51% of all Amazon sales come from brands selling private label products.
And that accounts for $450 Million in 2017 ALONE….
Do you see the opportunity here to start your very own business?
Now look at the top 100 stores on Shopify. They’re all private label sellers too.
Check out the story of Gym Shark for a private label branding example:
A twenty year old guy delivering pizzas starts a fitness apparel brand using Instagram influencers. And it goes on to generate sales of $52 million in 2017.
Sounds like something out of a Hollywood movie.
Or, look at the Under Armour brand.
Founded in 1996, by a 23-year-old former University of Maryland football player. He started out from his grandmother’s basement in Washington, D.C.
All while driving up and down the East Coast with nothing but workout apparel in the trunk of his car.
If you’re looking to start an eCommerce business at scale, you need to private label your own products.
Because selling generic won’t cut it.
Here’s the deal:
Through our manufacturing company Sourcify, we learned that private labeling enables you a freedom in business other business models can’t provide:
Check out Sourcify here!
5 Quick Advantages to Selling Private Label Products
1. You Control Revenue Growth
By creating a brand, you’re able to charge more for your products and increase margins.
Because, your margins allow you to grow the business quickly.
2. You Control Product Selection
With a brand you have direction over what products you launch under that brand.
But by selling someone else’s brand or product, you won’t be able to tell them what items to sell. For example, when Vincero launched, they focused on producing amazing watches.
And now? Well, they sell watches, bags, and sunglasses. This brand control allows them to choose which products they want to produce.
Even more importantly:
3. You Control Brand Equity
This is the relationship your brand has created with it’s customers.
How eager are your existing customers to buy your product? Brand equity creates more lifetime value in each customer.
Supreme, one of the top lifestyle brands does this extremely well. They’ve put their logo on everything from pinball machines to shoes. Each one sells out.
4. You Control Where Your Brand is Sold
By developing your own private label brand, you control where it’s sold.
So, by creating your own brand you can get Amazon to take down third party sellers.
No one can sell your brand on Amazon without your consent.
5. You Create Licensing Opportunities
One of the ways to grow a private label brand and sell more products is with licensing opportunities.
You can collaborate with other companies who want to license your brand.
Just like Original Grain licensed the Yankees baseball team brand for custom watches. You can create the same partnerships.
There are two hurdles to understand before jumping into a private label business.
They’re not difficult hurdles but if you know about them beforehand it can make the initial steps easier!
Private Label Road Bumps to Know About
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There are road bumps along the way to private labeling and this route often takes longer to grow than, let’s say, a dropshipping model.
Therefore, these are the two things you need to consider before starting.
- Overseas Manufacturing: As much as you might save on cost, a difficult part of creating a private label brand is manufacturing your products. As a result, this is the biggest barrier to entry. People face fraud or production of poor quality products abroad. You can streamline this with Sourcify.
Check out Sourcify here!
- Upfront Investment: The one downside of starting a private label brand is you have to buy inventory upfront, without knowing how much you’ll be able to sell.
Check out this private label profit example:
Seems like if you compare these “road bumps” with the opportunity for private labeling product, it’s clear creating your own brand to start your business is worth it.
So you’re probably wondering:
“What the heck do I sell then?”
10 Simple Private Label Product Business Ideas (In Demand For 2018!)
1. Water bottles
Water bottle brands like Hydroflask and Swell are becoming popular. This means the reusable water bottle market offers high potential market growth.
Especially if you’re able to hit a home run with a certain market.
The movement for social responsibility is pushing towards a change in spending.
People are looking to purchase more environmentally friendly items, like reusable water bottles.
This market is estimated to be worth $10.4 billion USD by 2025.
2. Essential oils
The insane growth of the cosmetics industry has also grown the sales of essential oils.
Not only are they useful in the food & beverage industry, but they are also being utilized in aromatherapy, massages, and other relaxation techniques, due to their added health benefits.
Here’s the deal:
The margins on these essential oils can be great, but watch out for certain federal regulations like the FDA.
