The facts show it private label selling on amazon does not work for most
What's going on Amazon sellers or hopefully soon-to-be Amazon sellers my name is Beau Crabill and in today's video I want to discuss
about why private label does not work for most
people and I'm talking about in regards to selling on Amazon now before I explain to the reasons
why
private label does not work for most
because that's going to be actually the easiest way to
Explain it I want to actually tell you and kind of to talk to you about why people even think private label is a good
business model now I understand about two solid points and reasons that I would say theories
why, people think private label is a good business model however
I'm still confused with some people and why they really think because at scale there's so many people think that selling on Amazon through private
label is such a great business model I mean heck even some people think that selling on Amazon
literally means private label most people I learned
Messages my DMs right now from this one guy arguing back and forth saying no it's illegal to sell name-brand products on Amazon on Amazon
I'm like what are you talking about this is literally where most the revenues are happening and the least amount of sellers
So enough of that when we talked about the couple of reasons why I think
people
think private labels good business model and then I'll get right into why it does not work for most people the first thing is the hype
the hype and e-commerce and the hype of private label on Amazon there are a lot of people making
click baity videos and talking about how
private label is great a lot of people flash in their cars etc because they make money in private label
let me explain to you that yes
ecommerce is going up and a lot of people like to hype it up that ecommerce is going up people say
Oh brick-and-mortar stores are going to be closing because the e-commerce won't be very honest with you
Amazon in 2017 they were only two and half percent of the retail industry so yeah
ecommerce is going up its exponential the facts show that
however
just because
ecommerce is going up does not mean that
your brand that no one cares about is going up because private-label is the business model about
creating up your own brand so you take a product that is currently generic and
You slap your name brand on it and you go market it and advertise it
now a good example for this is I was actually at a Thai Lopez event in February and
They had some ecommerce speakers there and no disrespect to Tai Lopez I really respect tai Lopez
but the speaker's there I know them personally and I know they don't make much money at all
selling in e-commerce they make a lot of money money a lot of money
teaching people how to do e-commerce and about private label and create their own stores
but they don't make a lot of money in e-commerce they were talking about how
the video game industry is going really up in e-commerce and talking about how they should start to
private label and create their own gaming products brands and I was just thinking there because literally last year in 2018
I've sold over a half a million dollars of video games we're talking about Nintendo Sony Samsung we're talking about
Microsoft Xbox games PlayStation switch video games that you would see in
Game Stop and Best Buy
not the games that
someone creates of their own brand or their own gaming products I'm selling
PlayStation controllers I'm not thinking about creating my own PlayStation controllers so the things that's really going up in e-commerce because yes he comes to going
up facts show that what's going up is the name brands not the who cares no one cares about your name brand
Are we clear on that the second thing is going to be about people just want to recreate the wheel
Recreating the wheel for some reason people like to do that I have a lot of friends and family
and people call my youtube channel and for some reason I don't know why it might just be in America is that people think they
have to
create something completely new recreate the wheel or be the first one to
something and invention to make a lot of money and be successful in
life in making a lot of money a
lot of people are trying to think okay how do I create the next Eber well what's the next best app to make and
Why people don't know is that there are so many people before
that they were trying to make an uber app but whoever just executed
So let me give you an example is what do you think will be better for you or be a higher higher success
rate
owning
McDonald franchises or creating up your own burger joint because yes it's proven that
having a burger joint business is a proven business model however
Your burger joint is not proven McDonald's is so franchising out yeah
it's proven that would work and what do you think has a higher rate of success
So those are the two reasons the hype and people wanting to recreate the wheel now the people that are
recreating the wheel very well people like on Shark Tank because yeah this video is titled
most because there are people making money in private label if you take every single person who's on Shark Tank
those are private label sellers but what's think about that the odds of like you becoming someone right it's like a shark tank
person they're getting investments and they're creating up this big brand it doesn't really
the odds of doing that is not very high but even people on Shark Tank who are the best private label sellers are some of
the best
they're not starting on amazon.com
they're building and demand first and a brand they're making up their own retail stores and websites
however let me explain to you the number one reason actually the only reason I'm going to talk about because it's, so
significant for this video on why private label does not work for most and that's going to be about the skills that
the average person has in
branding marketing and advertising if
You answer no to this question you should not private label are you great at branding marketing and advertising
now if you are great at branding marketing advertising then yeah
maybe you could go try private label but I would even suggest you to actually think about
adding the business model of online retail what I do selling name-brand products to your business
because you can scale that
but if you think you're great in that then yeah you could try to go private label as well but I would say
Probably the average person watching this probably does not think they're great at branding and advertising and marketing which if you're not
private label is not the business model for you because you're creating up a brand that
no
One cares about and you have to go create that demand which creating that demand is going to have to cost a lot of money
and you took that money is off social media ads and what a lot of people do is
pay-per-click ads on Amazon what our pay-per-click ads pay-per-click ads on Amazon PPC ads are ads that you
place for your products that people want to buy on Amazon and
Whenever someone clicks on it we're amount of views are happening off of it I don't spend any money on pay-per-click ads
is
you are getting charged for that
So maybe it's like 30 cents a click a dollar a click
a really interesting story is actually was in a group of a book group with a few Amazon sellers
really high level Amazon sellers and there was a guy who his advertising cost for pay-per-click ads went to by
27 X in a span of four years
now why do pay-per-click ads rise in price is it because Amazon greedy no the reason why they go up is
because let's say
you're selling kendamas
Kendamas is a little Japanese toy the reason why I bring up kendamas is because I literally made a bunch of money selling kendama
through private label when I was 14 15 years old however let's say you were the first person to
private label kendama on Amazon and you advertise for the keyword kendamas because you realize that
people are searching for it so when people searched they see your
kendama come up and they buy it
but now let's say a second person does that so let's say initially you were paying 30 cents a click and
you're getting hundred sales per month and then instantly someone else joins
they're paying 30 cents a click and you guys are sharing at 50-50 sales
however
Someone's smart they're going to raise their cost to be willing to spend per click so their bid and then
They're going to outbid you and if you want to?
simply what's a call it get more sales or gonna have to outbid them and spend more money pay-per-click ads then if a third person
joins in a fifth six eight 20th person joins now the pay-per-click ads are so high that product is still in demand so
someone's gonna sell it and make money with it but that pay-per-click ads are going to go up and up in price
and that's really it that is the number one reason why people
can't have success in private label but now people can
but you need to be very skilled and have a large Buttered budget for advertising you need be an expert and
creative because at the end of the day
if you are not
adding value to the products you're selling which the value that I am adding for selling name-brand products because ask any Walmart Target Best Buy
at all is we are buying low in bulk and able to sell higher individually so we're being very economic with our prices and
selling or just literally selling the products that people actually want
But if you're not adding value or being creative with the brand's you're doing then you
especially need be very good at branding and marketing and advertising and that's it for this video if
You have any comments at all to say about this I know some people a lot of people will agree with me
maybe some people disagree
feel free to drop them down below in the comments but that's all I have to say for this video if you like this video
give it a thumbs up make sure to subscribe to my youtube channel where I talk about
selling name-brand products all the time on Amazon if you're a student of mine inside my Amazon course then I highly suggest to attend the
Vegas Summit that's happening on March 14th and 15
So it's it's live right now
I'm not sure where the pricing is but the pricing
Only goes up on the event as it gets closer to it so feel free to get your tickets right now for it
And meet me down in two days in Vegas on the 14th and 15th and learn some great content well that's all had to say?
For this video thank you so much like and subscribe and have a great day