Originally published January 31st, 2022
Last updated May 23rd, 2025
Have you looked online about the idea of selling products on Amazon, and came across the concept of “Private Label Selling”?
If you’ve been researching how to become an amazon seller, you’ve probably come across countless videos and guides on building your own private label on the Amazon marketplace.
If you look at recent discussions online on the topic, you’ll see comments like:
“You can’t compete anymore on Amazon with private label.”
“You used to be able to get away with private label selling a few years ago, but now it’s impossible.”
People seem to pretty much agree you can’t sell private label like you used to.
For the most part I agree, they’re not wrong about the old way no longer working.
Many newcomers still assume that dropshipping is easier, but miss the long-term value in launching a private label brand with better profit margins.
But where they are wrong is that it’s still possible, and it’s how most successful newcomers make it as an Amazon Seller.
The key difference is knowing how to create unique products and leveraging tools for better product research.
In this post we’re going to go over what exactly Private Label Selling is, what’s changed, is it still profitable, and how to be successful.
How exactly do people sell products on Amazon?
Before we dive into the details, let’s look at the 4 main ways individuals and small businesses begin selling on Amazon.
#1 Private Label Selling
This is the topic of this article and what we will go into further detail on in a bit.
Private Label Selling, historically, is when you take common products that exist, go directly to a manufacturer to have it made, then put your logo (or "Private Label") on the product to then sell on Amazon.
Many sellers source private label products from Alibaba and then ship them directly into Fulfillment by Amazon warehouses using Amazon FBA.
I know I started this post off with the idea that private label is dead, we’ll address that soon.
Pros of Private Label Selling
- Get started quickly. Simple product research can land you a potential product to sell, and dozens of manufacturers likely make that exact product you choose.
- Not much work in terms getting your product made. Contact manufacturers, pick the best one, ship it.
- Low starting cost. Simple private label products have decent scale, so prices of getting products produced is low.
Cons of Private Label Selling
- Competitive. maybe too competitive these days with international competition.
- Lack of differentiation. Hard to stand out from other offerings.
- To gain traction, your amazon listing must be fully optimized with strong images, bullet points, and SEO-rich descriptions.
#2 Retail Arbitrage
Retail Arbitrage is when people buy products at a discounted price either online or at a physical retail store and then sell it on Amazon at a profit.
Unlike private labeling, retail arbitrage doesn’t allow you to build your own brand or register through Amazon Brand Registry.
It’s an extremely simple concept, but it works.
This type of selling on Amazon has the lowest cost to get started, but it’s more about constant deal hunting than it is about creating a scalable business.
Regardless, many people have success with this method and it’s still profitable even in 2022.
Pros of Retail Arbitrage
- Lowest cost to get started. Buy a few products on sale somewhere local and flip them on Amazon.
- Simple. No logistics needed, no negotiations with manufacturers, spare yourself from a lot of headaches that typically come with running this kind of business
- Products already exist. You only need to find deals and resell them.
Cons of Retail Arbitrage
- Hard to scale. You’re always looking for deals. No deals? No sales.
- Huge time investment. You’re spending a lot of time in retail stores and thrift stores hunting for products.
- Surprising learning curve. Knowing what sells, what is allowed to be sold on Amazon, what to look for, and hitting your margins can be more difficult than one realizes.
#3 Wholesale
Possibly the most difficult of the 4, a wholesaler will find products from established brands, buys them at wholesale prices (hence the name), and sell them on Amazon.
Because you don’t control the listing, you’re constantly competing for the Buy Box, making margins tighter than with a private label seller approach.
This method is tough because it’s harder to turn a profit, it’s difficult to find product opportunities, and you have to compete with other sellers on a product listing to “Win the Buy Box”.
Pros of Wholesaling
- Nothing to create. You can sell already established brand products. No need to invent, design, or come up with anything innovative. You’re selling what already sells.
- High money making potential. Securing wholesaling deals across a wide variety of brands can create a company that generates a lot of cash.
Cons of Wholesaling
- You’re competing against others on the same listing. If you aren’t selling the lowest priced version of a product, there’s a good chance no one will buy it due to you not controlling the Buy Box.
- The most “traditional” of the business types. Wholesaling requires more to keep running when it gets big. That typically means warehouse space, equipment, employees, etc.
#4 Create Your Own Product
Now this is where things get interesting.
Creating your own product is exactly what it sounds like. You invent a product that doesn’t exist on the Amazon marketplace, and then you sell it.
This route often requires more startup capital, but gives you full control over your product line, branding, and quality control.
Pros of Creating Your Own Product
- Less competition. You made it up, so you have the advantage of being the first to sell it. Bonus if you have any patents to protect your product.
