3 Tips On Amazon FBA Private Labelling #Article

Taking into account the seasonality, and pick a less seasonal commodity if necessary.

For example, let's use a common item for the Amazon FBA and AliExpress-marshmallow bamboo sticks on dropshipping platforms. During the peak months in the fall season, they will sell around a thousand units per month. January and February are the slowest months, at around 3 or 400 units per month. It's not that seasonal when we compare it to, say, Christmas lights, which will only sell well for two or three months leading up to Christmas! That makes inventory forecasting very tough and damaging to cashflow.

Google Trends is a great free tool to test the seasonality of a given product or niche. It will show you how high this is in the peak months, and how sluggish it is in the low months.

Take Amazon FBA's set fees into account when pricing your product

I get quite a few inquiries from people asking me if I can contact them privately, the reality is that I don't have the time to do that so unfortunately I had to turn them down. Nevertheless, a friend recently approached me to let me know that her mother-in-law was effectively private labeling, and then using the Amazon FBA software to fulfill their orders, and she asked me if I could work for her. I wanted to meet her and give her advice about the product she was looking for to sell.

One of the items we discussed was that while she was sourcing her next product, she was going to have to find one, it had a higher average price point. You see, she was selling only ten dollars a unit for her first product. Clearly it would be good to sell a product at a higher price point simply because you get to make more money per sale but it's a little more complicated than that.

The Amazon fees were four dollars and 52 cents, leaving her with only five dollars and 48 cents to make the product, ship it to Amazon and sell it. She made a profit but just about two dollars was a unit.

The thing I explained to her was that if she raised her next item's average selling price, her income would rise exponentially, since Amazon has fixed prices.

You see, the $4.52 fee consists of two parts : the first part is the premium element of the Amazon Fulfillment-this is a charge that depends on the purchase price of the unit. It had a referral fee of 15 per cent for her element in that category, so she paid $1.50. But the second part is a fixed pick-and - pack price from Amazon, depending on your weight. In her case, she charged $2.99 as her element was the least account and charged a storage charge of three cents, and her net charge set was $3.02.

As she increases her price, the referral fee will increase but the fixed fee is not. I demonstrated to her that if she increased the price of her next product, the amount of money she gained would increase exponentially: at a price point of $10, she had a profit margin of 54.8 per cent after fees and a profit margin of $12 – she had a profit margin of 59.8 per cent and a profit margin of 64.87 per cent at $15 and she would not have been able to sell the item at a higher average sales price

In general, I recommend that you look for an item with a price point of at least $15 so you don't pay more than 35 percent in fees.

Be driven by data, not by "good feeling"

I can't recommend enough to make the business decisions based on results. When I talk to new sellers it worries me and they say things like: "My gut instincts tell me that this product is going to sell well or my buddy told me or my mom said she was looking online and couldn't find it."

Those are really risky pieces of advice to make profit-making decisions. Judge demand, and use hard numbers to rival. Jungle Scout and the free tools and resources make it no easier to make these data-driven decisions. Don't play your hard-earned cash – get away with the numbers.

Here are my tips to help you pick and sell the best product, using the privately labeled Amazon FBA system.

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