Amazon holds real opportunity for anyone who wants to build an income online — if they know how to do it right. If you're looking to generate a side income, or something bigger, you've come to the right page.
In this article you'll be introduced to the world of the Amazon private label business: what it is, why it's such an effective money-making model, and how you can start your own with minimal hassle. Let's get into it.
The Benefits of an Amazon Private Label Business
First things first: what is private-label branding?
Retailers usually buy products from a manufacturer and sell them under that manufacturer's branding. Private labelling is slightly different: you find unbranded or custom products and resell them under your own name, using your own brand and designs.
As one of the biggest online marketplaces, Amazon is an excellent platform for selling private label products. But that's not the only reason to consider it.
1. Minimal Competition and Cost
As a new Amazon seller there's ample room to enter the market — especially if you know what you're going to sell — and it doesn't require a large initial investment. The 2021 Amazon Seller's Report found that half of US sellers use Amazon's FBA programme, a fulfilment option that is over 30% cheaper than other shipping carriers.
Private-label selling also gives you a distinct advantage over resellers. By selling under your own name rather than reselling another brand, you won't be listing the same products as anyone else — which means you're not competing with other merchants for the buy box.
2. Strong Profit Potential
On average, FBA sellers earn around $42,000 a year, and nearly 70% achieve a profit margin above 10%. Roughly 20% reach an income of $100,000 within two years, and about 6% already belong to the millionaires' club.
3. Amazon's Fulfilment Platform (FBA)
Amazon offers a superb platform to help private-label owners scale quickly. The FBA programme lets you ship your items directly to a fulfilment centre, which handles all packaging and shipping for a fee. You can also take advantage of added services like Prime's two-day delivery.
4. A Huge Market
The convenience Amazon offers is undeniable, and it has expanded into some of the biggest economies in the world. As Amazon grows, new opportunities open up for new brands to flourish, with a vast range of product categories — and niches — to choose from.
How to Start a Private-Label Business on Amazon
For entrepreneurs looking to launch a profitable side hustle or a full business, Amazon FBA can be the pot of gold at the end of the rainbow. But how do you get there? Start your Amazon private-labelling business with these concrete steps.
1. Decide What to Sell
Selling isn't about you — it's about your customers. What do they want? And how do you make sure your products stand out among the thousands on Amazon? The answers lie in reliable, intelligent product research. Look for:
- Products with a price range of $10 to $50
- Products with at least ten sales a day
- Similar items in your niche with a "best seller" rank of at least 5,000
- Top three related keywords with over 50,000 monthly searches
- Products that sell all year round
- Products with strong potential for repeat sales
- Products that are small and light (under 2–3 pounds)
- No trademarks or brand names attached to the product
- Products you can mark up by around 25%
- Room to optimise the product and improve existing listings
You can analyse your niche manually, but it's a time-consuming part of the process. Often it's best to enlist online tools that do the grunt work and surface accurate, relevant information about your products.
2. Open a Seller Account
Amazon offers two routes to becoming an FBA seller, depending on whether you're a brand-new business or a merchant already selling on the site. New sellers can follow three simple steps:
- Check whether your country is eligible for seller registration.
- Prepare the following:
- Business email address
- Amazon customer account
- Phone number
- Tax information
- A bank account for Amazon payments
- Government ID
- An internationally chargeable credit card
- Create an account here.
3. Source the Product
Next, source the product you want to resell. Find a manufacturer or supplier who can answer "yes" to all of the following:
- Are they willing to produce your product?
- Do they offer quality assurance, inspection and testing?
- Will they provide good customer service?
- Can they supply product samples at little or no cost?
- Do they offer affordable or free shipping?
The best places to find suppliers are Alibaba, the Amazon Seller Forums and Tradekey.com.
4. Package and Label
Amazon has a comprehensive set of packaging and labelling requirements. Read it carefully to avoid extra fees — or worse, having your goods rejected by the fulfilment centre.
- Any products delivered to Amazon's fulfilment centre must be free of theft-deterrent devices.
- Labels must include a scannable barcode.
- The fulfilment network stock-keeping unit (FNSKU) should match only one product. Two products of different sizes each need a unique FNSKU.
- Secure loose products in a single package, and bundle pouches with removable tape.
You can use any box, including recycled ones (cover any old barcodes), as long as it meets Amazon's standards.
5. Ship Products to FBA Warehouses
You can't simply drop products off at your nearest fulfilment centre, but the shipping process isn't complicated. Amazon gives sellers a simplified workflow that lets you generate shipments by uploading a CSV inventory list or adding items directly from the "Send to Amazon" page.
Many overseas manufacturers already know how to label shipments to meet Amazon's requirements — and if yours doesn't, you can share this guide with them.
6. List the Product on Amazon
You're getting close. With your items on the way to the fulfilment centre, you're ready to launch. According to Amazon, a good product listing includes:
- An SKU or product ID to track your inventory
- Product identifiers such as ISBN or EAN
- Price, available quantity and shipping options
- Condition of the product (new or used?)
- Relevant keywords and search terms so shoppers find your products quickly
7. Promote With Pay-Per-Click (PPC)
Once your product is listed, it's time to build a promotion plan for maximum visibility — and this is where you can get creative.
Set a budget for advertising and use PPC to promote your products. Set up an ad group in Amazon Seller Central, add keywords related to your product, and manage the campaign by setting bids for each keyword so only relevant terms are targeted — no wasted spend. You can also promote your product on the homepage using Sponsored Brands ads.
8. Enjoy Your Profits
If all goes to plan, these steps will lead you towards success in your private-label business. Once orders are steadily coming in, you can sit back and enjoy the fruits of your labour.
Final Thoughts
Starting a private-label business on Amazon is no easy undertaking, but the potential rewards make the effort worthwhile. Whether you're after some extra pocket money or a steady stream of solid income, we hope this guide helps you reach your goals.