- Sustained time at the top. On Amazon, those who sell existing products have the issue of having something that sells well, the competition finds out about that success and makes cheaper alternatives, then that seller is forced to expand their product line again to keep pushing growth. When you create a brand new product, this is much less of a concern.
Cons of Creating Your Own Product
- It’s not easy. Inventing products is tough, from design to finding a manufacturer that can actually produce the product.
- Expensive. This might be the most expensive option of the 4.
- Can’t tap into search data easily. Most people on Amazon know what they want, product discovery isn’t high on the list of reasons why people come to Amazon.
These are the 4 main ways to sell on Amazon, but what if I told you there was a 5th way? One that was better than these 4?
I don’t have a fancy name for it, but let’s call it:
#5 Private Label Selling, The New Way
If you combine selling methods #1 (private label) and #4 (creating a new product), you can create a way of selling that combines the benefits of both while minimizing the weaknesses.
The modern amazon private label business focuses on improving high-demand products while using social media and TikTok to build buzz and drive early traffic.
With the new way to Private Label, you can still tap into existing demand on Amazon, you can create something unique that will take a long time for competitors to catch up with, and you can minimize costs to develop your product.
Instead of buying a generic product and private labeling it or creating an entirely new product, you innovate on existing products on Amazon.
This is how most people starting out on Amazon today will see success. It’s more work, sure, but any mature system like selling on Amazon will eventually become saturated and require more work to be successful.
How to Innovate Private Label Selling
Now that we’re no longer slapping logos on generic products, and have committed to innovating, how do we accomplish this task?
There’s quite a few ways to innovate on Amazon.
While this isn’t all you can do, some popular ways to innovate:
#1 Check Reviews for Opportunities
This is a tried and true method that successful sellers utilize all the time.
Fixing problems others ignore is one of the easiest ways to create a high-quality amazon fba product that stands out.
If you’ve identified the niche you want to create products for, you can start to list out products you want to compete with.
Then, what a lot of sellers do is look at each of these products and their respective 1-star and 2-star reviews.
What you’ll find is unhappy customers, typically giving reasons as to why they weren’t satisfied with the product.
Analyzing reviews, you can start to figure out how to innovate:
- Product came damaged often? Invest in better packaging.
- A plastic moving part of the product constantly breaks? Use metal or something more sturdy.
- Someone not happy with size/quantity? Offer a better size or a bulk version.
The possibilities here are endless, and you don’t have to think of any pain points to fix because the reviewers do it for you!
#2 Innovate on Logistics
Amazon charges fulfillment fees based on the dimensions and weight of your product, called product size tiers.
Smart packaging can lead to a lower price for customers while still protecting your profit margins.
When your product is on the larger side, it moves from a “small standard” size product into the “large standard” and then into small/medium/large/special oversize tiers.
If you can cleverly package a product, by reducing the dimensions of the box or by making it lighter, you can move it down a tier and greatly reduce fulfillment costs.
While this may not seem like much of a benefit, if you can knock $4-$5 off the fulfillment cost of your product, you’ve effectively increased margins in a way your competitors can’t.
You can offer your more efficiently packed product at a lower price than your competitors, and still take home a bigger margin. Win-win.
Any other advantages you can squeeze out, like manufacturing your product in a country that is cheaper and isn’t subject to tariffs, or managing your inventory perfectly, are great ways to save on costs that can give you an advantage on Amazon.
#3 Create an Eco-Friendly Version
Everyone loves an eco-product.
Eco innovations can help you break into saturated product categories where other branded products fail to differentiate.
The price of manufacturing environmentally friendly versions of products these days is remarkably close to their traditional counterparts.
If you can create an “eco version” of an existing product on Amazon, it will give you a great advantage.
No one will buy your sponges, that market is cornered. But eco-sponges made of coconut fiber, wood pulp, and are also biodegradable? That’s a compelling product people will take a chance on.
You can get into product categories you normally wouldn’t be able to compete in when you take the eco-angle.
#4 Go All In On Your Niche
There’s power in branding and design.
A powerful marketing strategy around your niche audience will support your pricing and drive loyalty across your fba business.
A weakness of classic private labeling is that the products available are extremely generic.
People today don’t want anything generic. They want something that feels purpose-made for them.
If you can narrow down an audience to a dedicated group of people that are passionate about a category, you've found opportunity you can turn into profit.
Let's look at an example:
This is Fellow. They make minimally designed products for coffee enthusiasts.
Their products are for people who take coffee seriously and will pay a high premium for something they’ll be proud to have on their countertops.
There’s countless kettles, travel mugs, and coffee grinders on Amazon, but Fellow went all in on a clean, coherent design that has garnered them an absolute ton of sales and reviews.
See how you can serve your niche better than what exists.
