Wondering if a product that you’re considering selling is worth pursuing as a Private Label product?
Well, it’s a common question I hear from my subscribers, which is why I’ve created a number of resources to help you research and sort through different products you’re considering, such as:
My Seller’s Checklist that grades your products against the exact same criteria I use when selecting products to sell.
My ASINspector Software that pulls all the Amazon data you need in order to evaluate products.
In addition to these programs, there are some warning signs with certain products that you’ll want to be on the lookout for so you steer clear of them and not waste your time or money.
Here are a few of those warning signs.
Product Warning Sign #1: Identical Products
If you’re searching Amazon and you see the exact same product being sold by a number of vendors, or pages and pages of the same product with a different logo or name on it, then you’ll probably want to move on to another product.
It used to be that you could simply slap a new label on a product from a Chinese vendor and sell it on Amazon. However, so many people have done that now and flooded certain product categories that it’s no longer profitable or desirable to try to add yet one more identical “me too” product.
For example, almost anything in the kitchen niche (knives, cheese graters, garlic press)… or cell phone cases / screen protectors are super crowded with “me too” products.
Similar products are fine, but if you try to sell the exact same items and do not make any attempt to make changes, add value or differentiate, then you’re product could be dead in the water and you could easily waste a lot of money.
Product Warning Sign #2: The Margins Are Super Thin After All The Platform Fees
Before selling your products on a marketplace, you’ll want to make sure you have a good sense of your margins and a firm understanding of the marketplace’s fee structure. In highly commoditized, low-margin categories, the numbers may just not add up.
Here are the fee breakdowns for Amazon and eBay:
In order to know what kinds of margin and ROI potential different products have, simply fire up my ASINspector app to quickly see if you have enough margin to make it worth moving forward or not.
I recommend having at least a net 20% ROI after all fees and shipping are accounted for to even consider a product.
You need to determine your own minimum numbers that you are comfortable moving forward on when evaluating potential products.
For example, as I see above, a product like LG Phone Cases is really saturated and if for some reason you were able to get your case ranked high, you need to be able to source your cases at really low prices in order to have any margin.
Take this rugged LG G5 case you can source from AliExpress:
You can source it for $4.99 per item…
…but a very similar LG G5 case on Amazon is selling for only $9.99:
When you factor in Amazon fees (as shown using ASINspector Pro), you would actually only make $0.46 per sale (9% ROI) in this scenario. That number only includes Amazon fees, and no other marketing costs, so you don’t have much margin to play with.
In order to break even after Amazon fees, ASINspector Pro shows that you’d have to source your LG G5 phone case for no more than $5.45, since those are Amazon’s total fees:
In a saturated category like this, it’s best to move onto a different product.
Product Warning Sign #3: When You Find The Same Product On The Suppliers Website
If the supplier you’re considering has the same exact product images on their website as you find on Amazon, you should consider dropping the product from consideration.
Since it’s already on Amazon and easy for anybody to get from the supplier, then it will also be really easy for other sellers to jump on your listing or hijack the Buy Box.
Remember, one of the best reasons to Private Label is to never have to worry about competing for the Buy Box. But when you see the same exact product easily copied, your listing can be too.
Product Warning Sign #4: Amazon Can Easily Compete With You
Amazon uses third party merchants to provide low-volume specialty items it doesn’t want to hold in stock so that it can deliver maximum selection.
But if your product line starts selling well, then you’ve just told Amazon which product it should stock next. That’s part of its strategy; Merchants help Amazon to identify new niches and categories to enter that can be profitable for them.
Every year Amazon has expanded into new categories under its AmazonBasics line. You can actually see their Sellers page here:
This isn’t going to change, so if you are able to source potential products in a couple of seconds… so can Amazon.
So How Can You Be Sure That Your Product Stands Out?
Make your time unique, and with features and benefits that matter to potential customers.
A great way to discover what kinds of changes to consider making is to read through the product reviews. Actual customers are leaving real feedback about what they like and don’t like for the products they are buying.
When you read through these reviews, do you notice any trends? Any feature requests being listed? Any weaknesses being exposed that you know you could improve upon? Can you bundle your product with another product to solve more problems or create added value?
For example, this is some feedback about how one of the LG G5 phone cases isn’t as snug as it should be:
There are so many hidden gems left in comments, that if you take time to read and understand them, you can easily make a product with in-demand new features and benefits, allowing you to truly stand out and have a successful Private Label product of your own.