Private Label Business Model on Amazon
There are various models for trading on the Amazon marketplace. As expected, each of them has a number of advantages, but not without its disadvantages. In this article, we’ll examine a Private Label business model.
This trading method differs from White Label in that the seller can trade the products of any manufacturers by making his own changes. That is, assigning the necessary branding elements to an unmarked product. For a business on Amazon under the Private Label model, the manufacturer does not label products. This is agreed in advance.
What Are the Benefits of an Amazon Private Label Business?
1. Reduced competition due to sole ownership of goods and, as a result, no need to share Buy Box Amazon. But this is only valid if the TM is registered. On this page you can get comprehensive information on registering your trademark and get help with the Amazon Brand Registry.
2. Having his own TM, the seller gets full control over the business and the opportunity to subsequently become a well-known brand.
3. With sufficient capital investment, Amazon Private Label allows you to scale your business beyond the range of products sold.
Disadvantages of the Examined Model
1. Time and material costs for marketing, branding, etc.
2. Careful attention to the use of copyright when registering a trademark, choosing a product design, etc. Violation of this rule can lead to complaints from competitors if the seller makes a mistake somewhere.
3. Mandatory participation in the Amazon Brand Registry program, the refusal of which may attract hijackers and worsen the reputation on the marketplace.
How to Sell Private Label Goods?
In a nutshell, the business of selling products consists of three stages: the production of goods in China, their transportation to the states and, in fact, the trade itself using the FBA service. This is the most commonly used scheme.
As for China, the organization of production in this country is convenient and not too expensive. The manufacturer will be ready to use its capacity for its intended purpose and make money only on this, without having to bear the costs of branding, marketing and promotion. The Amazon seller, in turn, receives inexpensive products for further sale.
Delivery of goods to the USA is used most often because the market of this country is the largest and most understandable for entry to businessmen from the former CIS countries (Belarus, Russia, Ukraine, etc.). Residents of these states can trade on the marketplace without registering a company, but acting as a physical person. An important part of the Amazon workflow is also the use of FBA. This allows you to avoid many moments of work, time-consuming and costly, as well as difficult for many newcomers to the marketplace. You can read more about working under the Amazon FBA program in this article .