If you're reading this in 2017 or later, please keep in mind that a lot has changed in the world of private label. You can have a look at my recent articles to see what i think about that. But by all means, have a read of this to get a feel for the process.
Also, if you are starting out, this article here is another up-to-date detailed guide on how to start an amazon business.
1: Choosing a course
I bought the Proven Amazon Course along with Tom Freeman’s Proven Private Label course (PPL is now a part of PAC, at the time it wasn’t and I didn’t want to wait).
I went for this course because I didn't have the money for ASM and felt like PAC was the next best thing. I wanted something with community support. I didn't want to figure things out on my own any more and paying a couple of hundred bucks was more than worth it to me.
2: Learning and applying
I blasted through the PAC course as quickly as I could and used the product calculator scorecard to decide on the product I wanted to sell, which is one of most important pieces of the puzzle (although in hindsight, I didn't have much of an idea what I was doing).
My criteria were fairly standard and my golden rule was: the item must be lightweight, fairly small and sell for at least 15 - 20 dollars with a supplier cost of no more than 5 dollars (excluding shipping).
Firstly, I thought about things I know about or am interested in, then I thought about products related to those categories, then I checked those products on amazon. I also looked through the top 100+ selling categories on amazon for ideas. I made a short list of 9 or so possible items that I put in my product scorecard.
I was looking for something with decent rank, reasonable competition (for example avoiding niches with multiple competitors with 1000s of reviews) that I could make my mark on and grow a brand around.
So for example, I wasn’t interested in things like mobile phone cases and gps car holders because I felt it would be hard to build a brand around those items. Contrast this with, say, yoga mats. People are passionate about yoga and you can easily build a brand around a passion for. Plus, yoga products can be bundled, think mat and bricks, yoga starter kits and whatnot. The only downside is the competition is fierce.
After drawing up my list, my final decision came down to economics. What were the costs per unit from Chinese suppliers? I found some good items, but the unit cost from China was $5 and similar units were selling for $15-20 on Amazon. I needed a larger margin and lower startup costs.
Once I was decided on what I wanted to sell and build, I immediately went to wix.com and built a fully functional e-commerce site. You can use wordpress.org if you like, it’s a great platform and everyone loves it, but I personally am most comfortable using wix - this site is on Wix. It’s not suitable for a lot of types of sites, but for my brand site e-commerce store it was fine.
Generally speaking, you don't need a site until way down the line, but it was something I decided to do earlier for social proof for the brand.
Then I went to fiver and got my logo designed for around 40 dollars along with the correct file formats and, most importantly, the vector file (the vector is what suppliers need to slap your logo on things).
Then I whipped up a facebook group for the brand that I would return to later.
At this stage, I also found and bought a private label book related to my niche that I used as a free giveaway. For this, I set up mailchimp and a landing page on the website (only visible with the link). When people receive their package, they find an insert with a thank you note and link to a free ebook as a thank you.
3 Finding a supplier
Once I was happy with my chosen item (small, light, can build a brand around, ok, but small-ish margin), I started looking at suppliers on alibaba. My main focus was suppliers that had been selling there for a few years and had a gold rating, accepting paypal was a bonus.
I was looking at the ones that had good unit costs with lower MOQs, we’re talking no more than 500.
I found a supplier and we started talking and I arranged for a sample to be sent to me via EMS in Moscow (I’m not Russian myself, I’ve been there for years though, but that’s another story).
Two sample units cost $75 and arrived within 3 days. The samples were good and I was ready to move forward with my first order.
ATTENTION: MISTAKE NUMBER 1
The supplier page listed the MOQ as 300, but when I asked about getting a 300 batch sent to me, they said 500 was the minimum. Still reasonable, but alas, not for my flaccid shoe string budget. I should have established the moq in stone before I even got my sample! Live and learn.
Finding another supplier
This time around I used the 'find a supplier' form on alibaba to drum up some offers. Most of them happily ignored my criteria and I didn’t pay attention to the ones who hadn’t been selling on alibaba for long.
I got talking to one supplier and, wow, their English was so bad that communicating things was a nightmare. It was so bad that I gave up on them. Communication needs to be solid, otherwise they might misunderstand me and I'll end up getting something I don’t want.
Fortunately, one of the other suppliers had pretty serviceable English and great response times – two very important factors. I checked out their factory online, did a bit of due diligence and started firmly: I am testing a new product and, to start with, if I’m happy with the sample, I would like an MOQ of 300.
They agreed to this and then I ordered my next sample: 10 units, EMS to Moscow $250 (because they needed a new mould hence the extra expense).
As bad luck would have it, my timing coincided with Chinese New Year, so I had to wait about 3 weeks for the suppliers to come back online and for my order to actually be made.
