Selling white-label products can be highly profitable: private-label brands saw a surge of profits totaling $228 billion in the United States in 2022. As more consumers become concerned about the manufacturing—and cost— between branded and white-label products, businesses are presented with a potentially profitable opportunity across different markets.
The profitability of white-label products can be even higher when combined with Amazon’s effective fulfillment channels. The Amazon FBA model allows white-label products to be sold on the platform: and with over 300 million potential customers, you’ll have plenty of chance for profit.
So how exactly can these two models work together for any aspiring entrepreneur? By taking advantage of each approach’s strengths, a business can leverage the flexibility of selling white-label products with the backing of Amazon’s numerous distribution channels.
Here’s our guide to helping you succeed as an Amazon FBA white-label seller.
How White Label Products And FBA Work Well Together
White-label products are simple to understand:
- They’re products that a business (in this case, the FBA seller) buys from another company
- These unlabeled products are rebranded by the FBA seller
- The businesses sell these newly-labeled products under their own brand
The white-label product business model allows sellers to get a product launched quickly for earlier sales, have the freedom to brand it to build customer loyalty, and grow their businesses long-term by making their own adjustments and improvements to the core product.
This works well with the Amazon FBA model because businesses also don’t have to worry about fulfillment, inventory, or general distribution of their products. They can focus their time, energy, and resources on product research, acquisition, branding, marketing, and development, allowing them to create a higher-quality product than other businesses selling the same white-label product.
The simplicity of sourcing/selling products through white-label and the convenience of adopting Amazon’s FBA model make these two approaches extremely appealing to many businesses that want to start selling online.
3 Guidelines On Picking The Best White Label Products
In another guide, we talked about how to get started as an Amazon FBA seller, so we’ll focus on what’s arguably the most important if you’re using it as a white-label seller: the products.
While the quality of the product is generally something not within your control (unless you have an agreement with your source to make alterations before you receive it), what you do to brand these products is crucial. But even before you get to that point, it’s necessary to conduct the work to make sure that you have products that the market demands.
Here are the 3 guidelines you should follow for the product development process:
1. Look at your market
Amazon is a global platform. It accounts for around 37.8% of the eCommerce market share in the United States alone as of 2022 and with millions of potential buyers all around the world.
What does this mean? Your market for your white label products is only limited by what you can source from—and Amazon’s own regulations, which we’ve also covered in other guides.
Market demand can be determined in a few ways:
- Looking at existing trends and finding a product to fit
- Cornering a local market that hasn’t seen much exposure to your product
- Using tools and software to analyze which products are selling the most on Amazon
Whatever the method, it’s crucial to have a clear picture of what products are selling and who exactly are buying them. This makes it more likely that you’ll launch a product that will see sales.
2. Partner with a supplier or manufacturer
Finding the right source for your white-label products is crucial. You don’t have a lot of opportunities to make any changes to the product that you’ll get aside from branding and marketing. So if you want to save time and effort with quality assurance, you’ll have to find the right provider for your white-label products.
Specifics may vary depending on what they’re planning to sell, but businesses should generally:
- Look for sources that can provide them with quality white-label products with reasonable pricing
- Has properly removed any identifying information from the white-label product before it gets to the seller
- Can scale both production and delivery of white-label products as the seller’s business grows
- Must be able to ensure the quality of products between transit from their facilities to the seller’s business
- Provides samples of the white-label products they offer for testing
Aside from ensuring product quality, the right manufacturer should also be equipped to meet the demands of your business, whether that’s scaling up or down. It’s not uncommon for a white-label business to have different manufacturers for different products, so make sure to do your due diligence before picking one.
3. Brand your white-label product
Branding is perhaps the most important thing you can do for a white-label product. Otherwise, your customers will not see the value of purchasing your specific product over your competitors or even the branded products from bigger players.
Ideally, by analyzing the market in step one, you’ve already gotten a firm idea of what makes your product stand out and why your customers should buy it. Remember that 76% of consumers today are far more likely to buy white-label products, so you need to make your brand stand out.
Some approaches you can try are:
- Angling your product to address a specific need or market that your competitors have not promoted
- Integrating your product with pre-existing product lines that you already have
- Crafting a solid social or sustainable message to push your product to more conscious audiences
- Making small changes to your product or framing its uses in a new way
- Improving customer experience around your product
With the right branding, you make your specific white-label product stand out compared to all the other similar white-label brands selling the same thing. Again, you don’t have much control over the product itself—and neither do your competitors—so your branding will make all the difference.
