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Amazon private label is something I’ve had my eye on for years. A little while ago, I fell down a Youtube rabbit hole, and came across Tatiana James, Dylan Reed and Jonny Bradley, where they all swore by Amazon private label as a means to create your own brands, give up your 9-5, and live a life of financial freedom.
Within a couple of hours, I was sold – private label was going to be how I would secure the lifestyle I so longed for.
The only problem was, I didn’t have any spare cash leftover from my barely-average wage to invest in the business model, so I knew I was going to have to side hustle to raise enough money to start out with.
I started off by reselling. Books, clothes, Easter eggs, moisturisers, gnome fancy dress outfits – you name it, if I could get a profit from selling it online, I’d flip it.
Slowly my income grew, and as well as spending some of my takings on travelling, I put the rest aside for the private label brand I knew I would one day create.
Fast forward a couple of years later, and I’m thrilled to announce I’ve just completed my first full month selling on Amazon with my first private label brand, in partnership with my boyfriend!
During my many years of research, watching Youtube videos, reading books, taking courses and listening to podcasts, I never came across a blogger covering their own personal Private Label Journey, which is what I’m going to do here on Funding Her Freedom.
Each month, I’ll be breaking down my progress, the highs and lows, the lessons learned over the last month and any other take home messages that I wish I’d known when first starting out.
Whilst I won’t be sharing which products I’m selling, or even the niches I’m selling in, I will be as transparent as possible with costings, PPC (pay-per-click) ad spends, gross takings and I would be happy to answer any other questions you may have, where I can.
So let’s start at the beginning:
What is private labelling?
Private labelling involves finding a third-party manufacturer (often through the likes of Alibaba), who already creates and supplies your products – and creating a brand to sell these products under.
As the Private Label brand owner, you create the branding (often working with designers on Fiverr, Upwork etc), the overall product offering, the kind of packaging you want, and any tweaks you might like to be made to the manufacturer’s samples.
How do you find a product to private label in the first place?
Private label success is rarely based on gut feelings. Chances are, if you think of a product that you believe might work, once you drill the numbers, it probably won’t.
Instead, you’re best to use software which can help you analyse whether a product is worth pursuing or not, as it provides you with data such as the amount of times it’s searched for on Amazon each month, how much money competing products are making each month, how competitive the product is (for example, if all other competing products have thousands of glowing reviews, it’s probably not worth pursuing – unless you have a fair amount of budget to spend on advertising!) and how much the FBA fees cost.
Side note: FBA fees (or Fulfilled by Amazon fees) are those that Amazon charge a seller to fulfil the product sale. This means you can have your supplier send the units straight into Amazon warehouses, and Amazon will deal with the packing and shipping of the products once they sell, along with the storage of the products. You don’t have to opt for FBA, as you can fulfil the orders yourself, but for my personal business model, I want to be as hands-off as possible.
Which private label product research software is the best?
Personally, I swear by Helium 10, which is a particularly smart bit of software I would recommend to anybody embarking on an Amazon Private Label journey.
From helping you with product research, to allowing you to research competitors, identify keywords you should be including in your product listing, and then helping you with your advertising campaigns, it really is an all-encompassing bit of kit that is crucial to your success when selling on Amazon.
In addition, Helium 10 has its own training course included within their membership, TONS of useful content on their website, Youtube channel and podcasts, and have 24/7 support if you need anything else.
I’ve been using Helium 10 religiously for about eight months now, and whilst other software platforms out there exist, no other company offers as reliable a one-stop suite of products you need to succeed in your Amazon private label journey.
There’s so much I could write about Helium 10, and I will be sharing a lot more about my journey with the software in future blog posts, but it honestly is the backbone of our private label business.
What happened for us this month in our Amazon private label journey?
Well, November was a big month for us!
Our first private label product went live on the 3rd November, meaning people could purchase our product on Amazon from then. As mentioned above, we’ve opted for the FBA business model, meaning we ship the products into Amazon warehouses where they’re stored until they’re sold. Once purchased, Amazon then deals with the packing and shipping of each item to the customer.
We also launched two PPC campaigns (one automatic, and one targeting particular keywords) – which are basically advertising within the Amazon platform. If you search for any item on Amazon, chances are you’ll be met at the top of the page with a handful of products that are ‘Sponsored’. These brands have paid to have their product featured near the top of the page as a ‘sponsored’ product – which is exactly what I’m referring to when I say PPC.
We ordered a second batch of our products from the supplier. Launching so close to Christmas is a gamble in that we can’t predict how popular our product is going to be, so we thought we better play it safe and order a second batch so that we have it ready to go if it takes off during the festive period.
