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Mistakes I Made When Starting to Sell Private Label Products Through Amazon FBA

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Learn to walk before you can run..

Though my own Amazon FBA journey encompasses various business models and successes, it is most important to acknowledge and reflect back on the mistakes and failures along the way.

I’ve decided to go through some of the unfortunate, yet educational experiences I’ve had throughout my FBA journey and outline some useful tips and resources in an effort to help you avoid them. This post particularly relates to the Private Label Business Model.

My own blunders:

In my hunt for locating the best possible private label products, I wanted to follow the outlined criteria provided by many of the “experts” in the e-commerce sphere. So, what did I do? Well, I sifted through perhaps thousands of articles and course materials, trying to obtain as much information as I could, so I didn’t fail miserably when attempting to discover my first private label product.

They said:

  • Make sure the item weights less than 2 Pounds
  • Make sure the item is not fragile or flammable
  • Make sure the item is not oversized
  • Make sure the item sells for between $10-$50.
  • Make sure the item doesn’t have too much competition; and the competition it does have, should not have more than 50 reviews from at least 3 sellers.

These were just a few of the suggested “criteria” to search when attempting to find your private label product. I decided I’d go all in based on the suggested criteria, and an open mind.

Alibaba

Like many other people – I decided to focus my product research on Alibaba, given the breadth of wholesalers/manufacturers available in one database, and considering I could get access to products cheaper and from essentially any country I wanted.

The suggestions I got were: 

  • Research products based on the suggested criteria.
  • Reach out to the vendors on Alibaba that carry your items. Ensure they have trade assurance; and have a gold badge attached to their seller name.
  • Ensure the vendors respond quickly, have many transactions and good feedback.
  • Reach out to multiple vendors, so you can have leverage in negotiating price.
  • Ensure to look for vendors with OEM branding ability.

The additional suggestions I wish I received:

  • Rather than ordering a minimum quantity order of 100 or 500, like I did, find a local distributor through google or use aliexpress to test the product first. Send it to Amazon on an unoptimized listing, run PPC ads to it. Then, if it sells, and you get enough valuable keywords, reorder in a larger quantity and optimize the listing!
  • Make sure that that you cross check 1688.com when negotiating in order to get the market price in the product country.
  • Make sure you really ensure that you have a solid product. If the product is useful, it will sell if you apply all the other suggested principles. If it’s a dud product from the get go – then it will eventually falter, even if it may start off hot.
  • Make sure that you really pay attention to the packaging. Bad packaging, such as those that crush the item, will result in negative experiences and lead to a high return rate.
  • Make sure you consider holidays and lead times when ordering from abroad.
  • Ensure you find reliable freight forwarders that will take care of the leg work associated with customs.
  • BONUS TIP: Use Junglescout chrome extension, keepa, merchantwords and camelcamelcamel to conduct product research and help eliminate unnecessary risk.

Once you consider all of the necessary points through Alibaba, you must then transition to the process on Amazon itself.

 

My own experience on Amazon with my first Private Label product

Having followed most of the tips outlined above, I eventually got my product into Amazon’s warehouses and there was definitely more work to be done!

Here are some tips based on my positive experiences for ensuring a smooth product launch on Amazon:

  • Work on optimizing the listing, in order to ensure that when traffic start coming to the listing, it starts generating sales. Optimization includes:
    • Images: Make sure you have descriptive imagery, showcasing the use of the product. That is very important for the consumer’s decision making. Ensure to have as many images as possible – i’d recommend at least 5 or so; and ensure they are clear, and well done!
    • Keyword optimization: Ensure that your listing is optimized for appropriate keywords – namely those that a customer may search in order to find the item you’re selling. For example – if you’re selling a strawberry peeler, make sure you have the key words “strawberry peeler” somewhere in your listing. Sometimes, it’s best to focus on the keywords when doing product research, moreso than even the product – as the key words can often lead you to the right product.
    • Review competitors’ feedback and customer reviews, and ensure that your product solves many of the concerns from other products, and this applies to including the changes that your product provides in your listing text.

