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Expert Advice for Selling Private Label on Amazon In 2019

As we reach mid-November, the holiday sales season is right around the corner and many online brands have already planned to maximize their sales this upcoming Christmas season. We all know that the “true” holiday selling season kicks off on Black Friday up until a few days before Christmas.

For many online retailers, including private label sellers, they see a huge surge of revenue from the season that boasts strong buying power from consumers in preparation to give gifts. Some sellers report that they see three to five times the amount of sales compared to normal months and some seasonally focused sellers attribute over 50 percent of their annual sales during this period. So, it is without a doubt that the holiday season is one every online seller should capitalize.

But it is also very easy to forget about appropriately planning for 2019. This time of year is the perfect time to sit down and really think strategically about your goals and plans to grow and scale your business this next year. The reality is that as marketplaces like Amazon continue to grow and evolve, so you need to build some of your strategies around fitting into those boxes. Yet, it is also critical to not be fully dependent on one marketplace, so diversifying your sales is an important long-term strategy to you need to build.

We live in a fascinating time where regular people, with little to no experience selling online, can build wildly successful businesses selling private label products to the masses. There has never been a time quite like this in history where businesses can be born with little startup capital, have no need for a physical location, have a small amount of overhead costs, no marketing knowledge, or securing investors to help fund the beginning days. Private labeling is one of the greatest opportunities to build something you are proud of; something you can stand behind. The time is NOW to build your brand - let the planning begin!

So as you begin thinking through your goals for next year, whether to start your private label brand or grow the one you currently have. let me share with you “6 Things You Need to Know About Amazon & Private Labeling in 2019.”

#1: Private Labeling is Still The Key to Long-Term Success

There are tons of ways to make money online by reselling inventory - retail arbitrage, online arbitrage, wholesale, liquidations, garage sales to Craigslist or Ebay. The problem with these methods is that you are completely at the disposal of someone else to provide your inventory. If a store goes out of stock or an online site only allows you to order a few units or a distributor cuts you off….the reality is that you don’t control the supply chain. In addition, you might need special approval for gated brands on Amazon to even be selling them. But the biggest disadvantage is the overall profit margins. On average, the return on your investment using other methods to sell physical products online are marginal compared what you can achieve with private labeling. Don’t get me wrong, I know many people making a great living utilizing those other methods, but they don’t hold the type of long-term value compared to private labeling.

Building your own private label brands allow you to go directly to the factory who is producing your product, at the lowest cost possible, with unlimited inventory to sell and full control of the supply chain. No middleman. No extra fees. Not only do you get the advantages we already discussed, you get to build something that is YOURS. Not someone else’s brand - this is YOUR brand that you can begin building additional products around. As you build your brand, you begin creating a tangible asset that no one else can claim as their own. Private labeling is the only way to guarantee long-term success enabling you to take control of all areas of your business - supply chain, pricing, and more!


 

#2: Leveraging Marketplaces Like Amazon, Walmart And More is The Best Place to Start

Many times I see private label brands fail because they start trying to build their raving customers in the wrong place. I would encourage every new brand to fully leverage the popular marketplaces out there today to begin launching your brand to the world. This allows you to circumvent the need to build your own following, but rather rely on trusted places like Amazon, Walmart, Ebay, Etsy, and many others have millions of customers ready to buy from their site.

Amazon, for example, proves to be the strongest marketplace today accounting for almost 50% of all US e-commerce sales and boasts over 100 million Prime members who spend an average of $1,300 per year. Third-party sellers like us, also accounted for 53% of all sales on their site this last quarters proving that brands have strength on their site. So the numbers are pretty clear that Amazon is a great place to start selling your brand where the customers already are.

Launching your brand requires that these marketplaces are part of your sales strategy. Building your own loyal following is hard and requires specialized skills to do it right. So, lean on the established marketplaces and go where millions are already shopping.

 
#3: Being Flexible is Key as Marketplaces Like Amazon Continue to Evolve

As great as it is to leverage marketplaces like Amazon, it is increasingly important to remain flexible as their policies, processes, and approach changes. You must remember that the customer is the primary focus, so ensuring your approach fits in that same methodology is key. Amazon constantly is shifting their terms of service to best benefit the customer and protect the integrity of their site and I have seen many struggle through those changes because they were unwilling to shift along with the changes. This prevented them from growing and really seeing their brand gain momentum alongside the changes Amazon was making. Stay flexible, be creative, and be open to how you can continue taking a site like Amazon and working it to your advantage all the while adhering to their policies.

