Private Label Doesn’t Have to Be Hard and Scary

Private label is a hot topic right now. It seems like all the big players are doing private label and it’s a goal for the rest.

I got my start in private label over three years ago. I took a course that taught, like most courses do, that sourcing overseas was the way to go. Unfortunately, though, sourcing overseas wasn’t an easy option for me at that time in my business. The large minimum orders were beyond my budget and quite frankly the whole process sounded a little scary.

Maybe you’re in or have been in this same place. You know private label is the way to build a sustainable long-term business, but the idea of sourcing overseas holds you back.

Some of the potential challenges might be:

– Language Barrier

– Large Minimum Order – 1000 to 3000 units is not uncommon

– Trusting that you’ll get what you ordered

– High Cost of Shipping

– Customs – What if your item gets stuck at the port?

Now please don’t get me wrong. I’m absolutely not the type of person that looks at obstacles and decides to back off . I bet you’re not either. You most likely wouldn’t be reading this article if you were totally risk averse. You have your own business and that’s not easy.
I also do not look for reasons why something won’t work. So please understand that I’m not saying that sourcing products from overseas is an insurmountable obstacle or is so scary that you shouldn’t do it. I have a lot of friends that do it and are very successful with it. I’m just saying that I wasn’t in a place in my business that sourcing overseas was the best option and I know many other sellers that prefer a different way.

Here’s how I found the “Easy Way” method of private label…

I was already selling in a niche that I knew well (a good place to start looking for private label products) and I had an idea for a product so I called up a local manufacturer to see if they could make this certain product for me. They said they could make it, but that it would be less expensive for me to purchase it from a local wholesale company which was already importing it form overseas than for them to make it from scratch.

But could a wholesale company be my private label supplier?

I had an idea. I called the wholesale company and said that I had been given their number from this manufacturer and that I wanted to create my own brand of the product they were importing. I asked if I could simply take their product and repackage it under my brand. Surprisingly, they said yes and my first private label product was born. And unbeknownst to me my journey of becoming the guy that teaches Private Label the Easy Way began.

So all of my concerns about sourcing overseas were solved with my new relationship with this wholesale company the biggest of them was the large minimum order. Do you know how many I had to order to open an account?
One case, which is 12 units. That’s it!!

You might be thinking that private label can’t possibly be this easy. But it can and it is.
This company doesn’t have an official private label program, but they wanted to sell product and I was willing to buy.
What’s even better is that they have several products so I can private label any of them that I want.
Private label can be even easier than this in some cases. Many companies already have private label programs in place in which they will help you design your label or at the very least allow you to send your label and they’ll attach it to their product to make it your own. How much easier can it be than that?

So How do you choose a private label product?

I’m not a gambler, but I might get into horse racing if picking a winning horse was anything like picking a product to private label.
Not that I can guarantee that what you pick will be a winner, but I can show you some guidelines to use that if you follow them, you’ll have a much better chance of succeeding.
Let’s get into them.
Before I get into what to look for, let me discuss what to avoid. Overall, you want an item that is somewhat generic, something that is easy to replicate.
If you’re not quite sure yet what I’m talking about you will after we go through some examples.
Here is a graphic showing some items that would not be good candidates for private label.

Why are these items in my opinion not good candidates?

The Iphone is totally brand driven. Apple has spent millions to build and market their brand and it would take a monumental effort to try to gain even a small share of the market.

When I say it’s brand driven I mean that people buy an Iphone because they want an Iphone not a phone that does everything an iphone does with the same features and look.They don’t want a Zphone or an Lphone. They want an Iphone.

A Coach purse would be another example of a brand driven product.

In contrast, someone buying a cookie sheet is more than likely not looking for a specific brand. Any cookie sheet will do. Since it’s not brand driven, a cookie sheet would be a good potential private label product.

Another example of a bad private label candidate would be a refrigerator. Why?

It has lots of moving parts and is HUGE. Can you imagine trying to send in 500 refrigerators to an Amazon warehouse? Something that heavy is not allowed anyway, but you get my point.

The Nike shoe would not be a good item to replicate because it is very brand driven.

The vacuum cleaner has a lot of moving parts and it’s big.

And finally the computer and in this case a Macbook is also more complicated as far as the parts that go into it and it’s brand driven as well.

So if those above are bad candidates what would be good candidates?

What makes the items in the picture good candidates?

For the most part they are generic, non brand-driven, small, easy to replicate items.

You could make the case that the Garcinia Cambogia is something that people would gravitate to a certain brand, but I know for a fact that this has been private labeled very successfully by many companies.

So overall you want to look for items that have the following characteristics:

1) Generic (Non Brand-driven)

2) Small

3) Easy to replicate

4) Not many working parts

What about the price point to shoot for? There is really no hard and fast rule here, but here’s my opinion…

I would look for items that are between $10 and $50 retail. Why?

