Tip #1 for private labeling on Amazon FBA: Look for items that have healthy competition 

When we tell people to look for items that have high buyer demand but low seller competition, people mistake that and think we are suggesting that they look for items that have no other sellers in the marketplace. But this is a mistake for 2 reasons: 

1) It gives you more information to work with. When an item has pre-existing sellers, you can track their sales and see important data trends. For example, you can see if all of the sales were dominated by a few sellers, or if it is split amongst multiple sellers. This is important information, because if only a few sellers are dominating the sales, then we know it is a brand-driven market and it will be difficult to break into. Whereas, if the sales are split more evenly amongst multiple sellers, then we know that there is room in the marketplace for multiple competitors. 

2) Having multiple sellers in the niche means that they will be attracting customers to Amazon already. This gives us the opportunity to come in and steal the sales away from them! 

In our video tutorial on Jungle Scout, we recommend using the Jungle Scout Web App to search for products on Amazon’s database that are selling 300 units a month, while only having 50 reviews or less. 

Tip #2 for private labeling on Amazon FBA: Choose simple products 

Choosing simple products that have less potential for headaches is what we recommend to beginners who are picking a product to private label for Amazon FBA. Here are things that you should avoid:

1) Avoid products that have easily breakable parts, such as electronics. Part of why Greg chose to manufacture bamboo sticks is that even if there were mistakes in the manufacturing process, the customer would not notice and the products would still work. 

2) Avoid products that are big and heavy. Focusing on small and lightweight items makes them easier to ship and to handle inventory. 

3) Avoid items that are licensed, such as items containing pictures of mickey mouse, as this will get you into legal problems. 

Tip #3 for private labeling on Amazon FBA: Be prepared to sell products you aren’t passionate about

Sometimes, the niches we are interested are saturated, or that don’t have products to manufacture that are suitable. Be prepared to look outside of these niches. When Greg chose to sell bamboo sticks, he wasn’t particularly passionate about them - but he knew they made money, so he chose them.

Tip #4 for private labeling on Amazon FBA: Avoid seasonal products

It’s a lot easier to focus on items that have constant, on-going demand so that you can have regular cash flow throughout the year. For example, christmas lights are going to have a huge spike at Christmas time, but throughout the rest of the year sales will be very low. 

To check if an item you are thinking of selling has only seasonal demand, use Google trends to track how often an item is searched for over the year. 

Tip #5 for private labeling on Amazon FBA: Look for items that have a higher price point 

Amazon has will charge you two types of fees:

1) A variable percentage-based Amazon fulfillment fee
2) A fixed pick-and-pack fee

While the variable fee will increase as your price increases, the fixed pick-and-pack fee will not. This means that as the price of your product increases, your profit margins exponentially increase as well (and inversely, as your price decreases, your profit margins exponentially decrease). That is why I usually recommend looking for aiming for a price of at least $15 so you’re paying no more than 35% in fees per sale. 

Tip #6 for private labeling on Amazon FBA: Don’t follow your gut

Sometimes in marketing/sales, following your gut is the way to go. But when it comes to investing your money in purchasing products, do not follow your gut, as you will risk losing a lot of money. Go with the safer option of making data-driven decisions.