Today’s post will be a little bit different, as it is a guest post from Brent & Laura Carr who are fellow sellers that I have met in Minneapolis. They started off in the retail arbitrage business model, and recently transitioned over to private labeling their own products on amazon. As mentioned in my past couple of results posts, I have been working on private label as well, and should have my first private label product live on amazon this month. Brent & Laura are further along in the process however, and are seeing some good success in their first few months. They were willing to do a guest post sharing some of their experiences, as well as some of the differences between retail arbitrage in today’s post. You can expect some more posts about private label here over the coming months as well.
Take it away Laura:
A few weeks back, Brent + I had the fun opportunity to swap seller success stories over steak with Ryan Grant of Online Selling Experiment. 🙂
Besides being a generally cool guy, Ryan’s running a killer Amazon FBA operation. In his mid-20s, he’s already been able to quit his corporate accounting job, hire a couple part-time helpers, and make his full-time living off of Amazon doing primarily “retail arbitrage” where he buys discounted products and resells them on Amazon.
We first got in contact with Ryan when we were doing retail arbitrage through Amazon FBA, which was a great on-ramp to what we do now — which is private label our own brand of products. Sounds like Ryan’s looking into this as well, so we thought we’d offer up some insight into the private-label side of Amazon selling.
PRIVATE LABEL AMAZON FBA… IN A NUTSHELL…
Private labeling for Amazon FBA means you sell (existing) products of your choosing, under your own private brand (label) on Amazon. After studying a product/market, you contact product suppliers/manufacturers directly, and they make the product for you, in bulk, at cost, under your brand name. They then ship the product, ready to sell, to Amazon. Assuming you’ve done your part in diligent research and strategic polishing, your product sells insanely well, and you hardly have to lift a finger… except to type.
All the work can be done from behind your laptop or mobile device — that is, from your location flavor of the day (coffee shop, kitchen table, Bahamas, desk job, etc).
DIFFERENCES BETWEEN PRIVATE LABEL + RETAIL ARBITRAGE
What types of products does the FBA seller sell on Amazon?
PL: Repeat sales of the product(s) of Seller’s own brand
RA: Sales of all different types, varieties, and brands of products
Where does the Seller find/get/source the products they FBA/sell on Amazon?
PL: Seller’s order placed directly with a manufacturer — for the product(s) Seller chooses to private-label
RA: Seller’s ongoing effort at finding deals and making purchases via various online, warehouse or retail locations
What takes bulk of Seller’s time/effort?
PL: Seller puts an initial (one-time) effort into:
- Picking product/supplier
- Launching brand + product
Seller puts some continual effort into
- Managing inventory
- Providing customer service
RA: Seller puts continual effort to:
- Finding deals
- Making inventory purchases
- Prepping, packaging, listing, shipping items
- Managing inventory
What determines quantity of product units Seller can purchase?
PL: Seller-defined budget
RA: Product availability + Seller-defined budget
Who preps/packs/ships the products to Amazon?
PL: Manufacturer (…or you, the Seller, if you really want to)
What’s the potential risk if product doesn’t sell?
PL: Medium-High — assuming Seller investment is usually in a large quantity of just 1 type of product
RA: Low — assuming Seller investment is diversified across a large variety of lower-priced products
What’s the income potential?
PL: High — low inventory per-unit purchase cost, Seller sets (his/her own) profit margins + operation is largely scalable. Seller is building a legitimate business selling products of a brand he/she owns, simultaneously creating brand value that could later be sold.
RA: Limited — variable inventory per-unit purchase cost, variable profit margins, ability for other Sellers to undercut price + operation has limited scalability due to time and effort. Seller is just reselling other brands.
MONTH 2 SALES CAPTURE FOR 1 PRIVATE-LABEL PRODUCT
Our actual profit margin: 50%
BRENT & LAURA CARR
come from modest roots in small-town SD & MN. They both value quality time together and shared life experience over canned job titles or salaries. They put their inner entrepreneurs to work, vowing to work smarter, live harder, and thrive together by working for and with each other.
Family, friends, colleagues and strangers started asking questions on how they too could get started in Amazon FBA selling. And so, Brent & Laura started The Thriving Couple, where they coach other local everyday entrepreneur couples on how to grow their own business of private-labeling products to sell on Amazon.
Header image courtesy of Franky242 of FreeDigitalPhotos.net
Thank you to Laura & Brent for sharing their experience so far with their private label journey. If you have any questions for them please feel free to check out their site, or leave a comment below. Thanks for reading!