Once you start having some success with your own Private Label products on eBay or Amazon you might start to notice that although you have a lot of sales coming in, you actually have no customers of your own. And what I mean by that is the customers are eBay and Amazon’s customers who happen to be buying your product that time.

At this stage many Entrepreneurs start their own Shopify stores. This allows them to own the customer data like emails, phone numbers, etc. You can send follow-up offers, quarterly sales, and even target people similar to your customers in your Facebook ads all with this customer data. Many times, this data proves to be worth more than just one sale, and the lifetime value of your customers goes from one single purchase to more repeat customers.

This article is an excerpt from our eBook which is available on Amazon Kindle.

What To Sell

Just like Business Models #5 and #6, just about any common product can be private labeled. These are typically generic products without patents or intellectual property that would prevent you from making products just like it.

I generally look for product categories where consumers don’t care about brand names too much. These are often functional products that solve a problem or specific need that you customers couldn’t name the leading brand. Like garden hoses, binoculars, hand towels, door stops, etc. If you’ve seen it in an informercial or “as seen on TV” then it’s probably something that can be private labeled.

Often this business model is when you’ve found products that work on eBay or Amazon through your research on Terapeak or JungleScout, and you then decide to add Shopify as another revenue stream for your business.

How to Get the Products

Entrepreneurs, like myself, who use this business model often get products from Alibaba.com. These are suppliers in China who make all sorts of products. I initially buy just a few products (like 10 or so, whatever fits in one case and doesn’t cost me too much money to try). Then if they sell well, I do larger orders and sometimes the price even drops with higher quantities.

How to Get Customers

This is where the difficulty of this business model becomes Expert level. Getting customers from ads to land on your own website and buy your products is harder than customers already on Amazon buying your product through Amazon and trusting Amazon with their credit card info.

Most entrepreneurs using this business model including myself, use Facebook ads, Google AdWords, and YouTube ads to find customers. To do this profitably takes research, experience, and probably some money upfront to learn what best converts for your customers.

Advantages

Once you have sales on your Shopify store and you know who your customers are, it is nice to not only be able to contact them again with additional products, but use their data to find more customers. On Facebook ads you can upload your customers email addresses and have Facebook find more customers like that for you. That way your ad for baseball gloves is only being shown to people Facebook knows are looking to buy a baseball glove.

Disadvantages

The biggest disadvantage to this model is just how hard it is to successfully start to get sales on your own store to get a sizeable amount of customer data to help target your ads to people like your customers. Your customers will need to know, like, and trust your brand or products enough to put in their credit card information to a new website that maybe they have never seen before. Often this requires a lot of content online in social media, blogs, videos, and strong money back guarantees.

Risks

The biggest risk using this business model is spending hundreds of dollars or more on ads and not getting enough sale to make it profitable. You can end up losing money on the advertising as well as on any inventory of products you have that aren’t selling. Generally, I find that you will want to have your private label products selling successfully on other platforms like eBay or Amazon before moving into starting your own store.

Money Needed to Get Started

$500 – $1,000+ to get started with a test order of products, and some advertising campaigns.

Expected Profit (% of sale price)

25% once you can successfully convert advertising profitably.

Resources and Examples

Third-party links and resources. Commissioned links below.

Article: How to start a private label Home Business

JungleScout

Alibaba.com

Klayvio

Article: Facebook Ads for Beginners

Article: YouTube Ads for Beginners

This article is an excerpt from our eBook which is available on Amazon Kindle.

Disclaimers

IMPORTANT NOTE ABOUT THE AUTHOR: Earnings and Legal Disclaimers: The author is a professional 20 year entrepreneur and his results are not typical. His experiences and those of his examples and students are not typical and not a guarantee you will make money. You may make more, less, or the same. There is risk of losing money in every new business. Individual results will always vary and yours will depend entirely on your individual capacity, work ethic, business skills and experience, level of motivation, diligence in applying information, the economy, the normal and unforeseen risks of doing business, and other factors. Additionally, the author is not a lawyer, CPA, or CFP and does NOT offer legal or financial advice. The author is not responsible for your actions. You are solely responsible for your own moves and decisions and the evaluation and use of information should be based on your own due diligence. Unless otherwise noted, all photos courtesy of Pexels attribution free license.