If you’ve ever considered running your own online supplements selling business, Amazon private labeling might be the way to go. Ever since its inception in 1994, Amazon has been a huge marketplace for sellers of all types of health products to expand their businesses. In fact, next to Walmart, Amazon is the biggest retailer in the world. But you still might be wondering whether you should private label your own vitamins to sell.
What is private labeling?
First, it’s important you understand exactly what private labeling is. Private labeling is taking a product such as a supplement someone else manufactures and putting your own label, or brand, on it. This is, of course, referring to the legal act of private labeling with the manufacturer’s permission. To buy products and repackage them without permission would violate many laws, including copyright regulations.
These products are usually sold wholesale and made available to only a certain number of customers so as not to saturate the market. But the concept is not all that new. It might surprise you to know that many generic or store-brand products you buy are actually brand-name vitamins and other items in disguise. This is a common practice among grocers, health, and beauty supply dealers.
For Amazon sellers, sourcing products to sell consistently can be somewhat challenging. And some categories require “un-gating” to sell in them. For example, beauty products, at one time, were a gated category. And getting permission to sell these items required going through some tedious procedures. But the problem was that if you sold a bad product or got negative reviews, you could lose your status pretty fast. This is one of the reasons private labeling is a good idea. You have a consistently sourced product that is consistent for your customers. So, if you sell private-labeled vitamins, for instance, your client might be a neurosurgical office in Teaneck, NJ, who expects a certain quality with each and every purchase.
But the other reason private labeling works so well is because you have a steady source of product. This is good for business because you can more easily predict your sales. You’ll also be able to get a better idea of how much to order and how much to keep on hand.
Passive income strategy
Private labeling can also be a great passive income stream. For one thing, you can use the FBA (Fulfillment by Amazon) program to store and ship all your products for you. And you can sell anything from a private label supplement to customized wigs. All you need to do is receive the product, repackage it with your branding, and ship it off to your nearest warehouse.
But you can also sometimes have these products drop-shipped. This just means that the manufacturer ships each order to your customer as it’s received. That way you don’t have to mess with storage facilities or time-consuming shipping. Drop-shipping is a little less common with private- labeled products, but it can be done with certain companies. For example, photographers often use photo printing services that are happy to label their photo packages or albums with their brands and ship them to their customers. They’ll even use any return address you ask them to.
The main thing most sellers like about private labeling is that they can get much cheaper inventory. Whereas some sellers purchase products at a discount and mark them up to make a profit, private labelers can get them much cheaper. These items are usually discounted at the bottom of the pricing ladder, and you can buy in bulk to save even more. What’s more, you might can reap some of the shipping and tax benefits of the big retailers by receiving bulk orders.