When it comes to selling online, Amazon is a goliath. With nearly half of all online sales going through its platform and 310 million active customer accounts, Amazon is a retailer that you can’t afford to ignore. According to eMarketer, 80% of US internet users are expected to be Amazon shoppers in 2021. That’s a massive opportunity for anyone who wants to get into ecommerce.
But, with its size comes competition. And if you’re looking for an edge, selling private label products might just be the thing you are looking for.
If you’re not familiar with private label products, they are products that are manufactured, and then sold under your company’s brand. For example, at Angora, that would look like us getting a product manufactured to our liking (Typically with some small alterations) and selling it under the brand name “Angora”.
In this post, we’ll discuss the benefits of private labeling, and how you can get started. This is an incredibly lucrative opportunity, so whether you are a brand new seller, or a seasoned pro keep reading to learn all about it.
As you’re well aware, building a brand from scratch is not easy and tends to take A LOT of time, especially if you’re starting with a brand new product. You’ll want to get your product the most amount of exposure in the quickest time possible. What we’ve found is that Amazon is the best ecommerce platform to do this. Here are a couple of reasons why building your brand on Amazon is a smart move.
First, Amazon gets more daily traffic to its site than any other platform on the internet. This is great news for you if you want to reach a broader audience or even a niche market to sell your product.
Second, because Amazon is essentially a product search engine, you have the opportunity to position your product in a way that gets more exposure than 90% of well-known brands. Much of this can come down to having great SEO however, so don’t think getting traffic is going to be a walk in the park.
All in all, building a brand on Amazon is going to be far easier in a variety of ways. Factor in that Amazon is scaling back their own product lines, and cracking down on dropshipping, and you have a recipe for success with private label.
When you sell private label products on Amazon, you are able to increase your profits. There are a few reasons for this, the biggest of which being that you control both the landed cost, and the sales cost.
If you are struggling to get a product under a certain price, you have the option to raise your price to account for that change (Not that you necessarily should).
You also have the option to run any kind of sale, promotion, etc. on your listing. This is a fantastic way to incentivize purchases, and increase sales when things may be a little slow.
Keep in mind, you also can continue to make more money as costs begin to drop with scale. As you order more and more inventory, at higher quantities, your cost per unit will drop. This gives you higher margins, and more flexibility in the long term.
Finally, selling private label products allows you to control the quality of your products and ensures that customers have a consistent experience with your brand. When you sell branded products, there’s not much you can do in regards to quality, look, etc. However, when you sell private label products, you’re in control of every aspect of the customer experience, from packaging and shipping to customer service and returns.
Another advantage of selling through PL is the ability to differentiate your brand and prevent it from being duplicated. For example, if your products are centered around kitchen goods, you could publish a digital and/or physical cookbook that provides recipe ideas that customers can use along with your product. Not only does this make your brand (and product) more valuable, but it elevates your brand in the eyes of your customers and gives them a reason to talk about it with their friends and family.
As much as we believe selling private label products on Amazon is the way to go in today’s economy, there is one thing you should understand if you’re looking to do it yourself.
It takes time.
For most entrepreneurs who start their own private-label brand from scratch, it takes a tremendous amount of time just to develop and source products from manufacturers. Typically, you could spend 6-8 months alone doing research around which supplier to work with and what product to choose. And that’s just the beginning. Between creating a marketing plan that performs in today’s competitive market and executing on that strategy, you could spend another six months before you’re ready to launch. All together, you could be looking at a year or even two before becoming profitable.
If you have the time, money, expertise, and patience to start a private-label brand on your own, it’s really not a bad path to take. However, most people don’t want to wait that long just to get started.
It ultimately comes down to what you want as an entrepreneur. If you’re looking for a more immediate path to take with less risk, then working with Angora might be the best solution. With our help, you can launch your own private-label brand in half the time, and become profitable far quicker than without. Reach out if you are interested, or would like some more information!
