PLP 010 – Private Label for Dummies Episode 3 of 4 – Picking a Supplier, Placing First Order & Designing Packaging

In this third installment of Private Label for Dummies, Kevin walks you through what to look for in selecting a supplier, and provides guidance and tips for placing your first order of your private label product. Next, listen to some keys to designing packaging that will stand out and set you apart from your competition.

Overview:

Before you get to this step, you should have listened to episodes 1 and 2 of Private Label for Dummies. Don’t be a hero and skip around, follow the directions for success!

To listen to episode 1 click here.

To listen to episode 2 click here.

Negotiating with Your Supplier:

When it comes to approaching potential suppliers, you’ll want to talk to around 10x the suppliers you end up dealing with, and you will want to request samples from at least 3-4 different manufacturers. Don’t skip this step. You will find great variances in price and quality, so it is important to inspect what it is you will be selling.

Remember that you wan to build a relationship with your supplier, not just become their customer. Be kind and courteous. One of the best ways to make a strong first impression is to use a custom email address with the domain you registered after listening to episode 1. [email protected] is much more official looking than [email protected] These suppliers are being inundated with potential private label customers every day — and you want to give them a reason to choose to do business with you.

A few pointers for negotiating with suppliers:

1. Be aware of patents and trademarks. Do your due diligence. Just because a factory is willing to sell it to you, does not mean it is not protected. Seek competent legal advice if need be.

2. Use Alibaba’s built in protection mechanisms such as Gold Supplier status. Use common sense.

3. Check to see if your supplier is selling the same product on Amazon. It is not necessarily a deal breaker if they are, but something you should be aware of, for sure! If the manufacturer sells on Amazon they will ALWAYS be able to beat you on price. The question then becomes can you beat them on marketing, images, listing, etc.

4. Ask about customization options. Can you get a different color? How about your logo or brand imprinted on the product? Are there minor improvements or tweaks you can implement to make the product better, and if so can those be exclusive to you?

5. Order samples BEFORE placing an order with a company. This is a MUST-DO.

6. Negotiate price and MOQ (minimum order quantity) LAST! They will want to find out early on how many units you plan to order. Hold off on discussing this, as well as on negotiating your price for as long as possible. Ideally it will be the last thing you discuss. The reason for this is that if you get all of the other details worked out (color, size, features, packaging, shipping, production time etc.) your supplier is now INVESTED in your product. They want to see you place and order, and will be much more willing to negotiate. If you lead with those questions, however, it is very easy for them to tell you no, because they are not yet invested.

Finally, when determining your initial order quantity, instead of asking yourself “How few can I get by with to start?” instead ask “How many can I reasonably afford to start with”. The more the better, in my opinion, as you will need somewhere between 50-250 to launch with, depending on the competitiveness of your market.

My Story: Learn from It

I want to share a few examples with you of how dealing with a supplier can become very stressful, not just in the beginning stages, but after you’ve launched a product. Learn from my experience.

One of my suppliers also supplies a fair amount of my competition. While this made it easy for me to identify them as a supplier, it also makes it very easy for my competition to identify my new products, and the company providing those new products to me. This has created a cest pool of Amazon-sellers, who frequently copy each other’s new ideas and product lines. When I first discovered this, I approached the supplier to discuss ways to combat this and potentially differentiate our line from the others, but they were only willing to go so far. I can’t say that I blame them– they have a good thing going. The lesson learned here is to not get yourself into a situation where you are doing the hard work of researching new products and ideas for your competition. Differentiate your brand with products sourced from multiple sources, and go to great lengths to make it harder for your competition to copy you.

Another supplier of mine provides a product that is very difficult to source. I was elated when I found them, had my version go live and start selling like hot-cakes. It was only then that it was brought to my attention that I was selling below this supplier’s MAP (minimum advertised price) stipulation. When I thumbed back through the 4-page document I had signed with them, sure enough–there it was. This started a round of negotiation between my supplier and I that was time consuming and painful. On one hand, the supplier’s expectations were much more in line with a wholesale agreement than a private label agreement. On the other hand, finding another supplier that could duplicate this product was very difficult as well. In the end, we were able to come to terms and keep my product selling. Moral of this story is not to sign anything unless you read and understand it thoroughly! Also, make sure that your supplier understands that you will brand this product your own, and retain all rights to sell the product as you choose, and for the amount you choose. That’s the nature of private labeling.

