Launching a private label product on Amazon can prove a money-churning venture, generating millions of dollars within the first year. But, an ever-increasing competition in this line has eaten the cream of the space, making it difficult for people to gather the confidence to launch their label successfully. Although, many studies have been done to see how much you can make as an Amazon seller. But, it is crucial to bring awareness to people about the cost of launching their private label on Amazon.
The Cost Factors To Launch A Private Label
This section will cover the inescapable costs that a person must pay to launch their label.
Product Cost (Landing Cost)
Product Cost refers to the price of a single product. Going for a low-priced item in choosing the first product is highly advisable. For example, you are selecting a product sold for $25 or less. The landing cost is calculated to be 20%-30% of the selling price paid to the manufacturer. Negotiate the product sourcing price with the manufacturer and concur to the minimum order quantity(MOQ).
The shipping cost is ascertained based on the weight of a single unit, the mode of transport ( flight or by ship), and the final destination (port, door). Usually, the shipping cost varies from product to product based on these factors; usually, it is $0.5-$2 per unit.
Monthly Fee Of Amazon
When a seller registers themself as a Professional on Amazon, it comes with many perks like the freedom to run ads on the platform. The pro account costs $39.99 a month, but the price differs from country to country.
In a bid to start their label on Amazon, people are supposed to buy UPC barcodes from GS1 or a UPC reseller. One can use websites like Speedy Barcodes or Nationwide Barcode for affordable barcode resales.
It’s recommended not to put all eggshells in one basket and always ask for a sample to check the delivery speed before starting an exorbitant investment.
Product Research Tool
Sellers often use product Research tools to gauge and understand which products have bigger sale potential and which products are in most demand and with lesser competition. It can also give you a ballpark picture of the kind of prevalent competition in the product they want to sell. Jungle Scout and Viral Launch are two of the most popular product research tools.
Costs of Photography
Most Amazon sellers make the error of clicking images of their products on their own, which more than often lacks the professional touch and looks dull and distasteful. Hiring freelance professional photographers is a good and money-saving exercise; it charges up to $20 per picture.
Logo and Packaging Design Costs
This responsibility can be left on the manufacturers. But if a seller wants to establish a long-running brand, they can hire a designer to create a branding logo for them, which costs around $30-$300. The price depends on the logo’s intricacy, detailing, and complexity.
Launching a private label on Amazon is not a child’s play. But with good research, market aptitude, and negotiating skills, a seller can successfully establish a professional brand.