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Private label Amazon FBA

1,965 Views | 15 Replies | Last: 5 yr ago by corndog04
JobSecurity
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I've searched but only found a couple old relevant threads.

Does anyone sell private label on Amazon? I'm about to start and would love a successful Aggie mentor. I'm confident I've picked products I can differentiate and have learned some great digital marketing techniques but haven't sourced my first product yet. I've spent a ton of time researching how to do this the right way and am looking at it as a long term plan and not a get rich quick scheme. My ultimate goal is to take as few profits as possible from the business and position for a sale in 2-2.5 years.

Any success or horror stories are welcomed! Maybe I'm being incredibly naive but I'm convinced this is an amazing opportunity and that I can be successful.
aggiecive
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I looked pretty hard at doing this about 2years ago with a friend. After a few months of analysis our conclusion was that we were a few years too late to be successful and the only way to make any money at it was to create a website or other media to describe how to do it...We couldn't find a unique enough product we could afford to get shipped here with enough margin left but if you've found it congrats!
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MrsFlyingSquirrel95 said:

I'm not familiar with this precise scheme, but 2 years isn't exactly long-term and it takes that long for many businesses to turn a profit at all.


Yeah reading that back it sounds a bit contradictory. Amazon has a system they call FBA - fulfillment by Amazon. The basic premise is you can send your inventory to their warehouse and they handle all the fulfillment, shipping, returns etc for a fairly reasonable fee, and these products are displayed as prime eligible on Amazon. So it enables you to scale very quickly by not having to physically handle your products. The work is in picking, sourcing, marketing, and optimizing products.

There are a lot of stories of very successful private label sellers doing $1M+ revenue within 2 years and selling to larger brands or others who are looking to invest in e-commerce. Granted that is an extreme and I'm not thinking I could reach that level of success.
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corndog04
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I started selling on Amazon late last year. I have one product that I sell with a few variations and it is doing pretty well at the moment. I'll be adding a few other products soon. My current product isn't really PL, but I'll be adding a few things that are to try to capture some sales based on the "frequently bought together" items that Amazon shows for my product.

PL market has gotten pretty saturated, but there is still opportunity in certain niches. The biggest problem is that anything that has a lot of success and isn't IP protected is going to get saturated quickly. A lot of chinese factories have realized now they can just sell directly on Amazon under their own brand and you won't be able to compete with them on price. This makes product selection pretty tough.

For my current product, I stumbled upon a pretty unique but not terribly complex competitor idea last summer. They had no other direct competitors, it was a product with obviously high margins, and had a best seller rank and review history good enough to show they were doing decent sales. They also had a patent on a particular feature of the product, but it wasn't something I wound up needing to incorporate in my version. Today I get three different components made at three different factories and have it all shipped to my house for final assembly. I'm looking to get one of the factories to provide a more turn-key service as its starting to get to be a hassle to assembly hundreds of these a month myself.

Overall, it's been a fun experience and while I'm not getting rich it is making for a nice side gig. I'd be happy to answer any questions you have.
JobSecurity
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That's amazing! Sounds like you found a great opportunity.

Did you run a giveaway to launch or are your sales all organic? Are you doing a lot of PPC or pushing outside traffic?
corndog04
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foleyt said:

That's amazing! Sounds like you found a great opportunity.

Did you run a giveaway to launch or are your sales all organic? Are you doing a lot of PPC or pushing outside traffic?


If I had to do it all over again I would have sold at break-even and ran PPC from the start, so actually running at a loss after advertising. I started off just trying to grow purely organically, but it wasn't doing anything. For my first four months I sold per month what I do per day now. After that I undercut my competitor by a couple of bucks, signed up for the early reviewer program, and started pushing PPC hard. I've slowly been working my prices up to the point now where I'm more expensive than he is and still get better volume. I'm slowly ramping PPC down, but will need to keep it going at some level as my product isn't necessarily something people are deliberately searching for rather than something they stumble upon.

