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AS 5: Private Label on Amazon – Success Pointers That Every Seller Should Know

24 Jan 2016

Podcast 5: Private Label on Amazon Success Pointers That Every Seller Should Know

As always before we talk strategy your daily amazon news: Amazon founders reused rocket successful launches and lands


Now back to the podcast:

One of the major factors in my private label success was taking an existing product and making it better. I search used Alibaba and was looking for my product, but a variation of it that did not yet exist on Amazon. I find it absolutely pointless to take a product that is already on Amazon and sell it as well. Why?

  1. Have a unique product, where your take on it is not currently selling on Amazon

Because your’re not only splitting your sales with another existing seller, but your also do yourself a disfavor by not being a unique product. Being unique is the name of the game. If you can differentiate yourself from the rest of the competitors it means the difference between 1-5 sales a day and 40-50 sales per day.

  1. Your brand name is a major factor to success. I believe branding is everything. If you can brand your company after a very unique factor of your product, it will give you a leg up on your competition.
  2. Design, design design. Do not just go with the first design. Order samples of your design. I ordered 10 samples from my manufacturers that were designed by me. I then went on to make changes to my design, enhancements that make my product stick out among my competitor’s.
  3. Even after initial 1000 units. Keep improving the design. Its critical to your success. Apple doesn’t release the apple iphone and stop there. They continue to reiterate on not only the design and product. Make smoother edges on the product. Take 3 star reviews, their criticisms and implement it into your product. Your product is never FULLY finished!
  4. Don’t expand too fast. Too many products and you start to lose focus. The only time when you need to expand to more products is if your product is #1 on amazon and it is not selling. WHY GIVE UP on your initial product. Keep striving to increase your sales velocity. My top competitors sell over 200 units a day. I’m currently at 30-50 units a day and I rank over 6000 best seller rank. That is insane.
  5. Private Labeling isn’t for the faint of heart or low up front investments. Even right now, my biggest limiting factor is capital. I don’t have enough to reinvest into my business to make it grow at the speed I want. More capital, = more velocity. The scary part is, this is the first business I’ve run where, capital was a limiting factor to how fast I could grow a business. I run a web software company, a big art company, and a mens development company all of which are web platforms, that require little to no on-going capital. Private label requires a lot of ongoing and initial capital. If you don’t have at least 10k for private label, I would recommend retail arbitrage first.
  6. Make your brand name focused enough to give you an advantage, but not to focused for you to not be able to expand into the future. For example, if I was selling flashlights, my company would fill a need within Flashlights. I would probably call it, Brightest Flashlights. This would give my end consumer the belief that my focus filled their need. The want of having the brightest flashlight.
  7. I believe you must be passionate about your private label business. Do not jump into an industry where it doesn’t excite you every morning. Having that extra ounce of passion will make your business better than your competitors. It will drive you to work harder and smarter than them.
  8. Choose a private label business that has lots of room to grow. This is a vague statement. But understand that not all products sell well. Not all niches have high demand. The ones that do, are ultra-competitive. If you want to join an ultra-competitive niche where rewards can be epic, then you should be prepared to have heavy ppc, have heavy review give away, have an awesome photography and word copy, but also have lots of capital upfront to break through the initial hard times.
  9. Amazon is not a short term game. Expect 20-50% margins, 50% being really good. And even with those margins, you must put the money back into your business. Build and reinvest and reap the rewards later. Your money will compound within the business when you put it back in. 10k turns into 20k. 20k turns into 40k. 40k into 80k. 80 into 160k. 160k into 320k. 320k into 640k. 640k into 1280k, or 1.3 million. Now notice how I read out loud the compounding factors all the way to 1.3 million. From 10k to 1.3million, if you can earn 50% ROI, each time you order inventory, then the processing of manufacturing , ordering, shipping, and sending to amazon needs to occur 7x. At that point, you should theoretically have revenue of 1.3 million assuming linear trajectory of velocity parallel to the number of units your selling.

This is the current problem I’m having. I’m selling units faster than I can keep stock. My initial order was 1000 units of inventory. My second order was 3000 units of inventory and so on. My stock continues to sell fast with current demand.

These are good problems. My strategy is to continue to keep my price low, to keep my sales velocity high, and my BSR high. As I noted before, letting your BSR go down the drain is bad for business and is almost scary at times. Imagine having 3000 units in stock, and only selling 1-2 per day.. unsure that your bsr will recover. That can happen, and it does happen…Though I have been able to get it back up.

AmzSecrets.com question of the day is:
Is this a bad time to start PL?
Is this a bad time to start PL? (Chinese new year is round the corner.) Any experience with sourcing this time of the year?

No. Private labeling takes a lot of work and a lot of preparation. Everyone assumes China is the only place to source your product. It’s not. Every country manufacturers goods of some sort. You don’t need to use China. In fact, china can be more expensive and complicated with sea and air freight costs. These are things that you need to take in account with respect your product.

That’s all for now folks. I hope you liked this podcast, be sure to check Amz Secrets.com for the best answers to the toughest questions.



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