Passive income ventures are a hot trend, but setting up a revenue-generating business without draining your time and energy is no easy feat.
But it is possible! If you’re the kind of person who visits the ‘make money online’ blogs, you’ve probably heard of private labelling as a path to profit. In simple terms, it means finding a manufacturer’s product you want to sell, tweaking it a bit (including adding your brand name) and then selling it as your own. Further, programs like Fulfillment by Amazon have made this process significantly easier (and much more passive) by handling things like storage, shipping, sales and even customer support.
Identifying the Right Product
Private labelling a product is not necessarily hard; the key is finding the right product. Here are some helpful guidelines:
- Products that are smaller than a shoe box are cheaper to ship, especially if ordering from international factories or shipping to customers worldwide.
- Avoid items that have liability issues, such as electronics, easily breakable items, explosives etc.
- Focus on a category with minimal competition. You can use tools like Jungle Scout to find profitable product ideas.
- Prioritize categories with market depth and that aren’t so niche that you will have few buyers.
Finding a Supplier
Finding a great supply partner is just an important as which product you sell! They are the ones who will ensure quality and timely deliveries. For better profit margins, you may want to get your products from international B2B suppliers such as Alibaba, Global Sources, or Aliexpress. To avoid a manufacturing learning curve, you can partner with a sourcing management companies, but note that they would take approximately 6-15% of your total purchase order amount as service fees. For some people, the hassle-free experience is worth it.
When reaching out to new suppliers, don’t purchase in bulk immediately. Get samples first! Once you’ve approved the samples, negotiate the required minimum order if it seems to high. It’s common for a supplier to advertise an MOQ of 500 units but agree to sell you 250. Starting smaller in the beginning can help minimize your risk.
Once you’ve placed your first order, you’ll need to ship your products to a warehouse for fulfillment and choose a selling channel. If you’re using a site like Amazon, you’ll create product listings with keywords so that customers can easily find your product. This is where the money is, so be sure to do it carefully! Pay attention to traffic daily, and make tweaks to your listing based spikes or decreases in traffic. If you are selling multiple styles or choices of an item, you can test alternate product descriptions and keyword strategies to see which is most effective.
Finally, don’t be shy about investing in paid advertising on the platforms where you’re selling! This can help gain visibility and get reviews, especially while you’re building your sellers reputation.
About the writer
Sarah Kaiser is a digital marketing manager at Casino Global Sourcing, the sourcing division of a French retailer Groupe Casino. Godirek.com is the product catalog of Casino Global Sourcing, which offers helps and tips from product sourcing, cost saving to sales boosting for Amazon third party sellers.