Do you want to start an Amazon FBA business but don’t have a product of your own? If YES, here is how to sell private label products on Amazon in 10 easy steps.

Selling private label products is one of the popular ways to make money online. Even though some people may claim that selling private label products on amazon is saturated, and as such new comers will not be able to succeed in the business, but this is not true.

Amazon is one of the biggest online selling platforms in the world today and it is still growing at an incredible rate. So, even though there are more and more private label sellers, the opportunity rate increases thus leaving enough room for beginners to earn their place.

Private labeling simply means sourcing for a generic product from a producer and then selling it under your own brand. Building a brand identity has the ability to drastically increase the success of your business. A unique brand will be preferred by customers and as such will make more sales and ultimately get more profit.

You should bear in mind that selling private label products on Amazon is not a get rich quick scheme. It takes time and commitment, but when done right it can be quite profitable. Here are some steps you can follow in order to sell your private label products on Amazon.

How to Sell Private Label Products on Amazon in 10 Easy Steps

1. Set up an account: the very first step towards actualizing your dreams of selling private label products on amazon is to first set up your account. There are two account options at your disposal which are;

  • Amazon Individual Seller Account: using this type of account is free of charge in the sense that there is no monthly payment attached to it. However, you will have to pay $0.99 per sale in addition to 15%. Also, this account type limits the kind of products you can sell in the sense that you can’t sell items that are already listed on Amazon.
  • Amazon Professional Seller Account: this type of account attracts a monthly payment of $39.99. With an Amazon professional seller account you can sell your own branded products.

You can start with an individual sell account until your products get to the amazon warehouse. It will save you the cost that you would have incurred for the period that you were not active. However, when you start selling your items, you should then upgrade your account to a professional seller account. Also, you’ll need to run PPC campaigns and use Amazon’s marketing platform and you can’t do that as an individual seller.

2. Get an employee identification number (EIN): an EIN is a tax identification number that is issued by the government of the united states of America. In order to get an EIN, you will have to be at least 18 years of age. You can easily get an EIN from the website of the IRS within a few minutes.

If you are a not from the US and want to import in the United States, you will have to get an EIN for foreign importers.

3. Bank account: According to Amazon policy, you must provide a U.S. checking account or a bank account located in the U.K. or any country in the Eurozone (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain), Australia, New Zealand, India, Hong Kong or Canada. However, if you don’t live in the United States or any of the aforementioned countries, then you will have to open a US bank account.

4. LLC and Insurance

Even though this is not compulsory, it will be in your best interest to protect your investment.

According to Investopedia, a Limited Liability Company (LLC) is a corporate structure whereby the members of the company cannot be held personally liable for the company’s debts or liabilities. Limited liability companies are essentially hybrid entities that combine the characteristics of a corporation and a partnership or sole proprietorship.

While the limited liability feature is similar to that of a corporation, the availability of flow-through taxation to the members of an LLC is a feature of partnerships.

Getting an LLC makes your business a legal entity. If you have the know-how, you can do it yourself, or you can pay for it to be done for you. If you reside outside the United States, you need to go over the legal aspects implemented in your country.

Having an insurance can keep you safe if something goes wrong. It doesn’t happen too often for sellers to be sued by customers, but it does happen sometimes. The cost of an insurance policy depends on the quantity you’re selling and the products’ value.

5. Create a logo

Because you are selling private label products, you will need to create the image for your brand. You can design the logo yourself with the aid of software like Canva or with a program like Illustrator or Indesign if you are skilled enough and have the time to spare.

You can also outsource the creation of your logo to professionals both online on websites like Fiverr, 99design, or UpWork as well as offline.

6. Find the products to sell: when you have completed the process of setting up your account, the next step will then have to be determining the right items to sell.

Determining the right products to sell for maximum profitability can be quite complicated and time consuming. You can make use of tools like Jungle Scout to get to know about the monthly sales and the competition of a product, which saves you lots of time and will get you specific data to work with. This totally takes the guess work out of finding the right items to sell because your decisions will be backed by facts.

You should have a clear picture of the amount of money you will like to make, then make some calculations about how much the items will cost you and how much you can add to it for your sale price. You’ll have this in mind when conducting the product research. See what price your competitors are selling the product at and the price you can buy it from a supplier.

Tips: Stay away from restricted categories if you can because they are more difficult to get approval for as you are required to get additional statements from suppliers. These restricted categories include, (some products like creams, oils and such), groceries, food, sexual health, baby products (except apparel), fine art, jewelry, watches et al. You can check the amazon website to get a complete list of items that come under the restricted category.

7. Find the suppliers: finding a supplier doesn’t have to be a difficult task. In fact, you can seal the deal via email without having to meet them or speak to them.