I am fortunate to have great relationships with my suppliers today, and I want to do business with them for a long time. Make the effort to put in the time and energy to build relationships with your supplier, and it will pay off tenfold.

Designing Packaging:

Once you select a supplier and place your initial order, it’s time to design some packaging. I am not going to go deep into specifics here, as it will be largely dependent on your product. Here are my suggestions for packaging design, however:

99 Designs: My favorite! They run a contest and designers submit designs and compete against one another. A great way to get a really nice design in about a week for a few hundred bucks. Also, check out their “tasks” for smaller projects. They are only $19 each, and are completed in about an hour.

Fiverr: A plethora of jobs (including packaging design) starting at five bucks.

Take the time, and spend the money, to do it right when it comes to packaging. Don’t skimp on this. Get the best packaging you can afford.

Wrap-Up:

What action are YOU going to take this week? Don’t sit on the sidelines, contact those suppliers and get your samples ordered! Then place your first order. Make sure to join our new private facebook group, Private Label Empire Builders so that you can get support and accountability! Next week, we will set up our Amazon listing, and create a launch plan. You won’t want to miss it.

I want to hear from you! Contact me on Facebook, leave a comment below or send me an email and let me know where you are in the process!

–Kevin

PLP 009 – Joe Junfola – The Master Reveals All. 4 Brands and Over $2M in Amazon-Related Revenue in 1 Year

Joe Junfola, “Master Joe”, did over $2M in Amazon-related revenue in his first 12 months. Joe has 4 brands selling physical private labelled products. In addition, he is the founder of ZonBlast and my business partner in ZonSquad.

Overview:

Joe takes us back to a year ago when he launched his first private label product, selling on Amazon. He discusses in depth the strategy he used to circumvent the most costly and time consuming launch step, and instead catapulted his first product from unknown to best seller in less than a month. This feat alone earned him the title within the private label community of “Master Joe”.

Joe’s “launch process” later became one of the most-used and trusted tools in an private label seller’s arsenal, ZonBlast. Joe talks about deciding to turn what was his biggest secret into a publicly available service that has been responsible for launching over 1,000 products. Joe shares the two things that set successful private label sellers apart from those that flounder.

In the past year, Joe has grown his empire to include four brands, and a slew of services for private label entrepreneurs. Joe shares about the difference between picking a product and building a brand. Joe and Kevin discuss building a team, and when and where to look for talent to outsource tasks to. They discuss competition, and what to do when your business faces stiff competition.

Joe and Kevin discuss how they formed ZonSquad with Brian Creager, and go into what ZonSquad is.

The episode ends with Joe giving some advice for private label brand owners: “Be resilient, be adaptable. Write your own destiny. Be aggressive”. Some very powerful words to live by.

Guest Recommended Resources:

Asana – Organizational tool which streamlines projects, deadlines and allows your team to collaborate.

Recommended Reading:

The 4-Hour Work Week by Timothy Ferriss

The Millionaire Fastlane by MJ DeMarco

**Get a FREE Audio Book download of this, or any other book of your choice by clicking HERE

PLP 008 – Private Label for Dummies 2 of 4

In this second installment of Private Label for Dummies, Kevin walks you through setting up your Amazon Seller Account and beginning the search for your first product to private label and launch, selling on the world’s largest e-commerce platform.

Overview:

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.

Wrap-Up:

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!

–Kevin

Private Label Podcast

with Kevin Rizer

PLP 010 – Private Label for Dummies Episode 3 of 4 – Picking a Supplier, Placing First Order & Designing Packaging

PLP 009 – Joe Junfola – The Master Reveals All. 4 Brands and Over $2M in Amazon-Related Revenue in 1 Year

PLP 008 – Private Label for Dummies 2 of 4

Subscribe To Be Notified About Upcoming Shows!