Yes.. I was able to account for all those points in my listing.. however, what I didn’t totally account for, comes next:

PPC Ad Spend: 

  • I did not realize that much of my profits and margins would be eaten up by the cost surrounding Amazon ppc. Don’t get me wrong – the ads worked great when they worked. However, there was a ton of learning, and spending before the ads were optimized enough to perform at a cost, that was profitable to continue selling the item. At the time, I really focused on Merchantwords to target key words – but looking back, I should have utilized Google Keyword planner, Amazon’s own search tab, along with some of the other key word tools out there available. That way, I would ensure to have better targeting and limit the amount of spend that I lost on ads.
  • Run PPC ads on a test product before ordering in large quantities: Obtaining keyword research on a small quantity would have been a game changer for me at the time. Having valuable data on keywords at your disposal before ordering in large quantities would allow me to target better and ensure I focus on the most optimal keywords, rather than doing a lot of testing with my items already in Amazon’s warehouses. This is a strategy I learned from Brett Bartlett through his wonderful PPI training, as part of the ProvenAmazonCourse, which you may find at ProvenAmazonCourse.com.

Re-ordering before stock runs out:

  • Though it may seem like a good problem to have, that you’re selling out of an item; in reality, you need to be sure that you will leave yourself enough time before your stock runs out.
  • The reason for this, is because, once stock runs out, your ranking will start to fall and as a result, your competition will be able to come in and take over your placement on the first few pages.
  • The ability to return to the same sales velocity prior to a stock out is a very difficult task, particularly because you will be competing with other hungry sellers, that may have similar products and more capital to invest in ensuring that they succeed.

Ensuring you have enough capital to re-stock

  • In order to place a re-order for products, you should ensure you have enough capital, and/or are willing to incur a certain amount of debt so that you can ensure that your item continues to be in stock. You need to avoid stockouts at all costs.

Ultimately, the combination of PPC spend, not having enough capital at the right time, and reordering at the optimal time led to my biggest blunders in this case. Had I accounted for these points, my product would have continued to sell at a high rate, and would have been a continued success. Instead, I needed to cease selling this product, as my product never recovered from these issues.

So, you see folks – even if all the other elements are being considered, it is wrong to ignore the other points that I mentioned, when in fact your product is doing well. Just because your product is gaining traction and starts doing well, you should never remove the pedal from the metal. As Gary Vaynerchuk says, always audit yourself. your products, and your business, and you will be able to learn from your failures and turn them all into major successes down the line. Never let failure define you. Let it teach you, and make you a winner!

 

Resources Mentioned: Keepa chrome extension, Camelcamelcamel chrome extension, Junglescout chrome extension, 1688.com, provenamazoncourse.com, merchantwords.com, google keyword planner

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2 Comments
  • Cecilia May 3,2018 at 9:38 am

    Hello Gregory,
    I found your website through a comment you left on Quora whch resonated with me. Thank you for the valuable information about “Mistakes to avoid when selling on Amazon”, that is very honest and helpful.
    I am only starting my journey towards achieving financial freedom – I am a veterinarian but realised that this profession was taking up all my time and energy and not giving me back the freedom I wanted to be fulfilled.
    I have launched my first private label product on amazon.co.uk 6 weeks ago. However it is not selling well. Maybe because it is a winter product, maybe I am doing something wrong (all self-taught so far!).
    My humble question to you Gregory is: do you recommend any amazon mentor/coach that is reliable and has a proven outstanding track record?
    Do you provide mentoring yourself? 🙂
    Thank you for your time and your advice would be greatly appreciated!
    Cecilia x

    • Main Admin May 4,2018 at 12:06 pm

      Hi Cecilia,

      Thank you so much for contacting me. I love seeing messages like these, as it humbles me knowing i’m able to help at least one person! With that said and in regard to your question; I would definitely say that a mentor or coach would be able to get you to your end goal faster, whatever that may be. However, the right coach/mentor is needed for your particular goals as well as your circumstances. Not everyone is out to achieve the same thing, in the same way; so it’s really about your particular needs. In terms of whether I mentor, yes, definitely! I will be happy to contact you, so we could potentially set something up and see if you need any further assistance! Would be delighted to help you the best I could! Thanks so much once again.

      – Greg

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