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9 Best Tips for Amazon Private Label Business

Private labeling has been a viable way for sellers to start off on the Amazon platform. Given its profitability and seller’s ranking, private labeling sellers are more likely to gain the Amazon Buy Box and other privileges on the increasingly competitive e-commerce marketplace. It is the best way to distinguish your business from others. When you start your private label business, you create your business identity, which will drive your business in return.

Simply, private label products are items manufactured by contracted or third-party manufacturers but sold under a retailer’s brand name.  It means that you put your logo and brand on a generic product to differentiate it from the other competitors and retailers.  As such, you will have full control over your brand business. This should be your market identity that enables to turn an initial buyer to a loyalty buyer and create repeat sales. You can control your market position and product price on the market. Ultimately, you can control the profitability of your business. On the customer side, your private label offers greater value. As we know, customers may make a purchasing decision based on their past shopping experience. This should be a great way for you to brand your products.

On Amazon, you will find 50% of all sellers are involved in private labeling. It seems that private labeling should be a long-term business strategy to help you trump over other similar competitors sell the generic items. Is there any tip for private label sellers to stay competitive on the Amazon marketplace? You are at the right place. We will explain this question in detail, and hope it will be helpful for your Amazon business.

1. Identify a High-profit Margin Product

When you are planning a private label business, you must a product in mind that you want to sell. That’s good. But it will be hard for you to gain great profit if you never take the market research into account. The research of the item market should tell you the truth about what the customer needs and what the market demands, the possible profit margin of the item, the customer’s ideal products, etc. If you find the price of your competitor is relatively low, it will leave you little profit. Give up the item, and start to research to find the high profit margin product to start off. Remember to focus on high margin item when you want to involve a private labeling business.

If you want to sell on Amazon, you can take advantage of Amazon Best Seller to get to know the trendiest item on the platform. Scroll down and find your item that is less competitive but has a high profit. This should be the best option. You are allowed to stay competitive on the market with a possible lower price. A higher profit margin will leave you more room to tweak product price for future competition.  Besides, you can also go Google Trend to check the product popularity. Usually, remember to choose a product that will give you a profit margin of 30% to 40% or higher. The chosen item should be small and light, immune to seasonality. Calculate the possible profit before making your final decision. After that, you have to think of manufacturing the item and sourcing the item. You can outsource the item from China and sell it on Amazon or other platforms. Generally, the less competitive the category, the more you will make within it given a higher charge from you.

2. Distinguish Your Brand with Distinct Identity

The best practice of private label brand should develop a distinctive and highly recognizable visual identity and keep a consistent messaging strategy, images, and differentiated product categories to carry your brand value. Private label brand sellers should pay attention to it to build your brand with words, images, and advertisement, etc. This is how you can build your business identity on the market.

Amazon private label sellers are well positioned to bring something truly differentiated to the product category. You can distinguish yourself by practicing a totally different categorizing among millions of competitors. Bringing differentiation to the market is a great way to meet possible customers’ needs. You can utilize this method to market your business. Building an attractive brand identity with a different category, images or messaging, remember to apply it to all your marketing mix for more sales.  You can use consistent images such as a logo, the font, and size of your label, color, and tagline, to reinforce your brand impressions on audiences to shape your private brand.

3. Use High-quality Images

Product images should be one of the most important factors affecting the click-through rate of your product. Product photos demonstrate the product from different angles, features, and functions, etc. They are what customer see before they make their final purchasing decision.  As such, the images of the product should carry lots of importance to customers’ buying decision.

Normally, poor images will definitely leave a bad image to possible shoppers.  They may reflect on the quality of your business. Your sales will finally suffer. Taking advantage of the great importance of product image, you’d better use a high-quality image and upload on the platform. Follow the basic guidelines on Amazon; your products will be preferred due to the high-resolution images. Take a good control over the image light, angles, graphics and picture style to present your item. You can analyze your competitors’ images to better your image. Make sure all your product photos are appropriate. They can fully display all the benefits your product has. Include all the advantage in your pictures and demonstrate the best of it.

4. Optimize SEO

Amazon SEO is a great way that affecting your rankings and sales. It’s should be done after rolling out your product listings.  Normally, optimizing SEO should include optimizing keywords, product titles, product descriptions, and features, etc. To make more sales, this is a must for common sellers to stay competitive on the market.

To optimize your product listings, you should create a keyword strategy for the great Amazon algorithm. You can refer to the keywords of your competitors, research relevant keywords on keyword tools, narrow down on Amazon platform, and use negative keywords. Make sure to incorporate your keywords into your product title, descriptions, and features, etc. On the product description part, you can tell a moving story and end it up with a strong call to action to attract shoppers.

