My advice to new Amazon sellers is always to start out simple. Learn the basics before jumping into the deep end. Here are the steps I would recommend:
Update March 2018: As the market has changed since 2014, I now recommend new sellers start with Private Label straightaway, whether you have $100,000 or $1,000 in capital to start with. A couple of reasons why:
- Many existing retail have applied to become brand restricted on Amazon. This means unauthorized sellers are not allowed to sell the brand's products on Amazon. If you sell something branded that you bought from Walmart or elsewhere (such as by Gillette, Nike, etc.), you might not know that it is brand restricted. Unfortunately, when you try to list a product, Amazon only occasionally informs you that it's restricted! Other times, it the system allows you to list the product, then retroactively notifies you that you are in violation and suspends your account! I know a few people personally, who have experienced that happening in just the past 3 months.
- It is very possible to start your own private label on Amazon even on a very modest budget. In fact, my first private label started with an $80 investment with an order of just 10 units from a manufacturer and just that 1 brand sells 6-figures every year. Private Label can be easily overcomplicated. Or it can be made to look too difficult. But it does not have to be - you can start creating and selling your own brand of products fairly simply with a small or large investment.
In conclusion, take action with simple steps. For someone starting out, I recommend you start with the Proven Amazon Course, which costs just 7% of ASM and in my opinion has far better value with an amazing supportive community or consider coaching. If you are set on learning private label, I have just started going through Proven Private Label which together with the Proven Amazon Course is more than enough to get anyone going.
1. Find somethings around the house, thrifting or retail/online arbitrage and sell those first. Preferably including arbitrage items. This is to learn how to calculate profits after cost of goods purchased, Amazon fees and other expenses.
2. Add at least 5-10 products (which could be just to piggyback on existing listings) into their Amazon inventory and send in at least 3 shipments. This is to learn the listing and prep requirements (product labeling, shipment creation and labeling, packaging, etc.).
3. Create at least 2 brand new, unique product listings with bundles or multi-packs. This is to learn the whole product listing process which is vital to creating effective PL listings which will rank well, draw Amazon search traffic and convert to sales. You could well also encounter things like Amazon hazmat reviews, restrictions, etc. which you want to learn about first before you buy a big order of a PL or wholesale product you are not allowed to sell.
I know someone who has $40k set aside for FBA and he's going through the above first before venturing into bigger things.
Launching a PL is not that easy especially if you have no background in Amazon PPC, SEO, etc. - for example with the promo for Freedom Soap (now rebranded as PremaTouch) at #ces2dallas with Jim Cockrum's endorsement and the support of many people, we have had a grand total of 30 orders in 3 weeks, which is not huge but not bad either! But realize I have put in $5,000 to develop it (paying the ladies rescued from trafficking, capital for raw materials & labels, shipping from India to the US, customs, etc.) and revenue is a grand total of $779 so far. That would be hard to swallow for many people, but I'm in this for the long haul with a far larger vision of societal transformation.
Anyone who thinks PL is a walk in the park to making $50k/month might be in for a surprise. If you have several thousand dollars to spare then fine. But I would be genuinely concerned for anyone who wants to start out with PL especially with no prior selling, marketing experience and a limited budget they cannot afford to lose.