15 Things You Should Understand if you are in Amazon FBA Private Label Business

Ever noticed how only a few Amazon sellers succeed for long-term? Can we be totally honest with you? Everybody wants to make money, but nobody wants to put in the work. Yes, that’s today’s reality! Amazon FBA business is something where the sellers have to develop sophisticated skills to thrive in a marketplace packed with more than two million competitors whose operational, sourcing and analytical skills vary widely.

This new breed of digital entrepreneur has a diverse composition unlike any group seen earlier. The world of Amazon FBA private label selling is anything but private. Amazon is one of the biggest online retailers with millions of products being sold every year. Launching a private label product to sell on Amazon can benefit you to quite an extent but might find out that you are still competing with hundreds of other sellers on the same product. Figuring out what you are going to sell clears half the problem; this is the no.1 obstacle that prevents the beginners from getting their Amazon FBA business off the ground.

However, with tools like Product SPY Pro Amazon Product Research, the sellers can easily determine the hottest items on the list that can perform well.

In this post, we will not discuss how you can find a product to sell on Amazon but we will discuss other important stuff that is required for a successful Amazon FBA business.

Things you should understand if you want to pursue your career in Amazon FBA Private Label Business

Before you start selling products on Amazon, it is crucial for you to understand how Amazon FBA private label selling works, what to expect from each business model, what are your options, and stuff like that. Below down are 15 crucial things that you need to understand if you are in or want to pursue Amazon FBA business.

#1 What is the Buy Box?

The Amazon Buy Box refers to the white box placed on the right side of the Amazon product detail page where the buyers can directly add items to their shopping carts.

Not all Amazon Sellers are Eligible to Win the Buy Box

Due to Amazon’s customer-obsessed approach and the stiff competition, only those Amazon FBA business with excellent seller metrics stand a chance to win the Buy Box.

In other words, for more popular items with many sellers, multiple vendors may rotate their spot on the Buy Box. If a merchant is stronger than the rest, his/her percentage share of the Buy Box will be higher.

For example, if you are a top-ranking Amazon FBA business owner with a certain product, you could hold the Buy Box for 75% of the day, while the low-ranking seller could hold it for the remaining 25% of the day.

#2 Hijackers

The opportunity available in Amazon FBA private label selling is absolutely massive. However, with that opportunity comes an inherent risk!

It’s a familiar story and it usually goes like this – we need to protect the reputation of our brand from hijacking. People who are selling on our listings are not always selling our real product. Most of the times they are selling counterfeits that are substandard in quality.

In short, in your Amazon FBA business, having your listing hijacked generally means that someone is selling a similar version or a counterfeit of your private label product without your consent. This is particularly frustrating as you took the effort to create your own product and brand specifically so that you can avoid having to compete with other merchants to earn the Buy Box.

#3 Seller Feedbacks

Amazon has created a feedback system to allow the customers to learn from the experience of previous customers. It is an integral part of their platform and there are three types of feedback that Amazon collects for each purchase and they are:

Seller Feedback
Package Feedback
Product Review

There are five important things you must know about Amazon Seller Feedback.

You are not allowed to request/solicit
Feedback differs from Reviews
Negative feedback can be removed within 60 days
Customers have 90 days to leave a feedback
Your feedback rating doesn’t translate to international marketplaces

Feedback refers to the buyer’s opinion about the seller

Reviews refer to the buyer’s opinion about the product

#4 Email Campaigns

How does Amazon FBA private label selling drive business with Email Campaigns? Email campaigns are the stalwart of modern communication. It is a scalable, reliable, and direct channel to communicate with your target audience. Successful Amazon FBA business owners know how to use email marketing at its best. They send emails and a lot of them but they still manage to never come across as pushy or annoying. Ever wondered how? They have a very targeted and tailored approach.

They keep it crisp, simple, and pleasant- Emails are automated based on every customer group (customers with similar behavior). They collect every scrap of buyer’s behavioral information turn it into personalized emails.
Super Helpful Transactional Emails- Amazon’s transactional emails literally shadow the consumers at every step, once they set foot on Amazon. Be it order placements, refunds, and returns, or even account creation.
Personalized Recommendations- Consumers can’t stop themselves from gushing over highly personalized emails. Every email is personalized using the customer’s on-site behavior, gender, age, location, the amount spent, past purchases, etc.

#5 Coupon Codes

This might not be a new thing to you. Amazon FBA private label selling mostly relies on promotions as they are a great way to generate sales. If you are just launching your first product, or you are on to your third or fourth, coupon codes are a great way to get product feedback from the buyers.

Coupon codes or promo codes are computer-generated codes consisting of numbers or letters that buyers can enter into a promotional box on Amazon’s checkout page or shopping cart to obtain a discount on their purchase. Initially offering your product for an extremely low price will provide an incentive for family members, friends, or random customers to test out your product.

However, if you are going to offer discounts, you need to set up coupon or promo codes within your Seller Central account.

Read More about amazon FBA Selling :

#6 Getting Initial Reviews

Initial reviews are the key to success for Amazon FBA business, but as a seller, you need to get the reviews the ‘correct’ way or risk account closure or suspension. Since Amazon values feedback and reviews from the buyers, it does the most of the work for the sellers. However, you can get Amazon reviews faster, and utilize the positive reviews to drive Amazon FBA private label selling.

The best way fits your budget, grows your Amazon FBA business, and is in accordance with the brand’s terms of service.

Here are some popular methods:

Customer service on Amazon
Build an Email list
Review Services
Online Forums
Social Media Groups
Friends and Family

Each of the methods has its Pros and Cons.

#7 Removing Negative Feedback

Let’s jump right in!

