Amazon dropshipping, private label, retail arbitrage, 3-PL, and first-party are Amazon seller strategies with independent definitions. Each has its unique benefits and drawbacks, producing varying results.
When it comes to selling on Amazon, the two most popular strategies are wholesale and private label. If you’re new to FBA or Amazon automation, these two models offer you the lowest barriers to entry and the fastest ROI.
This post unpacks the benefits of Amazon FBA wholesale vs. FBA Private Label. We’ll give you everything you need to know about selecting the right model for your Amazon seller business.
What are the Benefits of Amazon FBA Wholesale?
With wholesaling strategies, you’re placing high-volume orders with brands and manufacturers and selling those products to consumers shopping on Amazon.
Some of the proprietary benefits of using the wholesaling model include the following.
There’s no need to build new ASINs or product pages, two tasks that are standard best practices when building private label product brands.
When starting, choose a small group of manufacturers. If you do well, other brands will reach out to you to stock their items, increasing your business’s scalability.
Wholesaling has low barriers to entry. The trick is to focus on building relationships with reliable manufacturers with large catalogs.
A wholesaling strategy is usually less demanding on your time and easy to scale compared to arbitrage methods.
Since you’re dealing with branded products, you don’t need as big of an advertising budget as you would with new brands.
The products you sell should already have an Amazon sales rank. With this strategy, you mitigate the immediate risk.
What are the Benefits of Amazon FBA Private Label?
Private label products are a great way for sellers on Amazon to build a brand. These products come from manufacturers that sell unbranded products. You can label them yourself, or the manufacturer labels them for you, using your custom branding requirements.
Some of the advantages of selling on Amazon using the private label strategy include the following.
The manufacturing company retains no commercial rights over the product, and you can sell it in any packaging you like, under a custom brand you create.
You can find niche products with high-profit margins.
You get complete control over the creative process. With the right supplier, you can create a range of branded products.
Since you have an independent brand, you get complete creative control. This strategy lets you build a brand, value, and reputation in the market.
You own your “Buy Box” because you don’t have any direct competition on the ASIN.
You have better control over your supply chains and better direct relationships with your manufacturers.
Wrapping Up – Choosing the Best Selling Method on Amazon
As with any selling model on Amazon, the challenge with the process is finding products that sell. If you want to sell other brands, wholesaling might be the better choice.
If you want to build a brand yourself, FBA private label strategies give you the best opportunity. Choose the model that’s right for you and start selling on Amazon today.