I’m also super excited to announce we ordered samples from three different suppliers on Alibaba for a second product which, if all goes to plan, we’ll be looking to launch in Q1 2021! This product is mostly being paid for through our various side hustles (matched betting, surveys, selling unwanted items from around the house) so the fact we’re in this position so soon after launching our first product is incredibly exciting!
What did we learn this month?
- Start an automatic PPC campaign first, before creating a manual campaign, so you can gather as much data as possible
In the first couple of weeks of our PPC advertising, we ran an automatic campaign to see what keywords people on Amazon were searching before purchasing our product. Once we had an idea of what it was that people were typing in to Amazon before hitting the ‘Buy’ button on our product, we were then able to start a second PPC campaign (with the automatic one still running in the background) that particularly targeted those keywords people were searching and purchasing through most regularly.
- Reviews take 24-48 hours to appear on your product listing (and can take a long time to receive!)
This is definitely an area we need to improve on, as we’d like to get as many reviews as possible! We’re currently stuck on seven reviews, despite considerably more unit sales, so for the next month or two, this is an area we need to look at.
We’re hoping that, once we have more reviews, the social-proof will be there for us to convert more viewers into buyers.
- Our next product needs to have a high search volume
In all honesty, our existing products’ search volume sucks (I’m talking 100 times a month!) If I knew then what I know now, I’m not 100% sure I’d have ever gone with this product in the first place, as the demand isn’t quite as high as we’d like.
For what we hope will be our next product (depending on how these samples turn out), we know it’s searched for over 20,000 times per month – so in theory, our sales should be considerably higher.
The Helium 10 Chrome Extension (which I use many, many times each day) can help you analyse how many times a keyword is being searched for, so is a metric we have been paying real close attention to when trying to select our second product.
However, despite the low search volume for our current product, I would say that this plays slightly in our favour – currently. It’s within a very popular, wide-ranging niche, and it gave us the experience of bringing a brand – not just a product – to market.
Swings and roundabouts, eh?!
- Air shipping is currently incredibly expensive because of Coronavirus and Brexit – and there are big delays with sea shipping
I know a number of High Street retailers are struggling with transporting goods across the world currently as there is a shipping container shortage, and huge delays on the oceans. For this reason, we decided to opt for air freight with our re-order of our first product – but boy, did we pay for it!
With the sea-freight hold-ups, Coronavirus issues and Brexit on the horizon, air freight is incredibly expensive right now – so be prepared if you’re trying to weigh up which way to ship your products over the next couple of months.
So, this is what we’re here for – what do the numbers look like for our first full month of selling our private label brand on Amazon?
Total (gross) sales in the first month: £321
Total units sold: 27
Amount spent on advertising (PPC) this month: £86.85
We’re currently making the most of an Amazon promotion, which gave us £200 in free advertising spend, so this £86.85 hasn’t actually come out of our own money.
Sales through PPC: £104.91 (note that this is considerably lower than our overall total sales, meaning more of our sales were organic than secured through our ‘Sponsored’ listing).
Return on Advertising Spend (RoAS): 1.21 (As a rule, you want this to be at least two or higher – ideally 4+. It in essence means that for every £1 we spend on advertising, we’re currently only making £1.21 in sales).
What are our Amazon private label goals for next month?
In December, we’re hoping to achieve the same (ideally more!) amount of unit sales, and a similar amount of advertising spend.
Our real goal is to increase the number of reviews we have, as we didn’t really want to start running our PPC campaigns until we had at least ten. Sheer impatience meant we ended up starting advertising before we had reached this number.
We’re also hoping to have confirmed and ordered our second product, with the view to having it with us by February. This product is in an entirely different niche to our first one, but again we have identified opportunities to expand the product line in the future, should it be a success.
Our goal in the next year is to be in a position to leave our 9-5s, and become entirely location-dependent. After a year cooped up during the pandemic, we want to be able to work a couple of hours a day (if that) from wherever takes our fancy.
But this goal means we’re going to have to seriously hustle. Hustle our way to build as much money as possible to invest in the business, hustle to find the next product to add to our portfolio, hustle to ensure our products are in stock, achieving regular sales and getting top-rated reviews.
Eventually (we’re talking a couple of years down the line here), we’d like to have somewhere in the region of twenty private label products selling on Amazon (and potentially on other marketplaces), each profiting a minimum of £1000 per month.
Rather than pinning all our hopes on one or two products, we want to diversify our portfolio as much as possible, and by staying in our 9-5s for at least another year, it means we can reinvest every single penny back in to the business (taxes aside).
It’s going to be a lot of work, but I’m looking forward to tracking and sharing our progress here – both in the hopes that it might inspire you to one day look into private labelling, but also for us to look back on when we’re van-lifeing our way around Switzerland working an hour or two a day…
As always if you have any questions whatsoever, please shoot me a message, a comment or a DM – I’m more than happy to help!