To find a supplier, you can go to Alibaba or any other website of your choice, find various suppliers of the product you will like to purchase and then ask them for a quotation. When writing to them, endeavor to include what product you want, where the package is to be shipped, how many items, and what kind of shipping. You should also enquire if they allow private labeling.

Make sure that you only go for suppliers who are tested and trusted with a least 2 year’s experience and trade insurance. Also, keep an eye on the payment methods and choose suppliers who enable payments via PayPal as it keeps you safe in case of a rip-off.

You need to choose the shipping method, which can be by air or by sea. Air shipping is faster, but it incurs higher costs. Shipping by sea on the other hand cost less but the delivery time can take up to 3 months, and you have to take care of customs, taxes, duties, and a lot of paperwork is required.

If you use air shipping and door to door delivery, your order will go directly to Amazons warehouse without any hassle. The price range differs depending on the quantity you buy, the dimensions of the package and its weight. The best approach is to ask for different quotes for the shipping so you can choose the best price.

8. Create listings:

  • Universal Product Code (UPC): this is the 12 digital bar code you see on products. For you to create a list, Amazon will require the UPC code of the product. The UPC is only needed when you are creating a list and you only need one UPC code per product.

For instance, if you have about 200 unites of a particular product, you will not need 200 UPC’s because one is sufficient. If you have more variations of a product, then you’ll need one UPC code for each variation.

Due to the fact that you are selling private label products, a supplier cannot provide you with a UPC. The only way to get it will be to buy it yourself. You can buy the UPC directly from GS1 at $250 with a $50 yearly fee to keep the barcode under your brand.

Because GS1 barcodes are quite pricey, you can also buy registered GS1 barcodes from NationWide Barcode for $10/each. However, be careful with buying from somewhere outside GS1 because it can get you into trouble with Amazon. Many sellers use UPC from NationWide with no problem, but keep in mind that it’s at your own risk.

  • Images: in order to create a product listing, you will have to include a picture of the item. The picture you provide must be of high quality else, the Amazon zoom-in feature will not work properly.

To get high quality pictures of the product you are selling, you can ask your supplier to provide you with such images. You take the images from the supplier and Photoshop your brand on the image. Alternatively, you can have one of the products delivered to a professional photographer to take pictures of it. You can also deliver one item to yourself if you prefer to be the one taking pictures of it.

9. The shipping plan: as soon as you create your product listing, you will then have to set up a shipping plan. What this means is that you will have to give Amazon details about the items you are about to deliver to their warehouse.

You’ll need: The box weight, how many boxes you will have, the dimensions of the boxes, how many units are in each box, your supplier’s name, contact info, and address (province, city, and district) which you can get from your supplier. What you need to send to your supplier will be The FNSKU code, the logo to put on the packages, print box labels, the warehouse address that Amazon will give you etc.

  • FNSKU barcodes: this barcode is used for labelling your product to track them on the Amazon database. The label with the FNSKU code will be placed above the UPC code. Even though you can ship your products to amazons warehouse with only a UPC code, it is advisable to also have the FNSKU number.

If your products does not have FNSKU codes and another seller sells the same products as you, both of your goods will be handled together. This means if you place an order, the product that’s delivered might be from your competitors’ inventory and you can’t know the quality of his products. You will get the FNSKU code from your Seller Central after you created the listing.

10. Sell: when you have completed these steps, the only thing left to do it to start selling your private label products. Of course, it will be harder to sell in the beginning because you have no reviews, no reputation, nothing to vouch for you, which can be challenging. For starters, you can run a promotion for your product’s launch. Also, you can make use of PPC campaigns through Amazon Sponsored Products advertising platform in order to make your products more visible.

How Profitable is Private Labeling Products?

In real life, there are so many variables that make determining how profitable a product will be difficult. Be that as it make, an estimate can still be made on how much revenue a product will bring. In order to estimate the revenue, you need to take into consideration all the investment required. For first time sellers, there are two types of investment.

  • One-time costs: this cost involves costs that you will only incur once in the life of your business such as Designing the logo, LCC, photos (if you choose a professional photographer), UPC code.
  • Monthly/Repeated costs: these costs are recurrent. It induces costs like Account fees, Insurance, FBA program fees, Tools, Shipping from supplier, Price you pay to the supplier for the products, PPC advertisements.

A lot of these variables are dependent on the product you want to sell. The FBA program fees, shipping costs, insurance and what you pay to the supplier all rely on the product’s dimensions, weight, and price.

In conclusion, selling private label products on amazon will not make you rich over night. However, with dedication, persistence and perseverance your business will bloom with time.