Over the past ten years, the internet has become a treasure trove of opportunities, driving the boom of the online economy.

But what keeps you from seizing your piece of this digital wealth?

Chances are, it's the challenge of figuring out the best business model for you.

Let's get honest about choosing a suitable business model for you. It all boils down to two big things:

1. How much risk you can handle

2. How likely is the business to succeed?

Most people, about 90%, don't have a lot of wiggle room for losses, so they want a business model that's got a good chance of working out.

Here's the deal: About 90% of tech startups and new business ideas don't make it.

That means diving straight into startups might not be your best idea. But don't worry, another option is perfect for new investors like you: making your own brand with Amazon's private label model.

Continue reading to discover why selling on Amazon private label is the most brilliant move for building your wealth and creating your brand.

Brand Ownership

The primary business rule is simple: what catches the eye sells. It's crucial to keep this in mind. Owning your brand allows you to carve out your identity and stand out with a unique selling point.

Let's compare Amazon's private label model to other models like wholesale, where sellers buy products in bulk from manufacturers and resell them for a profit. Unlike wholesale, the private label model focuses on building your unique identity and selling products with your branding.

It can be anything like creating your own organic skincare products or targeting the health-conscious audience with healthy snacks. It's all about your creativity and what you choose to make.

Higher Profit Margins

The model's success rate is just one thing. However, sustainable profit margins are also a crucial point achievable through the private label model. The wholesale model would generate great profit for you in the short run but falls short in sustaining the profit. The primary reason for this is the ability to control prices, which, unfortunately, is impossible for the wholesale model.

Here's a simple breakdown: When you work with the wholesale model, you team up with brands or their approved sellers to buy products at wholesale rates. But there's a catch – the brands usually set a fixed price for selling their stuff, so you can't just hike the prices for more significant profits. That's why a lot of investors prefer private-label selling.

However, with a private label, you get to call the shots on how much your product sells for, giving you more control over your profits.

For example, if you're selling a brand's coffee in your store and its official price set by the brand is $10, and the wholesale price is $5, that gives you a range of pricing. You can sell it for $6, $7.5, or any price you want, ensuring it does not exceed the official pricing of $10.

Less Competition

Although it's a fact that there is no such thing as less competition on Amazon, it's fair to say that private labels are less competitive than the wholesale model. The reason for stating that is Amazon's Buy box.

The buy box is a feature visible to customers on Amazon's product details page. This Buy box features only one seller of the product from all the sellers selling the same product. This filtration is based on seller's rating, pricing, and fast shipping.

Now, assume that you're selling beauty products of a specific brand for a wholesale model. Ultimately, there are thousands of other sellers who sell the exact same product from the same brand.

It will be hard for you to win the position on the Buy box since you're already limited by the pricing and can't go above or below a certain point. Thus, it will be a toe-to-toe competition, and anyone offering a bit lower price than you will win the Buy box.

However, things are simpler with a private label brand because you're selling products with your brand name. This means you don't have to compete as fiercely with others.

Flipping Your Brand

Online brands are an asset for the investor. And a true asset can be flipped for total valuation calculated by its profitability. Similarly, your Amazon private label brand can be flipped as an asset. It's essential to understand what makes your brand flip-able.

Flipping your brand depends on the performance, sustainability, and scalability of your brand.

a) Performance

The performance of the brand indicates how good your product is selling, whether there are more returns or less, and whether there is any unique selling point about the brand.

b) Sustainability

Sustainability is about how steady the brand's profits are and how long it can maintain its value, which makes it appealing to investors. In other models, like wholesale, scalability decreases due to competition. As competition grows, profits decrease over time, sometimes disappearing altogether.

a) Scalability

A brand's ability to grow and offer new products is super important. It means you can keep adding new stuff to your brand, making it a go-to place for a specific niche. Getting really good at a particular area is best done through Amazon's private label model.

Ready to Get Started with Your Amazon Private Brand Creation?

Now that you've identified the best business model for your e-commerce venture, it's time to focus on the "how"– how you'll bring your vision to life.

Creating a brand isn't just about having money; it's about having a fantastic product, a solid plan, managing your account well, and ensuring profitability. These tasks need expertise and can't be done alone.

That's where a team like Salez Peak comes in. We are experts in building Amazon brands from the ground up. Salez Peak offers Amazon private label services, including product research, launching, marketing, and brand management. So you can sit back and relax while we handle the challenging work.

Reach out to us to get started with your brand creation journey today.