There are around 200 different types of essential oils consumed yearly. The United States has a major role in the overall demand. This offers a high potential to possible private labelers.
The U.S. essential oil market size was valued at USD 3.36 billion in and it’s estimated to grow 9% from 2016-2024.
3. Party games
One of the fastest growing private label categories online right now is party games.
As a result, games like Cards Against Humanity and What Do You Meme? have been rising in popularity among consumers of all ages, with sales of $9.6 billion in 2016 and a predicted 9% annual growth rate from 2016-2022.
Party games also have a ton of brand equity, as no one likes to play a knock off Monopoly.
4. Phone accessories
With private label products such as Popsockets, car mounts, card wallets, and self-charging phone cases, it is with little surprise that the mobile phone accessories market is aimed to reach an astounding $107.3 billion by 2022.
Private labeling these phone accessories isn’t hard and the margins are sky high.
It get’s better:
One approach would be to simply take a existing self-charging phone case and add your awesome brand logo.
5. Tracking devices
The GPS tracking device market is estimated to reach $2.89 billion by 2023, which would be a compound annual growth rate of 12.91% from 2017.
Factors that contribute to the growth in this market are the rising number of vehicle sales, which come equipped with a GPS.
You can attach a tracking device onto personal items like your phone, keys, or dog!
6. Reusable bags
Consumers want to have a positive impact on the environment. So it’s not surprising people are turning to alternatives like reusable bags. One less plastic bag in a landfill.
Consumers want to shift their behavior towards a more “green” lifestyle.
This market is expected to grow at a rate of 4.66% annually, with North America accounting for the largest market share.
Cigarette smoking in the United States has hit an all-time low, of 15.1% and the US has also experienced the steepest decline in smoking worldwide.
People want to quit because of the growing health awareness of the effects of smoking. So, e-cigarettes have contributed to the drop in smoking rate.
The e-cigarette industry is estimated to show a growth of 22.36% (CAGR) from 2015 to 2025, totaling in a market value of $50 billion by 2025.
The rise of this industry creates a new wave of opportunity for brands to tap into this habit change.
Cities have inspired people to take an interest in houseplants and gardening. In an effort to retain a feeling of nature and “greenness” in a congested world.
According to the 2016 National Gardening Report, 37% of millennials grow plants and herbs indoors.
Terrariums offer the functionality of holding multiple plants and they give people an chance to have their own mini garden. Especially if the environment they’re living in is not suitable for certain plants.
They also act as great home decoration pieces and come in many shapes and sizes. And completely makes your options for production limitless!
9. Smart backpacks
Everyone uses backpacks, whether it’s students or adults in the working world.
Backpacks have been around for ages but technology bags now complement our devices. Most people don’t have a preferred brand with backpacks so the market is open to more competition!
These bags offer expansion batteries to change devices, and additional USB ports.
The global smart backpack business market is expected to grow 4.89% from 2017-2021.
10. LED lights
The demand for LED lighting is increasing. Whether it be fairy lights, Chinese lanterns, neon LED room decorations, or Christmas lights.
Not only are they more energy-efficient than traditional incandescent light bulbs, but are also safer and sturdier.
Additionally, there are many uses for LED lights that you could venture into.
If you can create a new private label category within lights, like gloves with neon LEDs, you’ll have a private labeling business opportunity.
What’s the bottom line?
This list is a good starting point, of thousands of potential private label products, to get your business ideas flowing.
Now It’s Your Turn
If there’s one thing for certain,
Starting private label product business starts with creating your own brand and that takes time.
Leave a comment below and let me know your new brand name and which product you want to sell!
Remember, the early days of Gym Shark the founders were hand printing their shirts.
If you can find a part of your brand people really resonate with, it’s off to the races. Now that you have a clear set of ideas, it’s time to try and bring these business ideas to life!
We host a 3-hour live webinar and Q&A on Monday’s that outlines all the steps you need to start a private label business and answer every single question you have!
Click to sign up below!