Well my motivation for this blog is to help others and my first private label product was a great learning curve (this is a polite way of saying I fu@ £*d up!)
So for those wondering what private labelling is, this is taking a generic product (e.g not ripping off someone else’s designed product) such as a hairbrush, dog bowl, coffee, protein powder, vitamins, you get me? and then applying your own brand to it.
So after 5 months of retail arbitrage and whole-selling products, buying quantities of 1 to 300 it was time to move forward and scale up. I was a little daunted by Alibaba (the marketplace to find manufacturers) the whole process seemed a little scary, but I was going for it, and looking back I wasn’t quite ready. I should have done more research and learning first, and took more time to find the right product. I totally should have got myself a mentor or invested in a decent course, but no I was going for it full steam ahead!
It’s a little tricky for me to tell you exactly what the product was, as I could be getting myself into a situation, this will perhaps become more clear why!
Ok so I came across a product that I felt would fit within a potential brand that I wanted to create and develop. I was even able to buy just 30 from AliExpress initially to test the market, and yes all 30 sold within a few days, even with terrible photos and a poor listing, with no customer reviews, I defiantly identified a great selling product or so I thought. AliExpress is a great place to source products in low quantities to test the market or build up a business on Amazon or an e-commerce platform.
I went through a check list I put together which scores items according to variables such as weight, size, cost, margin, sales rank etc (follow the blog, comment below and I will email this to you, although I’m not particularly selling my private labelling skills very well!)
So the product I identified had a sales rank of 354 within Kitchen and home, selling at around £25.00, the cost per unit was looking to be around $10.51 with other variables to add, shipping, customs fee’s etc.
I took the plunge and ordered 200, not too much of a disastrous quantity, my plan was after 200 to then purchase 500 then 1000 growing in a controlled manner, being the control freak I am!
So by the time the product arrived after being made then shipped (around 8 weeks) the selling price had considerably dropped from the £25 mark to around £15! Completely wiping out any profit margin. I think that with the product being quite new to market and a new trend, many others had jumped on the bandwagon, more sellers therefore competing for the same amount of customers driving down the price.
Devastatingly I had to now just focus on recouping as much of the money back I had invested! I did identify that the price was still a little better on Amazon France so I tried to sell them mostly through this channel. I was going to leave a few figures here of my sales versus costs and show you the nitty-gritty, but it’s quite painful, basically I lost just over £1000! In the words of Sir Alan Sugar “Your fired” but…
….It gets worse!
Then suddenly one day, once I’d sold 167 units, so around 33 left, I received an email from the original designers of this specific design informing me I was infringing their copyright agreements! I had to decide to remove my item from Amazon, even though I didn’t receive any performance notifications from Amazon directly about this, potentially I was putting my selling privileges at risk, I think that had I continued to sell the product this would have been the next course of action.
This is why I haven’t identified the product to you as this blog could be evidence for the original designer. you get me?
This is a key point to remember as part of your product selection, who has the intellectual rights to sell that design? Do your research ask your manufacturer for relevant copyright agreements, factor in this risk and learn from my mistake.
The other factor to learn from this is to be careful of new emerging trends, you don’t know who else will soon jump on the bandwagon and how long the demand for the trend will last and the price history data of the product.
Now fast forward to 7 months later and since my first private labelled product I have gone on to develop 6 others! one of them selling so well its achieved best seller status on Amazon, selling around 30 a day! More about this in next weeks blog, so don’t forget to follow!
Selling on Amazon is very much about having the right mindset, I didn’t let this throw me, I was moving forward and learning. So please don’t let this experience put you off, what I would say is rather than potentially loosing money on your first private labelled product, which is really quite common but not a lot will admit this, spend some worthwhile time and money on getting a mentor to help guide you, to hold your hand through the process, this is definitely my regret!
Since my first Private labelling disaster I identified I clearly need to be really on it when selecting the right product and I now use an application called Diggarr, Diggarr will guide you with real-time data showing you estimated daily and weekly sales, best seller rankings, total reviews and other critical decision-making information making the whole process much more straight forward with the correct data to make an informed decision you can be confident in. Its amazing value too at around £45 ($67) but this has saved me so much more, it has effectively paid for itself!
Click Here! For more information on this.
Also If you haven’t started selling on Amazon yet? why not? It really is an amazing opportunity to earn a lucrative passive income, this course is perfect for getting you learning everything you need to know and it is really cost-effective and worth every penny.
Don’t forget if you are interested in any coaching or get stuck with anything then get in touch I would love to help you x
P.S, if you liked this blog post, I would really appreciate it if you could share it through your social media, find the like and share icons at the bottom,. This will help in building up some traffic, thank you so much x MR PAUL.