Through this article, we will detail the steps that we went through to create and sell a successful private label product on Amazon. Keep in mind that these are broad steps and that there is much more detail than will be fully explained in this article. These are simply the steps that we took and had success with on Amazon, but following these steps does not necessarily guarantee success for any one product.
Step 1: Finding the Opportunity
I. Recognizing Trends- Identifying trends was one of the most important parts of this product's success. In searching for trending products, I came across several Christmas ornaments related to the pandemic for Christmas in 2020. "Covid ornament," "pandemic ornament," and "coronavirus ornament" all had high search volume during the last Christmas season, a trend that I expected to continue in 2021.
II. The Right Product- For 2021, a huge issue that applied to everyone this year was the Covid Vaccine. Whether you got it or didn't everyone knows about it and is very aware of the pandemic and the vaccines broad reach to people in the U.S. We figured that many people would look at the vaccine as a reminder or memento of sort for 2021.
III. The Right Time- Timing was crucial for this product because we knew that this would be an extremely seasonal product that would only sell for about 2 months, but would do a ton of volume during that time. We launched the product in early October before the Christmas season would be in full swing.
Step 2: Sourcing
I. Finding Necessary Materials- Because this product was not widely available to drop ship from China on a Website like Alibaba, we first had to figure out which materials were necessary to create the ornaments. Materials we needed were glass vials, red ribbons, eye hooks, and sticker labels.
II. Using Amazon- Luckily for us, all of the aforementioned materials are available for purchase using Amazon Prime two-day shipping. We actually sourced a product that we sold on Amazon, on the website itself!
III. Inventory Ordering- Ordering inventory was extremely easy and convenient with Amazon's two-day shipping through prime compared to the normal process of waiting a month or two when ordering inventory from China.
Step 3: Listing Building and Launch
I. Optimizing Copy for Keywords- Using the Listing tools by Helium 10 we were able to do keyword research and find keywords that we would both convert very well for, and would be extremely high search volume during the peak Christmas season.
II. Images- For photography, we utilized a photographer that had experience in creating product images for Amazon. We made sure to have at least 7 good images when we posted the listing.
III. Launch- We were not able to do any advertising because of Amazon's Ad regulations with any products relating to the pandemic. However, almost immediately we were able to make a few sales and started ranking well for our target keywords. The Amazon A9 algorithm recognized pretty fast how well our product was converting sales, and put us close to the top ranking for many vaccine/Covid ornament-related keywords.
Step 4: Inventory Planning/Management
I. Projecting Demand- As this is an extremely seasonal product, with 95%+ of the sales coming in a two month period, it was vital that we were on top of inventory planning and management to ensure that we had all the product in Amazon to prevent stock outs. To project demand, we put together a spreadsheet where we took 6 Christmas ornaments that sold well last year. Using Helium 10 tools, we were able to see how many units were selling per day for other Christmas ornaments, so we knew about how many we would need to meet that demand during peak selling volume.
II. Initial Inventory Shipment- Because there were inventory limits on our account, we were only able to send about 1000 at first. Only once we started selling through a significant portion of inventory, would we be able to send more into Amazon.
III. Additional Inventory Shipments- Amazon has strict inventory limit requirements, which meant we could not send all inventory at once. Inventory initially is allowed by sell-through rate, so basically every time we would sell an ornament, we would be able to send a new one. Every time that we could send 500 in, we would create a new shipment. Eventually, Amazon's algorithm caught on that we were selling through at a faster rate than it was allowing us to send, so we could send almost as many as we wanted.
After the conclusion of the peak sales season, we had sold over 6,300 ornaments at a gross revenue of over $86,000. We were able to attain great margins, making this a resounding success. After all expenses, our ROI was almost 600%, an unbelievable return for the extremely competitive marketplace of Amazon.