Did you know that a lot of the folks who buy from promotional product sites are actually private label re-sellers?
It makes perfect sense if you think about it:
Promotional product sites are a great resource for buying custom branded items in bulk (without having to deal with the cost and hassle of contracting with a factory in China). Additionally, the best promotional products, the swag that drives the highest demand, should naturally have some commercial appeal.
That’s why you’ll find a lot of our best selling items in university gift shops and bookstores.
However, it’s not just grocery stores and educational institutions making money from selling private label products. Internet marketplaces and webstores have made creating a private label brand accessible to hopeful entrepreneurs looking to start their first business from home.
Online Marketplaces and Webstores:
While behemoth chain stores have taken the place of brick and mortar small businesses in a lot of places, online commerce continues to be one of the last bastions for independent enterprise.
If you’re looking to start a small business selling private label products online, you have two options:
- Marketplaces: Existing e-commerce sites where you can list your products for sale. We’ll be looking at Etsy, eBay and Amazon.
- Webstores: Your own website with its own online shop. We’ll primarily be looking at Shopify because it’s the most suitable for an independent entrepreneur.
Using a Marketplace
The Pros and Cons of a Marketplace
Because Etsy, eBay and Amazon are marketplaces, they share these features:
- Anyone can get started: All it takes to start selling is to sign up and list something. No knowledge of web design required.
- Existing customer-base: Millions of people already shop on these sites, so you don’t have to worry as much about finding a customer base. Additionally, people have a chance of stumbling on your items while browsing.
- Established trust: Most online buyers will trust an established online marketplace over a random website, especially if they’ve used it before.
- High SEO Authority: Listings on major marketplaces can rank highly on search engines due to the fact that they are some of the most highly visited pages on the internet.
- Manage with an app: Etsy, eBay and Amazon can all be conveniently managed with seller apps on your phone. Additionally, they all have SaaS-type apps available for desktop use.
- Saturated market: You will have to compete with everyone else listing items on the site. This means that the work doesn’t end at just posting your items for sale, you’ll want to engage in SEO, social media and PPC advertising.
- Reviews matter: On marketplace websites, your reputation is important. You may have to deal with unfair reviews or compromise on your return policy to protect your seller rating. You may also be at a disadvantage without an established history of positive reviews.
- Marketplace loyalty: Most customers are loyal to the marketplace rather than to the individual sellers they purchase products from.
- Harder to market: Marketplaces prefer to keep email addresses and contact information to themselves. This means it’s harder to promote to your customers unless they take some sort of initiative like subscribing to your newsletter or following you on social media.
- Terms of service: Marketplaces are not obliged to list your items on their site. This means that whatever business you do on a marketplace is subject to their terms and conditions (which can always change).
Of all the venues to sell private label products online, Etsy caters the most to sellers marketing their own creations. If you’re more interested in crafting something unique, rather than the process of product research for private label selling, we suggest Etsy as a good first step to online retail.
- Your own shop: Etsy allows you to have your own “shop”, with all your products in one place. These are the cleanest looking of all the marketplace seller pages by default and lend themselves to sharing with fans and followers.
- Niche crowd: Etsy’s audience is actively looking to buy customized items from small businesses and entrepreneurs
- Easy to use: Etsy is easy to use.
- Imitators: Etsy has a lot of copycats. The best selling items are often imitated (although this is true to some extent for any e-commerce marketplace).
- Limited branding: Etsy’s store page isn’t very brandable. Although setting up your store is as easy as writing a little about yourself and uploading a header image and avatar, that’s about the extent of how much you can customize it.
Like Etsy, eBay is another venue that is suitable for taking their first dip into e-commerce. eBay caters the most to people selling individual items.
- Good for individual sales: No quantity minimum, you can list one item at a time. Sellers can list up to 50 items a month for free.
- Bidding system: Putting products up for auction allows them to potentially sell for a higher price (although the reverse is true as well).
