Before you get to this step, you should have setup a business entity (Kevin uses an LLC through Northwest Registered Agent) and setup a business bank account.
To setup your Amazon sellers account, go to www.amazon.com/sell
If you are given an option, choose “Sell as a Professional”. This account costs $40 per month, which a few months from now will seem like nothing.
Follow the prompts, using your business information rather than personal information. You will still, however need to use your name. Make sure to use your new Federal Employee ID number as opposed to your social security number. If you need to obtain a Federal Employee ID number, you can do so for free through the IRS here.
If you are asked if you want to sell a product, skip over those sections for now. Remember, all of this can be changed later on.
Beginning the Search for Your First Product:
Follow Kevin’s simple recommendations for finding your first product:
– Pick a category or niche that you enjoy or are passionate about. Remember, you’ll be neck deep in this business for at least the first few years, and it will be a lot more enjoyable if it is something you care about.
– You are searching for a brand, not a product. Don’t search for one product, search for one product that can be a launch pad into other related products, thus creating a brand. I do recommend you launch one product first– don’t try to be a hero and launch multiple things at once. Crawl before you walk, so to speak.
– Amazon tells you what you should sell! Really? Yes, well — kind of. Amazon takes the guesswork out of determining what is selling best. Each item is given a rank, both within a main category (Sports & Outdoors, Beauty, etc.) and a subcategory (Bicycle Helments, Wrinkle Cream, etc.). To get to the main “Amazon store directory” and explore categories, go here.
I tend to look for a product that:
– Is ranked in the top 1,000 in its main category
– Has at least 3 similar products also ranked in the top 1,000 of that category
**These first two tell us that there is enough volume of this product to make it worth our while**
– The competitor products (that I would compete against) have weaknesses that I can capitalize on. Generally, these weaknesses are either a) a low number of reviews…less than 1,000 in general, or b) Their listing is not optimizes. This could mean that they do not include keywords in their title, description, etc. They may not have good images, or not even be utilizing all of the image spaces available on their listing. Amazon usually gives 6-8 image slots. If someone is only using 1 or 2, you can capitalize on their weakness.
That’s it! It really is that simple. Now it’s time to start making a list of your possibilities. Make yourself a spreadsheet. On the left, put the type of product, then in the next column put the top three sellers selling that type of item and the BSR (best seller ranking), then list their price, and finally their number of reviews. Do this for at least 15-20 products.
Pro-Tip: The 999 Trick
If you want to find out how many units a seller is selling of a particular item, add their item to your cart, then edit your cart, attempting to change the quantity to 999. **Important-don’t do this if you have 1-click ordering enabled on Amazon**
If the seller has less than 999 units available, and most do, Amazon will actually tell you how many are available. Write this number down, and then do the same thing the next day at the same time. After a few days, you will get a good general understanding of how many items they are moving per day.
Finding a Supplier:
Once you’ve filled up your spreadsheet, you can pick a few opportunities you want to pursue. Comparing all of the data, where are the greatest opportunities? There should be a few that stick out. Now it’s time to find a supplier. This, too is super simple. You are going to go over to google and type in the type of product you are wanting to have produced, followed by “private label”. Try it both ways, for example: bicycle helmet private label AND private label bicycle helmet. You should get some results with companies that can private label for you.
For many items, you will be sourcing overseas. For the vast majority of products, this means using a site such as alibaba.com Alibaba has certain assurances in place to protect you — learn about and use them. For some items, you will want to source in the US…those include supplements, any consumable or beauty product, as well as many pet products, especially if the product goes in or on the pet. We’ll cover contacting the suppliers and what questions to ask next week.
Take some action this week! Get in the game. Set up your Amazon seller account, get an EIN number from the IRS, start researching products. There is NO better time to be an entrepreneur and there is no better business model than this one. In episode 3 of Private Label for Dummies, we’ll talk about negotiating with your supplier for your first order, and getting some packaging designed.
I want to hear from you! Contact me on Facebook, or send me an email and let me know where you are in the process!