When you find that out, you can charge a premium that people will happily pay.
Is Private Label Right for You?
Private label selling today is hard because you essentially have to innovate for every single product you sell.
If you’re serious about building your own products under a recognizable brand name, this is the path that gives you the most ownership.
However, this is what you should be doing as a seller regardless of if classic private label selling was still viable or not.
Sustainable businesses offer great branding, uniquely designed products that their customers are proud to pay for.
If you can put in the extra effort to innovate, private labeling (the new way) is a great opportunity.
Is Private Label Selling on Amazon Profitable?
Most people don’t want to invest their money into something that isn’t profitable. This makes sense, as the whole point of investment is to see a return.
The step-by-step nature of amazon fba private label makes it approachable for startups looking to scale sustainably.
If you’re curious on the profitability of Amazon, a great resource on the recent profitability of being an Amazon seller is the Jungle Scout State of the Amazon Seller Report.
A few highlights that can be gleaned from this report:
- Profits are going up yearly for most existing sellers
- 85% of Amazon sellers run profitable businesses
- 64% are profitable within their first year
There are currently over 200 million Amazon Prime members. That number grows with each year, and is an audience you can tap into utilizing Private Label Selling.
So to answer the question, yes, Private Label Selling on Amazon is very profitable right now.
Conclusion
Despite its increased difficulty, private label selling on Amazon is still one of the best opportunities for creating an independent source of income that you own completely. When done right, selling private label products allows entrepreneurs to build an Amazon private label business that generates long-term value and brand equity. If you can leverage amazon seller central, manage your inventory management effectively, and stay active in trending niches, the potential is enormous.
By optimizing your product listings with SEO and launching a private label brand that solves real customer problems, you can dominate high-demand product categories.
With the information in this post, you should have a good understanding of how you can be competitive with private labeling. New sellers can use Amazon FBA to streamline logistics, improve fulfillment speed, and maintain high seller ratings without heavy infrastructure. Whether you're launching a new product or scaling an amazon business, private label still offers one of the most direct paths to building lasting value. With the right product research, keyword strategy, and pricing strategy, private label sellers can improve profit margins and stand out in a crowded marketplace. It’s still one of the best ways to make a brand from the ground up that you can actually start relatively small and grow into something huge. As long as you stay focused on innovation, customer experience, and data-driven decisions, your private label journey can be both profitable and sustainable.
So get out there, start innovating, and start selling!
FAQ
What is Amazon FBA private label selling?
Amazon FBA private label selling involves sourcing products (often through platforms like Alibaba), customizing them with your own brand name and packaging, and then selling them through Amazon’s Fulfillment by Amazon (FBA) program. This business model allows sellers to build a unique private label brand while Amazon handles storage, shipping, and customer service.
Is private label still profitable on Amazon?
Yes, private label selling on Amazon is still highly profitable when done strategically. With the right product research, optimized product listings, and competitive pricing strategy, Amazon FBA sellers can generate strong profit margins and scale efficiently. According to Jungle Scout, 85% of Amazon sellers report being profitable.
How do I find the right product to private label?
Successful private label sellers use product research tools like Helium 10 and Jungle Scout to identify high-demand, low-competition products. Reviewing customer reviews, analyzing competitor ASINs, and understanding search volume trends are also key to launching winning private label products.
What’s the difference between private label and dropshipping on Amazon?
Private label involves creating and selling your own branded products, while dropshipping means selling products you don’t own or stock. Private label offers more control over quality, pricing, and branding—making it better for long-term growth and profitability in your Amazon FBA business.
Do I need a trademark to start a private label on Amazon?
While you don’t need a trademark to start, registering one allows you to enroll in Amazon Brand Registry, which gives you access to tools for protecting your brand name, enhancing product listings, and running Amazon PPC ads more effectively.
What kind of profit margins can I expect with private label selling?
Most successful Amazon private label sellers aim for a profit margin of 20–30% and an ROI of 100–200%. Managing fulfillment fees, advertising costs, and product sourcing can help optimize your bottom line.
Can beginners succeed with private label products on Amazon?
Absolutely. Many new sellers use Amazon FBA to build their private label brand from scratch. With the step-by-step approach of product research, listing optimization, and strategic marketing, even beginners can turn a small investment into a profitable eCommerce business.
How important is SEO in private label selling?
SEO is critical. Your Amazon product listing should include relevant keywords, optimized bullet points, and a compelling product description to rank well in search results and increase visibility. Backend keywords and proper keyword research also improve your chances of reaching more customers.
Should I consider eco-friendly private label products?
Yes. Eco-friendly and sustainable products are in high demand and offer a great way to stand out in crowded markets. Many Amazon shoppers actively search for environmentally conscious options, making it a smart niche for private label innovation.
