Then I worked out the numbers and realized the capital required was higher than I was comfortable with, the profit margin was not great, the competition was stiff and shipping from China was pretty costly. Bummer. Long story short, after looking around a bit more, I decided to put this the shelf and explore other options.
In the end I started off with an order from Dollar Days International (DDI) which is a middleman wholesale directory. My first order was for 2 products - a case of 25 steak knives and a case of 30 cutting boards. Both were not listed on Amazon so I created new listings. This was a case of not looking before leaping! The result? 9 months on and the cutting boards are lost in the Amazon jungle, languishing in some corner of a warehouse. The steak knives turned out quite well though. I sold 100 sets even though they ended up with a less than 3 star rating. I have since stopped selling them because DDI and Overstock (where I bought my subsequent 75 more for less than half the price on DDI) do not carry them anymore.
At the same time, since creating and importing a PL product from China had such a steep learning curve, I decided to explore looking for a private label manufacturer in the US. I researched several product categories online and finally settled on one. The next step was to Google for private label suppliers. I found almost 20 and sent them inquiries through either their website contact form or email. About 4 responded and out of those only 1 had margins that I felt were workable and who also seemed really easy to work with.
I designed a simple label on Microsoft Word (yup - no fancy software!), explained how to bag and label the product according to Amazon specifications and had the first shipment sent directly to Amazon in Dec 2013. It's been 8 months since my first order from that one supplier (which is a small family farm-based business) and I have sold hundreds of units! Sales were not super hot at first, but a combination of several things has helped the product rank in the top 1%-3% in their category after a few months. I will discuss those strategies in a separate chapter.
Reordering is real simple, I just drop them an email and say, "Hi, I would like to reorder 2 more boxes." They manufacture, prep, label and ship to Amazon, then send me an invoice which I pay by Paypal or Square. And I always pay asap - it's the way I like to do business and helps build a happy and solid relationship with those I work with.
In January, I finally started to pour into the Proven Amazon Course (PAC) materials before my next leap. I spent about 2 weeks studying. The things that jumped out at me were Jim Cockrum's advice to go wide not deep, meaning buy a few units of many different products rather than a large quantity of a few. This is great advice for new sellers to minimize risks until you get a better feel for the market and what sells or does not sell. The other things were understanding categories, selling price, sourcing costs, sales rank and how to apply all that info into making purchasing decisions. From Feb-April, my sales were made up of 85% retail arbitrage items and grew from just over $1000 to $6000 a month.