If it’s less than $10 then FBA fees will squander much of your profit. If it’s over $50 then inventory gets really expensive. That doesn’t mean if you come across a tremendous opportunity that is outside this that you should ignore it. This is just a guideline to start with.

You also of course want to make sure that the item will be profitable. You may not know exactly yet what the buy cost will be, but I would not be comfortable with anything less than 50% profit. So if my buy cost was $10, I’d want to make at least $5 on every item sold.

Also, be sure to check what category the item you’re researching would be listed under. You don’t want to pick an item that might be considered hazmat or in a category you’re not approved in.

Here is a list of the categories that require approval:

As of the time of this writing Amazon is doing instant approvals in the following categories: Jewelry, Luggage, Shoes, Handbags & Sunglasses, and Clothing & Accessories.

So if you’re not approved in these categories yet stop right now and apply for them.

So now that you know what to look for and what to steer clear of, let’s begin trying to narrow down the category that you want to be in.

Are you already passionate about a certain niche? Start there. Maybe you love to cook. Then begin doing some research in the Kitchen category on Amazon.

Are you already selling items in a certain niche and you want to inquire about private label in that niche? Go for it. Go right to that category on Amazon and start browsing.

Maybe you already have an idea for a product. If you do then go ahead and search for that product on Amazon to see what is already there and how well it’s selling.

If you have no idea what niche or product you want to get into right now that’s totally okay.

One of the easiest places to start is the Amazon Best Seller list.

Here’s a video about how I use Amazon’s Best Seller lists to research potential private label products – https://youtu.be/hA1dLuawbl8 and on Vimeo here – https://vimeo.com/125420113

This is a great place to browse to get ideas.

After you have some ideas, you should dig a little deeper to see if there is an opportunity.

Some questions to ask are:

• What is the best seller rank of the top 5 or 10 listings for the items you’re looking at?
• How many reviews do each of them have?

If the top 5 or 10 listings all have stellar ranks (less than 1000 in my opinion) or thousands of reviews then you may have a tough time competing. Many of the courses out there teach that you want to find a product that you can get into the top 2 or 3. Mine has never been in the top 2 or 3 and yet I still do well and I’m happy with my results. In fact, I have never been on page 1 for any of my main keywords.

I completely understand why they teach looking for an item that you can get into the top 2 or 3 of it’s kind on Amazon. If you’re going through the work of sourcing a product, especially if you’re sourcing from China then why choose one that you’re only going to sell a few a day when the same amount of work is needed to source a product that will sell 20 or 30 or more of a day?

That makes total sense and if I was going to develop a course I would say the exact same thing. But this is private label the easy way so in my opinion, you don’t need to be as strict.

Let me give you an example from my business. If you remember from earlier I mentioned that the source of my private label products have several items they sell and are willing to do a private label with any of them.

Since I have already built this relationship literally all I need to do to launch another product is get my package insert created, buy a case or two, take out their package insert, insert mine, create a listing and then send it off to Amazon.

If I was starting from the beginning and doing research on every product that this supplier has I might not pick many of their products to private label because they might not all meet stricter requirements in the research phase. However, since it’s so super easy to test out a product using my easy way method the risk is very minimal. Once you find a supplier for your product there’s no reason why you can’t do the same thing.

Let’s go back to sales rank and reviews again because I didn’t explain that fully. Just because we’re doing the easy way doesn’t mean we should totally neglect this research.

Like I said above, if all of the top 5 or 10 have stellar ranks and thousands of reviews it may be very difficult to get in this list as this is probably a very competitive product. And on the flip side if the top listings for the item you’re researching all have higher ranks and very few reviews then that product may not sell enough on Amazon to make it worth it.

I hesitate to throw out sales ranks or number of reviews as strict guidelines because each person’s business is different. If you’re doing private label the harder way and having to source from China then I totally recommend picking a product that has a much higher upside.

However, with the easy way I’m not putting as much effort into the sourcing stage and I’m not having to buy thousands of dollars of inventory to get started so I’m okay with an item that maybe only sells a couple per day because it didn’t take much time and effort to get it going. This is especially true of other items that I may want to add that my source carries.

If I was starting from scratch I’d certainly try to find an item that I could sell many per day versus one that might sell every other day. All I’m saying is that with the easy way method, I’m more willing to try a product that may not be a star performer since the time and effort involved to get it going is not huge.

I hope I have helped de-mystify the private label process. It doesn’t have to be hard or scary. I encourage you to take a look at private label because in my opinion it’s the best way to build a long-term, sustainable physical product business.

If you have private label questions please feel free to contact me. My personal email is ryan@ryanreger.com

You can also stay in touch with me at ryanreger.com and/or grab a copy of my book “Private Label the Easy Way” at http://privatelabeltheeasyway.com/