Here’s what you should do instead.
A sustainable business is built on healthy profit margins and good professional relationships.
Successful private labelers are able to cultivate both of those things. They know how to increase profit margins, maintain healthy professional relationships, and reduce their opportunity costs.
To have sustainable profit margins, you must be able to purchase inventory at as little cost as possible, which is determined by how you source your products. Additionally, you want to make efficient use of your time and make sure your inventory is filled with high-quality products consistently—because if you can’t make sales due to shoddy products or low inventory, you’re losing money.
Many private labelers get started by sourcing products from Alibaba or Ali Express. This helps sellers become familiar with Amazon and learn the basics of private labeling, but it’s not the best long-term method to win you big profit margins and a successful business.
Why?
In our 3 decades of private labeling, here’s one thing we’ve found to be true:
Successful private label businesses are built on great (not perfect) products at the right price. And you achieve that through great relationships with manufacturers.
While Alibaba allows some communication with manufacturers, it’s hard to build a successful relationship through a screen.
It’s also hard to trust the quality of products you can’t physically inspect—especially when they come from suppliers you have no relationship with. Many sellers lower this risk by ordering samples before purchasing the rest of their inventory. This is smart, and if you source from Alibaba or Ali Express, we recommend it.
However, in the time it takes for your sample to arrive, you’re not selling—you’re losing potential business. And worse, if the sample is not up to your standards, you’ll have to wait for another one. Then, once you do place an order for the rest of your inventory, how can you be certain it’s the quality of the correct sample, rather than the incorrect one?
The big risk here is ending up with an inventory of low-quality products, which sells slower than a high-quality product, if it sells at all. If you end up in this situation, you’re losing both time and the money you could make selling a better product.
So, what should you do instead?
Go straight to the source.
Have you ever gotten upset with someone over a text message or an email, only to meet them in-person and realize it was a miscommunication that made you angry?
You certainly can build helpful relationships with manufacturers through email and phone and video calls, but it’s not the quickest method.
If you want to sell the best product you can as quickly and efficiently as possible, it’s imperative you meet manufacturers in-person.
This lets you see and feel the products you’re selling, allowing you to make comments and give feedback in real-time, completely eliminating the weeks (or months) of back-and-forth with sample products.
And, even though technology has made private labeling much easier, there’s something to be said for face-to-face interaction with your business partners. We’ve been going to China since the 80s and have personally experienced the genuine connections that come with meeting manufacturers in real life, shaking their hands, and having a conversation.
That’s something you simply cannot do sourcing products online.
And we haven’t even mentioned the best part yet:
Once you have a relationship with suppliers, they’ll be much more likely to give you better prices on your orders.
Manufacturers understand their best bet for success is with people who buy product consistently. While they might make a quick buck on new sellers, by showing them you’re experienced and that you’re serious about this, you’ll show them that you plan to stick around for the long-term, which means less stress and more money for them.
Why wouldn’t they give you a discount!?
Your success as a private labeler depends on your ability to take advantage of your resources to the best of your ability. This means building great relationships with suppliers, so you can increase product quality and profit margins while decreasing the opportunity cost of selling a shoddy product.
