and weigh no more than one or two pounds. This helps you save on shipping both from the manufacturer and later, when it is fulfilled (either by you, or by Amazon FBA).
- Non-seasonal. Your product’s sales should not be season-dependent. Examples of seasonal products include: Christmas lights, Valentine’s Day gifts, winter clothing, etc. Avoid these whenever possible.
- Unregulated. Certain products like food, toys, and batteries come with “red tape” that can make selling that product difficult. You stick to stuff that’s easy to manufacture and distribute; items that don’t require a lot of legal paperwork and/or certifications.
- Uncomplicated. Electronics can be fun to sell, but they often come with a lot of headaches and customer service issues. The same is true for fashion and clothing products, which may require you to have multiple colors and sizes for a single SKU.
Right Formula to Find Private Label Products
Finding the products that’ll get you the most profit under a private label is a three-step process.
- Research the Right Product
Once you’ve found a few cool products you’d be interested in selling as private label products, you’ll need to do a little market research to determine whether or not it’s worth selling. A straightforward way to get specific, accurate demand and competition data is to use a tool built for that purpose, that is Jungle Scout’s Chrome Extension (professional, but not cheap)
Here’s how it works:
- Perform a search on Amazon.com using your product idea as a search term. For example, I’m going to look up “copper measuring cups.”
- After the search results page loads, click the “JS” button to the right of your browser search/address bar to open the Jungle Scout Chrome Extension (you will need to have purchased and downloaded the extension for it to work).
- Verify the product’s data. The Chrome Extension will show you the average monthly sales, average reviews per product, and more for the search’s results.
- Figure Out if It Has a Ready Home
In this step, take a look at how much competition that item has, how in-demand it is, how much profit it’ll bring in (revenue vs. cost), and if it’s affordable/light/durable/non-seasonal.
- Confirm Your Earlier Work
If you approach this part like a science experiment in that the first two steps were your hypothesis and this part is where you set out to prove it (or prove another theory by incidentally finding new products for private label).
This is also the time where you’ll be crunching serious numbers, so don’t skimp on any work. If you’re not the numbers-and-figures type of person, find someone who is.
The end goal should be to come up with detailed sales estimates that are as accurate as possible, but ones that also identify in advance what the potential improvements can/could/should be (before they happen or before someone else, like a buyer with a negative review, points them out for you).
Selling private label on Amazon is a fantastic way to build an online business fast. You need some startup funds and a willingness to work hard, but if you can bring those to the table, you can become your own boss and make serious money. Hopefully, this post will help you to have some ideas of how to find profitable products to sell as private label.
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