Private label brands have expanded in popularity in the past few years because of the buyer and seller advantages. Private labeling allows you to differentiate yourself from name-brand products on the market.

In a recent survey of Amazon sellers, 50% reported that they sell a private label product and 79% reported that they use FBA (fulfillment by Amazon) to fulfill their orders. While there are large profits to be made in this area as e-commerce sites continue to grow exponentially, it has also become a competitive space. If you want to succeed, you’ll need to know the ins and outs of building a private label brand.

What is a Private Label Brand?

A private label brand is often referred to as a “store brand.” Common examples include Walmart’s ‘Great Value’ brand and Target’s ‘Up & Up’ brand. They take generic products and put their own twist on them. This is the heart of private label.

Other reselling methods usually involve purchasing an existing product from a wholesaler or retailer. Private label is different in that it develops new products through a third-party or contract manufacturer. You might be thinking “creating your own product” sounds pretty intimidating but there’s a big difference between being an inventor and having a private label brand. 

While you don’t want to copy other products, don’t think you have to reinvent the wheel. Think of generic products that you can add a unique twist to. You don’t have to invent something new, but you do have to offer something more than what your competitors are offering. A successful private label has a tried and true product that still offers something more and different than competing products.

Step 1: Know The Investment Cost

Every business starts with investment costs. You should expect to put in between 5k-10k to start up your private label brand.

There are four main categories for start-up expenses:

1. Manufacturing: Your first purchase will have to come out of pocket. Consider the cost for labor, materials, manufacturing, and shipping. There will be additional costs for customizing and branding your product.
2. Branding: As we said, branding is the thing that will make your generic product different from the rest. Costs will be required to hire a graphic designer to create a logo and design for your brand. (Take a look at our design work here for some ideas!)
3. Marketing: Plan a large number of upfront costs for effective marketing. This can include optimizing the listing, paying for ads, working with influencers and ambassadors, and much more.
4. Unexpected Fees: Starting a new business comes with a lot of unexpected fees and expenses. It’s good to have a sizable cushion of money set aside for the things that pop up along the way so that you don’t have to panic or halt production because you’re out of budget.

Step 2: Choose A Product

There are three things to consider when choosing a product: 1) the current trends of the market, 2) the qualities of a good product, and 3) how can you add a unique selling point (USP).

Consider researching social media platforms like TikTok, Instagram, and Pinterest to get familiar with the current trends. Then put these products through the quality test. The qualities of a good product include being lightweight, year-round products, with simple design, that can sell for $20+.

When choosing a product, be careful not to simply create a duplicate of an existing product. This is what the industry calls a “me-too” product. Legally, you can get away with it if the design is not copyrighted, but these products don’t sell very well because they don’t offer anything new. 

You need to have a reason why people should choose your product over all the others. We call this a “unique selling point (USP)”. What does your version of the product have that others do not? What are ways you can upsell a potential buyer? You want to make it obvious to customers that your version offers more than all the other options available to them.

At EcomRanx, we specialize in this step. Our team of Amazon experts are experienced in tracking the trends of the market and determining which products have the best chance of success. We help you create a successful product for your private label brand simply and efficiently. If that sounds interesting to you, give us a call for a free consultation!

Step 3: Find A Supplier

Now that you know the product that you want to sell, it’s time to make it! Finding a reliable supplier is crucial to a successful reselling business.

While lots of people on Amazon and other online stores use drop shipping and wholesalers to get their products, building a private label brand takes you straight to the manufacturers.

There are lots of benefits of working with a manufacturer that increases the appeal of starting a private label brand over other reselling options. Because they are making the product for you, they won’t run out of stock or discontinue the item. You have more control over price negotiations. Choose a manufacturer that has great communication that you can develop a good relationship with. If all goes well, you’ll be working with them for a long time.

Ask lots of questions. Learn about shipping cost and times, request reviews from previous and current clients, and get detailed descriptions of their processes. Even more than the answers to these inquiries, you will learn about their communication style and how well you work together.

Step 4: Define Your Branding

Your brand is arguably the most important part of a private label brand. It is your differentiating factor from the competition. You will need a unique logo that represents your brand. What this is will be influenced by your product and target market, and hopefully encompass the thing that makes your product better or more appealing than other versions of the same product. Brand loyalty is every business’s dream, and you kick that off with compelling branding. 

People gravitate towards aesthetics and love products that look good and are packaged well. This will include great pictures, diagrams, videos, etc. Take this as an opportunity to once again set yourself apart from the competition. High quality branding will make your businesses appear more legitimate which will result in greater trust from buyers. Be clean, clear, and thoughtful in your branding.

Check out some of our branding and design work here!

Step 5: Online Presence

Once you have established your brand and sourced your product from a reliable manufacturer, it’s time to build an online presence. Amazon is basically the selling capital of the internet and the perfect place to start. There are a lot of reasons to start there.

1. Incredible Reach: Amazon has over 150 million prime members and even the small and medium businesses that sell on Amazon make an average of $160,000 annually according to a recent Amazon report.
2. The Support: Amazon wants you to succeed. The more sales you make, the more sales Amazon makes. They spend billions of dollars annually helping to push small and medium-sized businesses on the platform.
3. All-Inclusive: Selling on Amazon can be as low-maintenance as you would like. They handle all payments on the most basic plan and with the addition of Fulfillment By Amazon (FBA) they handle packaging, storing, shipping, and returns. This service is hard to beat.

Pro Tip: One of the best things about FBA is that Amazon will actually help you sell on platforms other than their own. You can create a store on Etsy, Shopify, and even eBay and FBA will help you fulfill those orders! Having all of your fulfillment occurring in one place by one of the most successful businesses in the world is not a feature to sneeze at.

As you know, brand awareness is a big deal, so creating a website, social media accounts, and working with influencers and ambassadors are a great way to establish reputability.

Step 6: Sell And Repeat!

Now comes the actually exciting part: sell your product! Continue optimizing your product listing, take good care of your customers, and look for more and more ways to automate the process. If you take good care of your brand, your brand will take care of you. 

Once it’s selling smoothly, it’s easy to turn those profits around and put them into another product or two. Building your Amazon empire is only a couple private label brands away.

How EcomRanx Can Help

Building a private label brand from the ground up can be time-consuming and intimidating. That’s where we come in. Here at EcomRanx, we offer Amazon expertise to help you get to your fully flushed out Amazon business with fewer detours and with sustainable success.

We begin with a one-on-one consultation with you to establish a plan of action. At EcomRanx, we offer access to certified Amazon experts. We use trends and expert resources to determine a successful product, deliver design and branding assistance to ensure a strong brand presence, and optimize your listing to make sure that your product can be found on the Amazon search engine. Learn more about our service packages here!
We are passionate about providing this valuable resource to people like you. If you are interested in learning more, give us a call at 435-932-0299 to set up your free consultation today!