Should I Start With A Single White Label Product Or Multiple?
If you have confidence in your white-label product (or if you’ve cornered a specific market), there’s nothing wrong with selling that one product and funneling all the resources of your Amazon business to support it. It’s usually better to make one product of outstanding quality rather than have several substandard products.
However, if you’re looking to explore the possibilities of what type of white-label products work best for your targeted market, it’s also fine to launch several. This allows you to narrow down which products are performing best and double down on your best sellers. Combined with Amazon’s support for FBA sellers, you’ll have a reasonable chance of turning a profit.
FBA vs. FBM (Fulfilled By Merchant) For White Label Products
FBA isn’t the only way you can go about fulfillment for white-label products: there’s also the option of doing it by yourself. This method (called FBM) involves you being the sole entity responsible for everything about inventory and shipping, though there are also cases where you don’t have to do that.
So which one works best if you’re selling white-label products? It depends on the setup you have for your business. Here are some considerations you need to keep in mind if you’re considering one or the other:
- Inventory, handling, and shipping are taken care of by Amazon, which means you don’t have to devote time and resources to optimize the fulfillment process
- You get access to Amazon’s fulfillment and distribution options (with the corresponding fees)
- Amazon handles customer responses on your behalf, freeing up more time and resources
- Products can be delivered via Amazon Prime for fast fulfillment, improving customer satisfaction with your brand
- Amazon is guaranteed to have inventory space for your products, no matter your location
- You take care of shipping and handling, allowing you more flexibility in fulfillment options (especially if you want to personalize your packaging)
- Fulfillment will only cost as much as you want it to, depending on the prices of your fulfillment partner
- Customer response can be as personalized as you like, allowing better insights for better customer service
- Seller Fulfilled Prime can also help you ship goods to customers faster with Amazon’s support
- You can have more flexibility over the state of your inventory and don’t have to worry about inventory limits
Which one should businesses choose? FBA offers far more convenient options than FBM but at a cost. FBM offers you more opportunities to improve customer service, with the tradeoff being that quality relies on your own efforts.
White-label products don’t have special considerations regarding which model you pick, but there will be differences depending on what you sell and how many unit sales you make. The more you sell, the more Ideal it is to opt for FBA so you can focus on product quality. But if you’re selling products that require special storage conditions, FBM may be the better option.
Can you do both? Absolutely. Plenty of merchants use a mix of FBA and FBM for fulfillment. While this does mean your fulfillment costs go up, you’ll have access to different options to serve your customers better.
How To Grow Your Amazon FBA White Label Business
One important consideration that sellers need to keep in mind is that it’s unreasonable to think that one white-label product can be profitable forever. eCommerce trends change by the year, and with platforms like Amazon constantly adding new features and changing key policies, what works today may not work tomorrow.
So how can you scale your white-label Amazon FBA business? Here are a few ideas you can consider:
Get key insights about the performance of your own business
Businesses can’t scale their operations without having a concrete idea of what’s already working with their current operations. Before you think about scaling anything, it’s crucial to gather insights on what’s already working for your existing business model.
Fortunately, there are tools that make gathering this data much more effortless. Taking advantage of marketplace management platforms and software can give you an accurate idea of how your white-label products are performing, alongside actionable data for their improvement.
Monitor consumer trends
It’s challenging to account for what customers might want. According to Forbes, “increasing customer expectations” are some of the most pressing concerns a business will face moving forward. While the specific section focuses on customer experience with a brand, white-label businesses will also need to meet their customer expectations to scale successfully.
It’s not just a question of looking for what people want, either: with enough data and time, you can reasonably predict what the “next big thing” may be. Again, marketplace management software can be a great place to get these insights, but you can also simply pay attention to trends in general.
Improve your product experience
By its very nature, white-label products don’t need much improvement—it’s in branding and marketing where they’re set apart from competitors. However, that doesn’t mean a business can’t make minor adjustments to the product for a better customer experience.
These changes aren’t limited to the actual product itself: making changes in customer experience also includes interacting with your customers or adding additional content to your product before handing it off to Amazon’s fulfillment centers. Do as much as you can within the limited time you have in preparing your product, and it’ll make a significant difference in how well it’s received.
Optimize how your customers see your Storefront
Your storefront is one of the first things your customers will see when they interact with your brand, so it’s essential to make sure they have a good impression. FeedAdvisor’s 2022 Amazon Consumer Behavior Report found that roughly 75% of Amazon buyers check out a page’s prices and reviews before committing to a purchase.
