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fulfin - financing ecommerce January 17, 2020 2 Minutes
Categories: Ecommerce | Ecommerce Guide

Another trend in e-commerce that originated in the USA: private labeling. In short, this means selling products under one's own name. Especially in classic e-commerce, the market was long dominated by retailers who sold products from other brands. We have summarized here, why more and more Amazon sellers rely on private label products and how they differ from third-party products:

Private label products (own products)

Private label products are products that are only offered by one seller. This is either because the retailer produces it himself or (and this is usually the case) has an existing product slightly modified or simply printed with his own logo. This is then sold under the private label. In practice, the latter goes like this: An e-commerce merchant looks for a viable Amazon product. Once he has found this, he searches for suitable manufacturers (asking for a slight modification if necessary) and has sample products sent to him. If he is satisfied with the quality, he selects the right manufacturer, has the products printed with his logo and sells them as a private label product on Amazon.

We have visualized the exact procedure once again here:

PICTURE DRAWBACK

Being a private label seller has many advantages. As the owner of the brand, the retailer can determine the title, description, images and product information. Thus, the private label creates immense flexibility in terms of design. But also most of the work concerning the promotion of the brand.

Moreover, there are also differences in the optimization: In the case of private label (there is only one seller), the buy box optimization is superfluous. So the entire focus should be on ranking optimization to sell these products better. How this works, we have explained in this Post already summarized.

Third-party products

Selling third-party products (more than one seller of that product) on Amazon has different advantages and disadvantages. One advantage is definitely the lower effort, because no customization and no own logo is needed.

The most important difference between private label and third-party products, however, is not in the purchase of the goods, but in the marketing: For third-party products, the focus is not on the classic ranking, but on buy-box optimization. The buy box is the area on the right of the product page that contains the call to action "Add to cart". If you win the buy box, the sale of the products increases rapidly, which is why this area is so coveted.

To win the buybox, however, there are several hurdles to overcome. If you combine the following aspects cleverly, you have a good chance of getting into the buybox.

1) Recommended seller status

2) Very good customer reviews

3) Response time of the seller (answering requests within 24 hours)

4) Competitive (not the cheapest!) price

5) Few (max. 4 %) late deliveries

6) Preferred: FBA

In summary, it can be said that you can build a successful Amazon business with private label products as well as with third-party products. However, the main advantages of own products are the control over title, description, images and product information as well as the controllability of the ranking without BuyBox optimization. Ultimately, it is probably necessary to master (or at least understand) both if you really want to be successful on Amazon.

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