Amazon Private Labelling Guide 2021 – What an Amazon Private Label Really Looks Like
The Amazon marketplace is the most popular online retail and digital marketplace platform. Amazon had generated 280.5 billion U.S. dollars in net revenue in 2019. Its revenue in 2018 was 232.9 billion U.S. dollars and 177.9 billion U.S. dollars net revenue in 2017. Fifty percent of Amazon’s sales come from its third-party sellers.
These sellers owe their success to Amazon’s selling techniques called Amazon Private Label. The third-party sellers were responsible for 55 percent of the paid items on Amazon. Amazon gives sellers the freedom to choose which way they can sell their products, but the 3rd party selling technique is the most popular because of its benefits for their business.
Let’s get to know what an Amazon Private Label looks like:
What an Amazon Private Label really looks like and what is it?
If you plan to create a seller’s account on Amazon, you have the option to sell products through Amazon Private Label. This hassle-free selling technique allows you to sell products of your choice under your private brand on Amazon FBA. Research and find a product on Amazon that is saleable but has few reviews.
You contact the manufacturer or supplier directly, and they make the product for you, and then you label it under your brand name. The supplier/manufacturer will then ship the item to Amazon and polish the presentation by creating your brand as if you are the original creator.
The work is finished without exerting much effort but typing the info using your laptop or smartphone.
Benefits of an Amazon Private Label
Getting a head start on Amazon FBA should be on top of your list to begin a profitable business. Amazon offers many business models to new sellers, but Amazon FBA private labeling is a practical option if you want an easy way to source a product to sell.
Through Amazon private label, you don’t need to research, make feasibility studies, develop and manufacture the items.
Let’s get started on the benefits of the Amazon private label:
1) It Gives You Repeated Customers – Amazon private label branding gives you the edge over your competitors. Customers start to recognize and purchase your brand. They patronize your products as they become familiar and satisfied with the smooth flow of their purchases.
With your brand of labeling from a supplier’s product, you can update the packaging, images, logo, and colour that buyers identify with your aesthetic taste. Your business starts to gain customer’s trust and loyalty that will lead to repeated sales.
2) It Scales Your Business – Private labeling opens opportunities to scale your business and change the course of your direction to a greater height. Trying out a new range of products that nobody cares about and placing them under your brand could bring more money as customers get attracted to their presentation.
It is an opportunity for your brand to become a recognizable product after shoppers are happy with their purchase.
3) Improves Credibility & Shopper Confidence – Having your private label brand means can build your reputation and credibility in the marketplace. Maintaining a high-level standard of packaging, logo design, and the right product presentation will also establish buyer confidence.
Shoppers realize that your product is of standard quality that will lead to more sales. As a brand owner, you control how your product will look to your prospective buyers.
4) It Offers Market Stability – Many shoppers opt to buy private label items believing they are affordable, high quality, and consistent. With this consumer perception, private-label products become a stable source of revenue in the marketplace as the price is much lower than their competitors.
Suppliers give you discounts for the products you bought in bulk and sell them at affordable prices. There is no room for retailers to freeze their orders even during a pandemic.
5) Low Operating Expenses – Private label products do not rely on advertising campaigns to dispose of them; they sell themselves. Since you bought the products at a wholesale price from the manufacturer/supplier, you can cut expenses like designing, manufacturing, packaging, distribution, and fulfilment.
You don’t hire people to conceptualize and produce the product. The products sell more than the manufacturing price giving your supplier enough space to offer discounts for your private-label items. These items are mass-produced at cheaper costs. Retailers will also shop private label items at a lower price from you, while the manufacturer produces and ships more products to a single customer like you.
6) It Gives You High-Profit Margins – Running a business can be stressful because it involves a lot of work and money. A private label works differently. You choose a product and place it under your brand without spending money on manufacturing, shipping, packaging, and marketing.
It gives you high profit as you obtain the product at a low price without a premium cost for business registration, licensing, labour costs, and advertising campaigns.
7) It Gives You Peace of Mind – Amazon private label is a method of selling products where you feel safe and secure. Your main concern is how to profit from your brand and leave the work to your supplier/manufacturer.
You can stay relax while waiting for customers to love and buy your brand at an affordable price and share their shopping experience with friends who become your repeated customers.
You can also read more details on this blog: Amazon Private Label vs. Wholesale: Which Is Better?
How will I know if the private label product I am selling is restricted?
Amazon keeps changing its restrictions on its products. Get yourself updated by visiting the site often and read its guidelines. Scan the item with a scanning app to check if it is eligible to sell or not.
What shall I do to “ungate” my private-label item that falls in a restricted category?
Send a request to Amazon to “ungate” your item and answer their questions honestly. Submit a vendor invoice of your purchases for the past three months. This issue will take one to two days to resolve.
Why are some product categories gated on Amazon?
Amazon restricts products to reduce the risks of counterfeits like pirated DVDs, counterfeit food supplements, watches, or fake jewellery.
These products are on eBay, flea markets, or street markets. The restriction is to protect shoppers from buying counterfeited items in some product categories.