Want to get a plan on starting your next project?
In August, we start our new course, The Former Amazonian’s Beginner’s Guide to Private Label Branded Products.
In this course, you’ll be learning how to select a product, get samples from a factory based in the US, approve samples, negotiate your first PO, handle shipping arrangements for your purchase order, and create and market your new product.
But before we get to that, let’s go into why we’re sourcing in the US for our beginner’s guide – a few years ago, new sellers on Amazon could buy products on Alibaba, relist on Amazon under their own brand name, then sell the product as a private label product. Building a business this way is now quite a bit more difficult.
In addition to the challenges inherent in a “China arbitrage” model, there’s the long lead times, the challenges in monitoring quality and compliance in production, and the lack of ability to visit your factory and see first hand what’s happening on the ground.
Sourcing abroad, typically China, should always be a beginner’s second step, not their first step. Learn the steps you need to be successful with a low risk, small order from the US, establish some cashflow in your business, and then scale with the larger factories in China with the success you’ve achieved domestically.
Download your Guide to managing your Supplier
Everything you need to protect your investment and business when sourcing your own products!
What is the typical product available for sourcing in the US?
Typically, you can source a variety of products in the US as a beginner: off the shelf supplements, various types of skin creams or cleansers, and cut and sew textile products.
While you can source molded plastic and custom molded metal parts in the US, the cost of the mold is significant, and in many cases, the construction of the mold is actually outsourced to China!
Therefore, for beginners, we typically recommend starting with products that are off the shelf from large manufacturers that can be easily private labeled, or custom designed cut and sew products that can be produced in small quantities.
As a small business owner, you always need to focus on the bottom line, and maintain careful control of your cash flow as you grow.
Supplements are one of the easiest ways to get started on Amazon. People take a lot of them, they run through them in 30-60 days, and with a private label program, you can get a new product up and running on Amazon within 60 days, without much effort.
However, this also makes it one of the most saturated markets on Amazon, with thousands of sellers in supplements. Further, the cost to even be approved in the supplements category is $5000, making it a significant barrier to entry for most sellers.
Much of skincare is available to private label – moisturizers, cleansers, eye creams, anti-aging creams, acne treatments, and so on.
Much like supplements, though, this space is highly competitive, with so many sellers offering their variations of popular products. Moisturizer alone has thousands of competitors. The cost to compete in this space is significant, and I only recommend it if you have some sort of major differentiator in your product portfolio, not just private label products.
One great part of skincare, though, is the amazing margins that you can achieve once you’re more successful.
Tackling Cut & Sew
Cut & Sew textiles can refer to a broad variety of areas – home textiles, such as curtains, pillow cases, couch covers, or laundry bags. They could refer to apparel, such as blouses, t-shirts, undergarments, or outerwear. Or it could refer to other items around the house like towels, sheets, bags, or other decor items.
Cut and Sew is attractive for a beginner because often the MOQs are quite low (minimum order quantity) making the total investment also quite low. In addition, there is a huge variety of products available to choose from, all of which simply require excellent marketing to gain success, as many parts of cut and sew are only moderately competitive, as compared to supplements or skincare products.
We'd love to see you there!
We would love to have you join our course! We have been developing our own products for years working at Amazon on Amazon’s own brands, developing camera bags, children’s clothing, adult clothing, home textiles, and more, and also developing hundreds of products in our time working with clients of Cascadia.
We would love to help you realize your dream of starting a viable business on Amazon, in a sustainable way that recognizes the limitations of your cash flow and your long-term goals.
Would you like to hear more about the Beginner’s Course?
- The Critical Metrics You Need to Know for Evaluating Success of Amazon Marketing
- How Fulfillment By Amazon Can Change Your Business
- Using Amazon Advertising to Increase Revenue and Gain New Customers
- How to Sell Wholesale as a Reseller on Amazon
- What do you need to open an Amazon Seller account in 2020?