Private Label vs. Wholesale on Amazon
Private Label vs. Wholesale on Amazon
Welcome back to another eCommerce battle. This round is private label vs. wholesale on Amazon. You don't necessarily need to do one over the other, you can actually do both if you want. However, if you want to stick with one then keep on reading to help you make an informed decision on which you'd like to do.
As an FYI, regardless of the private label vs. wholesale on Amazon, you CAN dropship doing either or both.
So what exactly is private label? Private label is using a manufacturer's or third-party sellers generic products but re-marketing under your business/retail name with your packaging and logo. Private label is a super profitable business model when done properly, the unfortunate reality is that for most people, it's costly. How is it costly? Most private label sellers use amazon FBA and buy upfront - and follow YouTube videos where you’re told to spend money on ads for every single product.
Pros:
- Private label profit margins are lucrative
- You have control over the creative process with your brand
- You don't compete against other sellers for the buy box
- Create brand loyalty
- Control over pricing
Cons:
- No control over quality
- Not doing your due diligence could potentially lead you to partnering with illegitimate or unethical or low quality suppliers
- If sourcing from overseas, wait times could take long to import
So what exactly is wholesale? Wholesale is purchasing branded products at a discounted priced. Normally, you buy the bulk upfront but fortunately, we have tons of wholesale suppliers that allow us to dropship one unit at a time. You're in control of your business in terms of warehousing, packing and shipping since it’s mostly done by the supplier. This method gives you the opportunity to sell products from established well known brands with existing demand from the consumers.
Pros:
- Existing demand
- ASINs already exist
- Easier to scale
- Legitimizes your business
- No IP complaints (if there are, the brand deals with it, not you)
Cons:
- Obtain wholesale reseller license
- Compete for the buy box
- Takes more time to find products
When it comes to private label vs. wholesale on Amazon, well, both are really great methods. Now ask yourself this- which method would you prefer? Which one do you think would be more beneficial for you as a new seller on Amazon?
Make sure to check back weekly for more blogs and our YouTube channel (don't forget to subscribe and hit the bell so you'll be notified when new videos come out) for more training on both private label and wholesale.
WRITTEN BY: Leslie Lazaro
