This post is by Philip Murphy of Private Label Sk.in.
The advantages of selling private label skincare products on Amazon are substantial. But to succeed, you have to work through some of the challenges that go along with being on the world’s largest ecommerce site.
Yes, you will have immediate exposure to an enormous market, but you will also have to contend with strong competition, tough policies imposed on sellers, and – when using Fulfillment by Amazon (FBA) – potential inventory issues.
Fortunately, most of these challenges and others can be handled with research, planning, and diligence.
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1. Find the right manufacturer
There’s more than the cost to consider when you are choosing a private label manufacturer.
Seek out a manufacturer that is already experienced with private label skin care products similar to the ones you want to produce. Speak with them about their process. Visit them if possible. Ask about their minimum order requirements, and how quickly they can scale up as your business grows.
Consider if they offer extra services that you want, such as packaging design or fulfillment. Ideally, you will want to find a manufacturer who you can work with on a long-term basis and treat as a partner.
To find manufacturers, Google “contract manufacturer [your product type],” “contract manufacturers directory,” or try directories such as MFG.com, ThomasNet and Maker’s Row.
2. Follow the regulations
Skincare products are not regulated by the FDA if they do not make any medical claims. But, if they are meant to not only improve appearance but also promote a change (such as an improvement or a cure), then the products will be classified as both a cosmetic and a drug.
To find out which category your product is in, consult the FDA webpage on the topic. The FDA also regulates the use of the term “organic”, labeling, the cleanliness of manufacturing plants and ingredient safety.
3. Protect your brand
Your own original logo, business name, and slogan are legally yours, but should another party ever contest your right to it you will want the protection that comes from having a trademark formally registered. Without trademark registration, another brand can successfully claim your name and you’ll no longer be able to sell your product.
The first step in the registration process is to do research to be sure that you are not unintentionally copying another company’s concept. If your trademark is free to use, you can file your application.
Registering your trademark not only protects your business but also gives you extra advantages on Amazon. In an effort to reduce counterfeit items and trademark infringers from their marketplace, Amazon created Brand Registry for owners of registered marks. The registry gives registered brands a prioritized listing above other sellers, and offers optimization tools to help with sales.
4. Get through Amazon’s gate
About a third of products sold on Amazon are in gated categories, which are restricted to sellers who can establish their legitimacy and demonstrate good business practices. Amazon currently restricts access in this way for topical skin treatments.
Increase your odds of approval by demonstrating good past performance (less than 4% late shipment rate, less than 1% defect rate and less than 2.5% pre-fulfillment cancel rate). Also maintain your own website, provide invoices showing past purchases, work with an established manufacturer, and submit all requested forms.
An Amazon rep will guide you, so pay attention to their feedback and respond promptly.
5. Compete in your category
The advantage of selling private label products is that no one else is selling the exact same item. But with that advantage comes the effort required to attract buyers to your brand.
Some strategies include:
- Packaging: The colors, fonts, bottle shape and design elements of your packaging and other branding is crucial to drawing the attention of your buyer. Imagine who your ideal customer is, and then create the design that will draw their interest. Are they looking for luxury, or something bright and trendy? An all-natural image, or a strong, industrial look? Test out a prototype with a group of your ideal buyers for feedback.
- Story: Is there something unique about the origins of your company or the people it employs? Can you say something intriguing about your key ingredients and where they come from?
- Community: Your products may become part of a larger lifestyle brand you sell from your own site or social media account. Using Amazon and your own site to reinforce each other could be a great means of growth for your business.
6. Manage inventory
First, you will need to choose whether to manage inventory yourself, use FBA, or engage the services of a third-party fulfillment provider. One of the first key factors in choosing among these options is determining if your items need any special handling.
Private label skin care products, as well as many other health and beauty products, often require special handling due to:
- The perishable nature of their ingredients.
- The fragility of some containers.
- The potential for creams and liquids to create a mess if a container should break.
If your ingredients are especially prone to damage from temperature extremes, or if your branding depends on very particular packaging and sensitive handling, then FBA may not be the best option for you.
