I’ve heard stories of people successfully launching a private label product with just $500.
However, after doing some research, I think that $500 is very unrealistic.
You probably need about $3k. (I’ve put my estimates in the spoiler tag).
Is my estimate of $3K realistic? It seems awfully high, as the space is highly competitive so there’s no guarantee of sales.
A little background:
I really want to set up a business. I started doing Kindle Ebooks, which hasn’t gone very well, but I’ve learnt lots. In particular, fiction seems to be a good area to work, providing you really understand a niche, give customers what they want and deliver a high quality book (which is not trivial to achieve). Producing a book involves lots of waiting, especially when working with a ghost writer, so I thought a Private Label business would be the perfect thing to work on while waiting. But after reviewing the costs, I am having doubts. With an Ebook, you are owning risking around $500 (and because book readers have a big appetite there’s no reason why they won’t buy your book and a competitor's). Private label seems to have much higher costs and is far more competitive.
I know the forum can't make decisions for me, but I just want some insights as to if my thinking correct, or if I am just getting stuck on mental blocks?
Thanks for any insights!
However, after doing some research, I think that $500 is very unrealistic.
You probably need about $3k. (I’ve put my estimates in the spoiler tag).
Samples: Before you can launch a product you need samples. Expect to pay $50 on one set of samples. Realistically, you need samples from at least 3 different suppliers, as there’s no guarantee that any single one would be good. ($150)
Minimum Order: Depending on the product, expect to pay $1500 on a minimum order for 500 units.
Amazon FBA fees: Again it depends on the product, but you could easily be spending $1000 on FBA.
Building up reviews: The best and quickest way of doing this is by giving away products for people to review. You probably want to give away around 100 units (which in the example above would be worth $300)
Amazon PPC: Because the market is so competitive, Amazon PPC is essential. Probably need about $500 to $1000 to give it a good go.
Obviously, it depends on the product, but you could easily spend $3K, just to test an idea (which might not sell anything). And that’s before you take into account paying taxes (which vary from state), dealing with the costs of returns (Amazon FBA handles the return, but it’s still a cost). It also assumes that your first order from a manufacturer will be problem free.
Minimum Order: Depending on the product, expect to pay $1500 on a minimum order for 500 units.
Amazon FBA fees: Again it depends on the product, but you could easily be spending $1000 on FBA.
Building up reviews: The best and quickest way of doing this is by giving away products for people to review. You probably want to give away around 100 units (which in the example above would be worth $300)
Amazon PPC: Because the market is so competitive, Amazon PPC is essential. Probably need about $500 to $1000 to give it a good go.
Obviously, it depends on the product, but you could easily spend $3K, just to test an idea (which might not sell anything). And that’s before you take into account paying taxes (which vary from state), dealing with the costs of returns (Amazon FBA handles the return, but it’s still a cost). It also assumes that your first order from a manufacturer will be problem free.
Is my estimate of $3K realistic? It seems awfully high, as the space is highly competitive so there’s no guarantee of sales.
A little background:
I really want to set up a business. I started doing Kindle Ebooks, which hasn’t gone very well, but I’ve learnt lots. In particular, fiction seems to be a good area to work, providing you really understand a niche, give customers what they want and deliver a high quality book (which is not trivial to achieve). Producing a book involves lots of waiting, especially when working with a ghost writer, so I thought a Private Label business would be the perfect thing to work on while waiting. But after reviewing the costs, I am having doubts. With an Ebook, you are owning risking around $500 (and because book readers have a big appetite there’s no reason why they won’t buy your book and a competitor's). Private label seems to have much higher costs and is far more competitive.
I know the forum can't make decisions for me, but I just want some insights as to if my thinking correct, or if I am just getting stuck on mental blocks?
Thanks for any insights!
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