If you still don’t know how to make it, you can go and check product listings of your competitors and their customer reviews. You will know the shortcomings of their products. You may add it into your bullet point part to turn them into the benefits of your product. Utilize all possible techniques to increase the product listing rankings, and boost your sales.

5. Adopt Repricing Strategy

Given the highly dynamic of the Amazon market, it’s high time for you to adopt a repricing strategy to consistently cope with the increasingly competitive market. As we know, the price should be one of the most important factors for a higher conversion rate and sales.

Currently, there are three kinds of repricing tools on the market: manual repricing, rule-based repricing, and algorithmic repricing. Manual repricing is simply for small business that sellers sell a small amount of inventory. Sellers have to reprice their products by themselves. Rule-based repricing is for sellers to set up their repricing rules. And the algorithmic repricing mainly refers to the repricing applications integrated with different features of possible market factors including the shipping, inventory, and cost, etc.  Choose the right repricing tool to price your item flexibly to stay competitive on the market. The best strategy for repricing is to maximize sales profit by offering a competitive price and bringing more sales. Make sure your prices are competitive enough, keeping it lower than the competitor or beat the price of the competitor.  Evaluate your sales history, and forecast the possible sales hit to adjust your price strategically.

6. Adopt Bundling Selling

Bundling selling is another promotion to increase your sales. For instance, you are want to release a new item, and want to give it a promotion. You can create a special bundling with some of the best sellers in your shop. You create customized bundling for different customers’ needs. Take advantage of the unique features and benefits of two or more different products; this is a new way to promote your sales. It seems that you create a new product that nobody is selling it on Amazon.

Bundling selling is to sell the bundles that packaged a set of the related individual item in a certain way. Customers will gain all the possible value from these bundles. For private label seller, this is an excellent way for them to stand out from the competition and won a higher sale. For instance, you can bundle your barbeque gloves with meat claws together to create a best seller. To get more idea on the Amazon product bundle, you can see what consumers are already buying when they purchase your item. You will be easily come up with a new bundle and refine your production line. Given the unique ASIN of your bundles, it will be easy for you to hit the market and gain more sales.

7. Choose the Right Order Fulfillment Method

If you are considering a private label business while outsourcing from China, you have to take your order fulfillment into account. As we know, different order fulfillment will cost differently. You outsource your item from China, and want it to be sold on Amazon. Generally, there are three ways to fulfill your order. First and foremost, you can utilize the fulfillment by Amazon (Amazon FBA).  Sellers have to ship their outsourced item to the Amazon warehouse where your order will be packed and shipped to customers. The Amazon warehouse workers will help you fulfill your order. They will take over the packaging and shipping tasks. If you want to have your item sourced from China, you can partner with Leelinesourcing. It will help you adopt one-stop sourcing, and help you FBA shipping. Besides, you can start a drop shipping business. Your product supplier will fulfill your order and send the item to the customer straight away. In addition, you can fulfill the order by yourself. You will enjoy full control to handle your products. You have to manage everything from warehousing, packaging, to shipping the products.

8. Take Care of Packaging and Labeling

Packaging and labeling should be a significant part of private label sellers. You have to take care of the labeling and check if it is well packaged and labeled as agreed contract or not. Be prudent to the product packing and labeling. If you have enough time and energy, you can complete it by yourself. Or you can entrust a third-party company to package and label your item.

When it comes to your labeling, remember to make everything right for your brand name and logo. You should pay special attention to it. For the packaging, make sure your products are packaged with the right box.

9. Keep Up with the Changing Customer Demand

Customer demand should be the key factor you have to follow. As we know, customer demand will change over time due to a change in their taste or season.  If you are selling seasonal products, remember to keep track of historical sales records, and contact info of all customers. Given the changing temperature, you are allowed to communicate with them about their expectations or their customized requirements for the future. These are great ways to boost your sales with your special post-sales communications.

Besides, you also have to track the monthly sales over a span of multiple years to check the changes in demand throughout the year. These historical records will tell you. Capitalize on them, analyze them in detail, and find the regulation of the market. Find the sales hit and get to know the reason. This will be a great way to plan for possible changes in the demand in the market to manage your inventory appropriately.

Hopefully, you will find this post will be helpful for your private label business. If you run into a dilemma on Amazon, you can practice one or more tips above to get everything on the right track. Hope you can avoid all possible mistakes and skip to the success straight away to make a huge profit.

About the author

Sharline is the founder of LeelineSourcing.com. With 10 years of experience sourcing in China, She loves to share knowledge and ideas in sourcing bussiness.She writes only the truths which others are normally not willing to tell. This makes her posts distinguishable from other import & export articles.

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