One big shift in the private label marketplace is Amazon going heavy into launching their own private label brands. For many sellers, this created fear that Amazon is going to slowly take over their sales as they bring products to market, but as you look at the markets Amazon is focusing on, there are thousands upon thousands of product opportunities that still exist. Amazon is focusing their energy on large markets like mattresses, diapers, clothing - so the key is to stay in the niche categories on their site. It has been said many times before, but it still stands true today - the riches are in the niches. Focusing energy into niche categories ensures your best chance of success!

#4: Building a Social Following is Foundational to Retaining a Loyal Customer Base

Many of the large marketplaces like Amazon account for a large portion of the overall revenue for your brands. This is great news - but there is one problem - you don’t own the customer. This creates a challenge in building a strong, loyal customer base to launch future products too and help spread the word quickly. So, what is the solution? Make sure you have a social strategy attached to your brand. Find creative ways for customers to connect with you through product packaging, product inserts, a strong brand story, warranty registrations, discount off future purchases, free gifts, and more!

Knowing that you don’t own the customer on other marketplaces should drive you to making sure a social strategy, and yes this includes an email list, is part of your core growth plan. This needs to happen from day one to connect with your ideal customers. You can leverage this list to drive traffic to your own website to pad your profits even more. Building your own customer list not only protects you in the future, but allows you to be successful on many of the marketplaces as new products from your brand come online. This is a gift that keeps giving.


 

#5: Selling Your Brand for a Big Payout is An Attractive Exit Strategy

One of the most exciting trends happening today is businesses being sold for large payouts. I am in the process right now of partnering with an investor to acquire an Amazon business for $500,000 that has HUGE potential for growth outside of what they are doing today. These types of paydays are REAL businesses that are cashing in on their hard work to invest in other businesses. Why would someone want to sell a business that is producing consistent, growing profits each month? Some want to invest in real estate, some are looking to build a brand around something they are passionate about, some have investors wanting their capital back. Regardless of the reason, these businesses are being bought every month and this could be yours after just a short few years.

One of my favorite companies that was recently acquired by Amazon for over $1 billion - yes that is billion - built a brand with products around it. Their best seller is a video activated doorbell for homeowners to us without having to open the door to strangers. This innovative product exploded in just a few short years and Ring was sold for big money! You might not have your sights set on selling a business in the billions, but I think we could all agree that a 7-figure payout is not something to shrug our shoulders about.

 

#6: Ensuring You Have the Right Information to Make the Right Decisions

I cannot stress enough how important it is to get the RIGHT information about growing your business. There is a lot of free content out there today that could legitimately put your business at risk. Maybe the article was old, or the advice given inside a social community was not fully tested. With so much buzz in the online selling space, it is important to avoid the gurus and connect with knowledgeable experts who are actively building their own brands online. There cannot be enough said about working alongside a mentor who is “in” the trenches with you.

I have the privilege of doing just that as I build my own private label business AND help others do the same. I oversee a publication called The Private Label Insider, where we bring together the top industry leaders in one place, sharing with you the most up-to-date strategies to grow your private label business. These experts truly know their stuff and work daily with online sellers to help build successful businesses. For a low monthly subscription fee, or save with our annual plan, you get over 50 pages of actionable content every month to explode your business. Get Subscribed Today!

I also have the privilege to be the co-founder of Freedom Shark, a company dedicated to helping Amazon sellers see success. We specialize in private label training through our course called Build My Label, product branding (logos, packaging, inserts), and our industry-leading Done For You Private Label Program™ where we help clients begin building their brand on Amazon. We are on your side and here to help you realize your dreams of building a brand on Amazon and beyond!

Twice a year, ASD Market Week offers free retail education seminars for online sellers. These seminars include workshops on private label, sessions with e-commerce experts, firsthand advice from Amazon selling experts (lawyers, marketers, product developers) and other more. To find out more or register for our next event, register for free. 

About The Author


Brandon Andrews is the editor-in-chief of The Private Label Insider, a publication dedicated to bringing industry leading experts to hundreds of subscribers each month sharing the latest and greatest strategies to build your brand online. He also is the co-founder of Freedom Shark, a company that offers a full comprehensive training course for Amazon private label sellers along with unique services for their clients. This includes their industry leading Done For You Private Label Program™ and product branding services.


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