You can do plenty of things to improve your storefront, but one of the most crucial things is to make sure your reviews are good and that any concerns are publicly addressed. While Amazon may not have the same systems that other eCommerce websites have to deal with negative feedback, the fundamental principles of not getting negative reviews remain the same.
How Will I Know If I’ve Succeeded?
We dive into whether Amazon FBA is a worthwhile investment in another post, but the best indicator for success with your white-label products is profit. If you’re getting consistent sales that exceed your operational costs, your business is in a good place.
Just remember not to be complacent—Amazon is highly competitive, and a business seeking profit should always stay ahead of its competitors in whatever way possible. Whether that’s having access to more data, better branding, or improving product quality, success as an Amazon seller is determined by how dynamic your business is when handling changes and growth.
Tools And Resources For Amazon FBA White Label Sellers
Arguably, white-label sellers need far more market insight about their performance and their products: it helps them innovate, stand out from other white-label brands, and grow their business. Here are some of the tools and software that sellers can use to gather valuable information about their FBA business:
Amazon Seller Central
While Amazon Seller Central is a requirement for any business to start selling on the Amazon platform, it isn’t limited to simply being a seller account. You’ll find several features on Seller Central that can help you supercharge your business.
There’s the Amazon Selling Coach, which monitors your inventory and sales to identify business opportunities; A+ Content Manager for optimizing your listings; and the Seller University library for giving you the lessons you need to start as an online seller.
Threecolts is a marketplace management platform that can be customized to help any online seller optimize their business operations, track their growth, and ultimately succeed as an online retailer. With different applications and solutions, you’ll be able to micromanage your FBA business based on actionable, real-time, and valuable insights.
Some that specifically help FBA sellers include SmartRepricer for automatic repricing of your products based on market conditions, ChannelReply for organizing order data and responding to customer inquiries, or SellerBench to improve your profit recovery drastically.
The Threecolts platform is continuously adding more features that aim to help online sellers even more—and for FBA sellers, to give them the crucial insights they need to make the best decisions possible. User-friendly and valuable for customers and sellers alike, it’s a platform that can help any FBA business succeed.
Helium 10 is a comprehensive platform designed to help sellers get an overview of every aspect of their FBA business. With features like email automation, inventory management, listings optimization, and SEO support, it aims to offer end-to-end support for any seller looking to make a profit.
However, its vast suite of features can take some getting used to—and it may be slightly overwhelming for white-label sellers. It can help you find trending products you can sell easily and support them with its in-built marketing tools. But the learning curve required to learn (and use) the platform may not always be something you’ll have the resources to invest in.
AMZ Tracker has been one of the mainstays for Amazon Seller tools as a reliable way to optimize sales generation. It’s a tool that focuses on helping you optimize and keep track of how your products are performing, and it does so without too much technical know-how required for users.
Its effectiveness has dropped somewhat since Amazon’s policy changes for product reviews. However, it’s still an excellent option for sellers who are only starting with a few white-label products. Its features are basic but still, get the job done, and it can help you launch other products you want to sell fairly quickly.
Suppose you’re looking for additional support in starting your FBA business. In that case, Viral Launch can help you find the products that can sell, connect you with reliable sources, and optimize your listings for greater visibility and profit. While it’s admittedly far more useful at the beginning of an FBA business, it still helps long-term, especially if you’re familiar with how to use its features.
Viral Launch also comes with other data to help you run your business, but for those wanting to launch a white-label product quickly, its core features for product launch will be of great value. This tool works well for businesses that want a competitive tool to get ahead of their peers on Amazon.
White-label Amazon FBA sellers can use any of these tools to help them get ahead of their competitors and act on valuable data. Still, they also help make the actual day-to-day operations of your business much easier.
Improve Your Sales With Powerful And Flexible Seller Tools
Between the versatile sales opportunities of selling white-label products and the effective support of Amazon’s FBA model, online sellers can survive—and thrive—in the platform’s competitive space. If you’re interested in how to improve your business even more than the information in this guide, try Threecolts today. Enjoy expert advice, actionable data, and comprehensive overviews of everything about your business and what makes it work. Click here to see the full suite of the different features and services you can choose from.
Source from Threecolts
The information set forth above is provided by Threecolts independently of Alibaba.com. Alibaba.com makes no representation and warranties as to the quality and reliability of the seller and products.