4 Paying the supplier
For the actual order, I paid via bank transfer, a standard SWIFT payment from my UK account to the Chinese bank.
ATTENTION: MISTAKE NUMBER 2
Thanks to my lack of detail, I got the Chinese bank account number wrong, by missing a digit, so after two more weeks of waiting and getting lots of concerned emails from my Chinese supplier, I was informed that the payment had been rejected.
My supplier actually noticed on the receipt I sent them that I had made a mistake with the account number.
Instead of waiting for the money to be debited back to my account, I immediately sent another payment and it was with them the next day. At this point, I was sick of waiting, spinning my wheels endlessly, not getting anywhere.
They got the money and we moved forward.
5: Going into production and shipping
Now the money was with the supplier it was time to get going. I needed 300 units, at $2.50 each to be made with my logo on and some bare bones packaging (again, budget), then the units would be packed two in a box, so 150 units ready to ship.
Shipping: Because the overall costs came to $750 and the unit cost was low, I shipped via TNT (my supplier had a decent discount with them). Shipping by sea is the way to go for larger shipments.
6: Other preparations
Getting my product images and descriptions ready.
Since I didn’t have the actual unit with the logo on, I had my supplier send me some pictures of the ready units. Pictures were fairly awful, but not critical. I found a 3d image designer on Fiverr to create 3d images of the units. This cost around 30 dollars and I was absolutely over the moon with his work.
At this point, I also wrote my product description according to the template proved in the PPL course (since then, I've done so many that I offer it as a service to clients).
I ran some facebook ads for my brand group to actually get some people in there, purely for social proof purposes. A brand with 4 people in its group doesn't look good.
I then sat down and planned a few weeks of content and set them up on a schedule. This was done so that, when people look into the brand, they will see and active group, with regular content and plenty of people.
7: Goods arriving to the UK
Since I’m not based in the UK, I needed to get my goods sent to a prep and shipper. I went with fbaprep UK, We aren’t exactly spoilt for choice in the UK so it didn’t take me long to decide on who to go with.
Once they had my stuff and checked it all out, they printed and put my inserts into the packaging too for a small extra. They were very flexible.
8: Re-registering Creating my listing
ATTENTION: MISTAKE NUMBER 3
This mistake was more of a little blast from the past. I started creating my listing and realised I had the wrong seller central account when I saw the price was in dollars. Yet another face palm moment.
So, I re-registered on amazon.co.uk and set up my account and created my listing. I downloaded the necessary labels and sent them, along with my barcode (which I got from barcodelove.eu for like 5 dollars) to the prep and shipper.
ATTENTION: MISTAKE NUMBER 4
This mistake wouldn't bite me in the butt until launch, but it was the worst mistake I made. I didn't register as a business and amazon suspended me for it later. (I wrote all about it here). Do yourself a favour, get set up as self employed or an LLC before hand. Registering as a sole trader in the UK took literally 10 minutes online.
Unrelated to my first suspension, my seller account had been restricted almost the moment it was created, even though I was yet to do anything.
I figured it was to check my information. 3 days passed and nothing. Contacted seller central and got bounced around a bit, sent in some copies of my passport, driver's licence and a utility bill to help speed things along.
A few more days of nothing. So I email again, except I had emailed the US seller query!
After sending more messages, I kept getting responses from seller central US. Eventually I figured this was because of the email I was sending from.
Because I was sending them emails from my account tied to my (now downgraded) US seller account, I was getting US support. A simple e-mail from my UK-linked e-mail and all was right again.
So after another 10 days of limbo and frustration, I was finally live on amazon, although not for long (see mistake 4 or check this post for the full story).
9: Product and promotion
To start with, I gave away some units away to get reviews, ran some facebook money off promotions (fyi they didn't seem to be very effective) and I e-mailed influencers in my products niche (sadly there are very few in the UK, this would yield waayyy more fruit if it was in the US).
Then I got suspended for over 2 months (see mistake 4 or this post).
Once I was finally unsuspended, I had 8 reviews and started amazon ppc - one auto campaign (to see what keywords amazon might find) and then one manual campaign at £10 a day with my selected keywords.
After a week, I took all the keywords that were performing well from the auto campaign and added them to my manual campaign (and removed the other words that weren't performing).
PPC has been the only thing driving sales. In my first 'real' 15 days, I got 48 sales, averaging 3-5 a day which I'm pleased with so far.
Since this first post a lot has happend and a lot has been learned! I wrote an 80 page Ebook detailing every single step of the private label business model (you can see it here) and I also just recently finished a book all on Amazon PPC (here).
I also canned the product you were reading about here. Here's the reasons why, along with what I learned.