In May my sales were about 50/50 ppc vs organic. June is looking quite a bit better.
jaggiemaggie
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Was doing some Retail Abitrage in 2016 to test the water and learn more of the FBA process. I wasn't going to retail stores walking around trying to find stuff to sell. It was mostly finding something online that I wanted and just happen to be on clearance and so I'd buy multiple to flip. I was also buying samples from Alibaba trying to find out what to PL but then I lost my job so auxiliary expenses had to stop. The toughest part was the language barrier and some of the samples I ordered just didn't come out right and those $75 here and $100 for samples can add up pretty quickly

The market is definitely saturated and like 04 said, it's getting harder because the Chinese are selling directly to amazon. A lot of these so called experts aren't making their money on products but on the courses that people buy (me included) thinking they can quit their job by selling garlic presses on Amazon
Ulrich
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corndog04 said:

Today I get three different components made at three different factories and have it all shipped to my house for final assembly.

I think I figured out what you're selling.

Component 1: stick
Component 2: cornmeal
Component 3: hot dog
Goose06
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aggiecive said:

I looked pretty hard at doing this about 2years ago with a friend. After a few months of analysis our conclusion was that we were a few years too late to be successful and the only way to make any money at it was to create a website or other media to describe how to do it...We couldn't find a unique enough product we could afford to get shipped here with enough margin left but if you've found it congrats!


Either you are my buddy's sock or you and your buddy did the exact same thing at the same time with the same conclusion as me and a friend of mine. We spent a few months researching this, listening to podcasts, reading websites and were convinced it was a great opportunity. I think it was in the fall/winter of 2015 going into 2016. Ultimately we got down to picking a product and we just couldn't find one we were super confident in. So we ultimately threw in the towel without ever really testing the waters.
Diggity
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you were close...it's actually.

Component 1: Pizza
Component 2: Cup
Component 3: Spoon

bmks270
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If you have a good product and marketing, it will work. But if you aren't inventing it, and are just doing private label and not making any improvements, you'll need a marketing edge because of the low barrier to entry.

Or, you need to already have a big following, then you can make a private label brain or muscle supplement and sell it to your followers.
AggieT12
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Been looking into this for the past year. Feel pretty confident understanding the process and wanting to give it a shot before opportunity is gone. Currently tracking a few products and dealing with manufacturers now to launch a first product.
JobSecurity
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Awesome, good luck. Got my LLC set up, EIN, bank accounts and whatnot this week. I've been putting together a spec sheet and will be starting to contact suppliers later this week. I'll keep bumping this thread every couple weeks with updates as I move along. You should post updates too!
khkman22
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Just curious the types of items y'all are looking at and what you're actually doing? Is one example basically just buying shirts from a (likely) Chinese supplier and putting your own logo on it?

I'm not interested in doing anything, just curious about the people that say they are doing it/have thought about it. Seems like a lot of risk and barriers to entry to make it worthwhile. Again, depending on what items you are selling.
corndog04
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khkman22 said:

Seems like a lot of risk and barriers to entry to make it worthwhile. Again, depending on what items you are selling.


I think it is the exact opposite that makes it attractive to a lot of people (and ultimately leads to complete saturation of the market). Assuming you are okay with selling a physical product, I can't imagine lower barrier to entry. You don't need a brick & mortar store or your own e-commerce platform. Setting up an Amazon seller account takes all of about 30 minutes. If you have a decent camera you can get a listing going with another hour or two a work. After that, you have way more potential exposure from day 1 than you could ever dream about from a physical retail location or any other e-commerce platform. There are a lot of products, particularly when sourcing internationally, where a couple of grand gets you a bulk order of stuff you can sell for 30-50% margin.

Downsides are that Amazon always has you by the balls, you are at an immediate disadvantage if you play by the rules regarding incentivized reviews, depending on your product it is only a matter of time before it gets saturated if it isn't so already, it can be hard to scale, etc. It's far from risk free, but it doesn't take much to test the waters.
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