- Easy: Like Etsy, eBay is easy to use.
- Tough customers: Customer support for eBay can be a bit stressful, you may find buyers trying to haggle for a discount after receiving their items.
- Joy-bidders: Despite the buyer reputation system, it’s possible for an eBay buyer to win a bid on an item but fail to pay.
- Buyer-sided: eBay is notorious for favoring buyers over sellers in disputes.
You might not have known this, but about half of the items sold on Amazon.com are sold by third-party sellers, including items eligible for Prime shipping.
- Popular search engine: Amazon is the most commonly used search engine for searches with consumer intent (by people trying to buy stuff). People even use Amazon for price checks when making retail purchases.
- Easy fulfillment option: Amazon has a program called Fulfilment by Amazon (FBA) that takes care of the stress, logistics and liability of getting your products to your customers (for a fee). Additionally, products fulfilled by Amazon are able to be shipped through Amazon Prime, so they get more attention.
- UPS discount: As an added bonus of using FBA, you can save an incredible amount of money on shipping by using their partnered carrier options. Specifically, by using the deeply-discounted UPS rates.
- Affiliate program: Amazon has an active referral program, meaning that there is a whole network of people who are incentivized to link to your products on Amazon. Additionally, you can earn a commission for anything someone buys (including from other sellers) when you send people to your own listing with a referral link.
- No email addresses: Amazon does not share customer email addresses. This means you will be unable to promote to your buyers without using Amazon’s message center or shipping items with physical promotional material.
- Highly competitive: Although all the marketplaces mentioned are highly saturated, Amazon is the most competitive in terms of price. You’ll potentially be competing against established sellers with a huge economic advantage in terms of supply chain and cost (meaning that they can afford to sell at a much lower price).
- Limited attribution: From one-click shopping to consolidated product pages with a rotating “buy box”, Amazon is designed for buyers to consider purchases to be from Amazon, regardless of if it’s an item listed by a third party.
- Buyer-sided: Like eBay, Amazon tends to side with the buyer during disputes.
[These pros and cons relate to using Amazon to sell private label (your own brand). Competition for the Amazon “Buy Box” and exclusive distribution agreements are not taken into account.]
Honorable mention – Storenvy
Storenvy has been hailed by a lot of webpreneurs as the “new Etsy”.
Storenvy does not charge an upfront listing fee (setting up a Storenvy shop is free). Upon sale, you are charged a credit card processing fee and a 10% commission if the product was found through the Storenvy marketplace. Additionally, you can simply import your listings from Etsy to Storenvy with this tool.
Creating a Webstore
The Pros and Cons of a Webstore
The first question that many new webrepreneurs have is whether they should use Ebay vs Amazon. However, if you don’t want to limit yourself by selling on a marketplace, opening up your own webstore is an alternative option.
- It’s your own site: You can run your own shop, on your own domain name, and even have a blog. Additionally, having your own site means that you aren’t completely reliant on a marketplace to allow you to list your products.
- Branding: Because it’s your site, you can have your branding all over it. This means that when people visit the page, they’re visiting your page and possibly becoming loyal to your brand as opposed to just shopping on Etsy, eBay or Amazon.
- Less terms and conditions: Barring the law and usage terms of your webstore software, you can sell whatever you want however you want. No more worries about restricted brands and products.
- Email addresses: In addition to being able to generate brand recognition and loyalty, you become the customer’s primary point of contact. This means you get to have their email address.
- Run your own promotions: Since it’s your own site, you have the option of running any promotions you want
- Setup work: You have to set up your own shop and product pages rather than having to simply create a listing. This can be more difficult, time-consuming and expensive.
- Logistics: On top of having to set up the site, you’ll have to figure out fulfillment and payment processing.
- More marketing: Unlike with selling on a marketplace, you don’t get the advantage of a default audience. You’ll have to generate all the traffic yourself.
Unlike the marketplaces listed above, Shopify is a web store builder and hosting provider. This means that rather than simply listing your items on a site to sell them, you will have to create that site.
