So today, I wanted to talk about the real costs of getting started with a private label product - everything from samples to import to prep and shipping. This is a total breakdown of my first product (including the courses I tool etc).
As an aside, if you missed it, I actually canned this product late 2015 - you can read all about it here.
Back to products, certain items will be more expensive and MOQs will vary, but I can at least tell you how much I spent up to the point of actually getting my product selling.
For another deeper look into understanding costs for a first product, check out my article on Crunching numbers.
So, with that said, let’s get into it:
Proven Amazon Course: $250 i believe ( i can’t actually remember exactly and this was before a 2015 price increase)
Proven Private Label course (bought separate with the pac discount, was $150 i think)
Sample 1 - 3 units free, $75 dollar delivery
* supplier moq was too high so moved to new supplier
Sample 2 - 10 units, custom size (extra cost for new mold) + delivery - $250
Wix.com e commerce package site: 65 UK pounds or there abouts ($100)
Logo: paid about $30 on fiverr, was very happy with result
3d images: $40 on fiverr, again, was very happy. glad to recommended the guy too
Initial order of 300 units, 2 per box - $750
Delivery to UK: $550 via TNT
Prep and shippers: £75 ($117)
Import duty: £70 ($109)
$2421 (£1551) or just about $2000 (£1280), minus the cost of the courses I purchased.
You don’t have to buy courses, although for me, the cost was worth it as I have gone it alone before and made costly mistakes (and I still made plenty, even with the course).
In any case, to me, these things are an investment in my education and it is still way cheaper than going to a college!
If you are the kind of person who has that weird pride in not paying for courses, that thinks, 'ha, suckers! I can learn that online for free!' I would argue that your way of thinking about money abd value is slightly of kilter, BUT, you can of course learn for free (and this is coming from someone who self taught himself Russian).
The best free resource out there is theamazingseller.com - All Scott’s information is detailed, actionable and solid gold. I dare say it’s the best amazon private label resource on the web.
Getting into this business is (relatively) cheap and it works, if you're smart about it
This is not some internet marketer BS hype. I spent a couple of thousand dollars and I have a real, scalable business. I've learnt so much that I also work with clients and partners too. Right now I live in Bulgaria (where the average wage is $200 per month) and Amazon is what feeds my wife and baby daughter (and chihuaua).
Think about how much the average business start up costs are and think about the kind of collateralrisks you have to take. You might loose your house or wife or more.
My previous online business flop cost me over $18,000 dollars to get going and it was a total disaster! I ran a supplement site in Moscow and made almost no sales whatsoever. I couldn't even sell the website I had personally project managed and designed and spent hundreds of hours translating contet for. It was my baby and it went down the toilet - hard.
Meanwhile, in the first 24 days of my eventual flop product being live on amazon.co.uk (which isn’t a patch on the US traffic) I had almost sold out.
If you have a current job and make a reasonable salary, you should be able to get something like this started on the side, and hey, you could even afford to fail a few times.
So how long does it take before the sweet sales dollars start rolling in?
This will depend on how long your product research takes and how many things come up along the way. In my example, I could have been operational within about 3 months, but, because of some of the setbacks and mistakes I made (which you can read about here), the whole thing took more like 5 months.
Your first batch will also net you less profit as, if you’re doing things correctly, you’ll be giving away units for reviews, so keep that in mind.
But generally, even without reviews, you should start seeing sales right away. I waited to get some reviews in, then turned on ppc and the sales started the same day, then increased as I refined my keywords.
You should only have trouble making sales if you have unknowingly chosen a super competitive niche / low depth niche. One of the many problems with these types of nieche (think supplements) is the cost of clicks will be much higher and your conversions may suffer.
So to sum up, sure, you'll probably be putting away about 1000 dollars per 150-200 test batch of units with delivery. But, that is perfect for testing.
This isn't an easy online money making scheme and it takes work, but if you want to escape the cubicle, I advise you give it a try!