Negative feedback diminishes your chances of winning the Buy Box
Negative feedback could result in your Amazon FBA private label selling privileges being revoked
Neutral or Mixed Amazon feedback also hurts

Since the marketplace only considers 4-5 star ratings to be positive, any feedback that is 3 stars or less is not a good sign.

Luckily, handling negative feedback is clear and doable for any seller including the beginners.

If the feedback contravenes Amazon Guidelines, you can request removal
If the feedback is not entitled for removal, reach out to the buyer. Amazon gives consumers the power to remove their seller feedback. If you are able to contact the buyer and resolve the issue, he/she could happily remove the negative feedback
If the customer doesn’t remove the feedback, leave a response on Amazon’s site. This way when another buyer sees the negative feedback will also see that you made an attempt to resolve the issue

#8 Responding to Reviews

It is no surprise that reviews are vital to your Amazon FBA private label selling. Users really want to know if your product is really good as advertised, and they are looking for others to test it and pass the word along. If you receive a positive feedback from a customer regarding a purchase, you can acknowledge the customer with appreciation, though it’s not necessary.

However, if you receive a negative feedback, the best way to react/respond as per Amazon’s guidelines, you have to be;

Informative
Specific
Respectful

We have laid down four golden rules of fixing negative reviews

Act Quickly in order to determine best course of action
Show Empathy – put yourself in customer’s shoes
Keep Calm – never show any negative emotions or never engage in a heated discussion with the customer
Address the Issue as soon as possible

#9 What to Know Before Creating Listing?

How many sales can you expect to see per month? How will you fulfill orders? How much will you pay to Amazon?

Amazon FBA business is definitely an alluring platform. But if you are thinking about listing your products, you may be wondering what the experience will be like.

So let’s get down to it:

Product Title- a good product title including the main keyword. You have to make use of all available character while addressing your product like its benefits, different use cases, etc
Product Images- you can add up to 9 high-quality images. Product images help the customers to get a gist of what your product actually looks like
Product Reviews- it is one aspect of your product listing that is slightly beyond your control. For your initial product launch, you can run some promotions to generate sales, generate reviews, and improve your Best Seller Rank (BSR)

#10 UPC & FNSKU

UPC or Universal Product Code is a barcode that identifies a specific product. UPC is a unique identifier given by the manufacturers to their products. If one or more sellers are selling the same product from the same manufacturer, they will use the same UPC.

Amazon FBA business Eligibility to use UPCs:

To be eligible, your products must

Be in new condition
Have single scannable barcode
Not be consumable or tropical products like cosmetics
Not be expiration dated

FNSKU or Fulfillment Network Stock Keeping Unit is the classification label for particular products that allow Amazon to organize their inventory. This code classifies a product as unique to a vendor who has sent it to the fulfillment center.

#11 Packaging Requirements

We will walk you through the whole process.

For loose products, Each unit must be contained within a secure, single package
For products that are sold as set, must be marked as ‘sets’ on the packaging
The boxed units must be six-sided with openings
The poly-bags must have a 5-inch or larger openings with a ‘warning’ sign placed
The case-packed products must have a matching SKU
Expiration dates must be included on products that expire
Cover, remove or render any scannable or unscannable barcodes on the outside of the shipping boxes
Each unit must have an exterior scannable label or barcode that is easily accessible
The FNSKU label you use must be unique and address to one unique product

#12 Inspections

Pre-shipment inspections are a must for a successful Amazon FBA business as it will help in

Catching the issues at the source
Avoid suspension, negative feedback, and lower returns
Getting better product’s quality
Preparing an accurate product listing
Lowering the risk by verifying Amazon’s labeling and packaging requirements

Inspections not only help the customers make the best decisions on their purchases but they also help to contribute to better search engine rankings.

#13 Seasonality

Being in Amazon FBA business, have you ever noticed a seasonal factor to your sales? Perhaps you have seen a really dramatic drop in certain months or a significant growth during the first quarter of the year. In fact, seasonality has an effect on most product niches/categories and you can study its regularity and rhythms to figure out how to take advantage of it.

#14 Check for Trademarks & Patents

Amazon FBA private label selling will get even more productive if protect your brand with brand registration, patents, and trademarks. It is necessary that you take as many steps as possible in order to protect your Amazon FBA business. Hijackers are the main reason why you should trademark your company and get your brand patented. Registering your brand for a trademark is essential as you will be blocking the potential hijackers from using your brand on their counterfeits.

When it comes to patent, you can only file for a patent if you are the sole creator of the product you are selling.

#15 Calculating Profit Margins

The most exciting part about being in the Amazon FBA business is getting sales, of course! As a beginner, the return of investment (ROI) you should look for the items that you can sell is ‘three times’ what you pay for them. We call it the ‘3 Times rule’ or ‘3X rule.’ This approach creates a 100% ROI which is a healthy profit margin.

The idea behind this rule is that if you acquire an item for $5, you should be able to sell it for $15 or more. In this case, you paid $5 for the item, $5 to Amazon as shipping charges, and the remaining $5 is your profit.

You can use Product Spy Pro analytics platform to determine various fulfillment costs. This can be done using the FBA calculator.Overall, the weight of your product plays a large role in your profit margins and the success that your product will have in terms of sales.

Conclusion

Amazon FBA business is a lucrative platform if you understand all its rules and how it works. We hope that the things we covered above will help you understand how you can strategically approach your Amazon FBA private label selling for better results.

Product Spy Pro offers amazon FBA product research tools to get amazon product selling ideas and what to sell on amazon to make money?.ProductSpyPro product tracking tool allows you to track reviews and sentiment expressed by the customer using machine learning algorithms.