The reason Shopify makes the list is because unlike most other e-commerce webstore solutions (like Magento), Shopify takes care of the hosting as well. Additionally, of all the web store platforms, Shopify has the greatest ease of entry with a Lite plan starting at $9 a month.
- App store: Shopify has a whole marketplace of SaaS / ERPs via their app store to help you with product acquisition, e-mail, fulfillment, reviews, SEO, social media, affiliate marketing and more.
- Payment processing: Shopify not only has integrated payment processing, but works with Stripe and has a point of sale app (you can physically accept credit card payments with your phone).
- CMS: Shopify is a full content management system (which functions and looks a lot like WordPress in the back-end side of things).
- Themes: Shopify has customizable themes (much like WordPress)
- Base functionality: You will need to install third party apps from Shopify’s app store for certain basic functionalities (like reviews). Fortunately, many of them are free.
Honorable Mention – BigCommerce
Although not as popular as Shopify, BigCommerce has a lot of the same features. Additionally, BigCommerce comes vanilla with a lot of functionality missing from an app-less Shopify. However, due to not being as popular, it doesn’t have as much third party support in terms of themes and marketplace apps. (Shopify vs BigCommerce)
So, what’s the best option?
If you’ve read this far, you’re probably wondering what the best option is.
The best option is to use both marketplaces and a webstore.
That’s right, ideally you should have marketplace listings along with your own store. It’s a lot more work, but there is exponentially more reward.
Here are the benefits:
You can retain marketplace traffic:
If someone is really impressed with your product, repeat purchases may end up taking place on your webstore. This is great news for your profit margins (depending on the marketplace) and even better news for your branding. Most importantly, when your customers shop on your webstore, your products aren’t competing with suggested products from other sellers.
Your brand gets more web presence:
When someone Googles your brand to find out more about your product, the first thing that comes up should not be a marketplace listing. It should be your own website.
[Even if you do not plan to open up a webstore, you should have a dedicated website (and social media) for your brand. An active web presence outside of marketplaces not only gives buyers a means of following you, but adds credibility and gives your customers reassurance that you’re a “real brand”. Plus, buying a domain is only around $10 a year and shared hosting is cheap.]
Although you want your webstore to outrank your marketplace listings, it’s still important for those listings to be on the front search engine results page (SERP). Populating the SERP for your brand keywords with reputable sites like popular marketplaces helps add credibility. Ideally, the first couple pages of your results should be relevant to you.
When someone buys your product from a marketplace, you can insert a card, flyer or promotional products into the packaging, directing them to your webstore or website. Physical promotion materials can sometimes be a lot more effective than ads displayed on a website, especially since there’s a tactile element.
[Amazon is somewhat of an exception.
Amazon states in their terms of service that you aren’t supposed to direct people to other websites for further purchases. However, as suggested by Scott Voelker of The Amazing Seller, it shouldn’t be as much of an issue if you’re directly adding value by providing your information for customer support, offering warranty registration, directing them to documentation on how to use your product, etc. Your mileage may vary (try not to make it too spammy).]
You aren’t just a passenger
This is important enough to say again: Exclusively doing business on a marketplace adds the risk of being at the mercy of that marketplace. If all your business is done on a marketplace, it isn’t really your business. Those aren’t really your customers. This is especially important if you may potentially have issues with a marketplace’s terms of service.
Ready to get started?
If learning about the world of e-commerce platforms has gotten you excited to become a webpreneur, getting started is easy. Your first step is as simple as creating your first listing on Etsy or eBay.
If you’re wondering what kinds of products to sell, check out the large selection of items for rebranding at AnyPromo. Our products are also available as blanks whether you’re looking to sell something “handcrafted” or need something perfect for monograms, vinyl or embroidery.
Plus, AnyPromo has a 110% price matching guarantee. If you find the same crafting blanks cheaper anywhere else, we’ll hook it up for less.