Private Label on Amazon: Advantages, Disadvantages and How to Successfully Trade with Your Own Brand
For numerous sellers, Private Labels on Amazon offer the ideal opportunity to present their own product on a very promising platform. But a mix is also possible: More and more Amazon sellers are choosing to sell both branded goods and their own Private Label products. If you are considering building your own business on Amazon by distributing Private Label products, we are happy to provide you with an insight into this business model with this article.
Basically, nothing special is needed: the identification of a suitable niche, the right approach to the target audience, careful calculation, a knack for e-commerce, and everyone has the opportunity to achieve solid returns. With these prerequisites, nothing stands in the way of your Private Label business on Amazon in 2025.
Private Label, branded goods, White Label, Amazon private labels – the jumble of terms
When talking about selling a private label on Amazon, it primarily concerns the sale of Private Label products. Nevertheless, you will find other terms such as White Label or even Amazon private label. What is behind each of these terms and do they perhaps have something in common?
What is Private Label?
Private Label comes from English and means private brand. Private Label products are therefore products that are manufactured for a specific seller so that they can market them under their own brand name. As a seller, you can modify the selected products according to your needs or wishes or make improvements. Additionally, manufacturers can provide personalized packaging at your request or print the product with your logo.
What is branded goods?
In contrast to Private Label, with branded goods you rely on already established brands and therefore do not have to create a new one. You act solely as a seller and would, for example, resell toothbrushes from Oral-B on Amazon. The brand is already known and customers will specifically search for this brand. As a seller, you then primarily need to focus on winning the Buy Box.
Already at the definition of the two product types, you can see some differences at first glance. However, a closer look reveals many more details that should be considered when choosing the appropriate strategy, which brings us to the next point:
What is White Label?
The difference between White Label and Private Label is very small and can easily be misinterpreted. Private Label or branded goods are a brand that is “exclusively” produced for a retailer and resold by them. For example, the private label “Ja” from Rewe. In contrast to Private Label products, White Label products are manufactured by a producer for multiple retailers. Each retailer is free to personalize the products after acquisition.
Some manufacturers even offer to prepare White Label products with personalized packaging and logo printing for sale. However, the business model focuses on the rapid production of standardized items and quick shipping to retail. White Label products are, so to speak, the preliminary stage of Private Label.
What are Amazon private labels?
Since 2009, Amazon has been offering affordable everyday items such as electronics accessories, office supplies, or gaming consoles under the brand name “Amazon Basics.” “Amazon Basics” is just one of the private labels of the online giant. Initially, there were only a few items available, but the retailer now counts nearly 2,000 products in the “Basics” line. In recent years, Amazon is said to have established over 80 private labels worldwide. Some of these are also clearly marketed as Amazon’s own brands – for example, “Amazon Essentials” or “Amazon Basics.” Others, however, are not immediately recognizable as Amazon private labels. Or does the name “James & Erin,” “Franklin & Freeman,” “Lark & Ro,” or “The Fix” bring Amazon to mind as a retailer? Rumors of a targeted attack on third-party sellers are still swirling. At the same time, end consumers perceive the quality of the goods as rather lacking. Amazon still has a lot of work ahead.
Private Label or branded goods – Which is better for Amazon sellers?
Another topic that is often discussed: Is it easier to sell Private Label or branded goods? Both differ in various aspects, including price, investments, Buy Box, as well as opportunities and risks. An overview:
| Private Label | Branded goods | |
|---|---|---|
| Purchase price | low | high |
| Selling price | flexible | inflexible, due to price competition with competitors |
| Investments | high | low |
| Buy Box | higher probability of winning the Buy Box | competition for the Buy Box from other sellers |
| Responsibility / Liability | high | low |
| Possibility to publish additional products under your own label | yes | no |
| Possibility to generate profit by selling the brand | yes | no |
Price
Private Label: The purchase price for no-name products is low, but there are additional costs for brand building and marketing. The selling price is less influenced by competition.
Branded goods: The purchase price is higher because these are established brand products. Additionally, the selling price is strongly influenced by competition, as they ultimately sell identical products.
Investments
Private Label: Generally, higher investments are required to finance brand building, marketing, and product development, taking into account larger order quantities and the associated shipping costs.
Branded goods: Sellers of branded goods typically need to invest less, as the brand is already established and brand building and product development are less labor-intensive.
Buy Box
Private Label: While you have exclusive Buy Box eligibility here, the competition in the search results should not be underestimated. However, as a seller, you have more freedom in pricing.
Branded goods: The sale of branded goods is heavily influenced by competition for the Buy Box. The direct price competition with other sellers is much more intense than with Private Label products. Therefore, flexibility in pricing is more limited, as you must constantly adjust your pricing strategies to the competition.
Opportunities and Risks
Private Label: Building and selling your own brand is, of course, a great incentive for many sellers. Many are willing to accept the greater responsibility that comes with both the brand image and the quality of the products.
Merchandise: With merchandise, the entrepreneurial risk for beginners is generally lower, as they sell products from already established brands that often have a defined target audience and brand awareness. This eliminates the need to build their own brand from scratch, which would require time, resources, and know-how. However, sellers of merchandise have no opportunity to develop and strengthen their own brand, making it more difficult for them in the long term to build a loyal customer base.
Overall, both strategies offer advantages and disadvantages. Private Label allows for the creation of one’s own brand but requires higher investments and more effort. Merchandise is lower risk but does not provide an opportunity to build one’s own brand. The choice between the two types of products depends on the individual goals and resources of the seller.
What are the advantages and disadvantages of selling Private Label products on Amazon?
Selling your own products is tempting, but it also carries the possibility of making mistakes in many areas. Below, we present the opportunities of Private Label, but also the risks.
Advantages of a Private Label Business on Amazon
Private Label allows you to differentiate yourself from the competition and leverage Amazon’s broad customer base to your advantage. By developing and presenting your own unique products and brands, you create a distinct image in the minds of customers. Amazon, which has now surpassed Google as the leading search engine for products, offers a platform with immense reach for your goods. This enables you to effectively position your brand while utilizing Amazon’s extensive resources.
1. Building your own brand presence is possible
As a Private Label seller, you can attract customers’ attention through customer service, custom packaging, and an appealing Amazon store. Your uniquely designed brand store with a customized header, tiles, and product categories provides potential buyers with clarity and closely resembles an independent online shop, while leveraging Amazon’s customer reach. With your own brand store, you can communicate your brand and its unique features more effectively and create stronger purchase incentives.
2. Develop USPs with Private Label products and provide added value
By developing USPs, you can target a clearly defined audience with special or even unique products and provide real added value. As a Private Label seller on Amazon, you have all the means at your disposal, such as customizable A+ Content or a comprehensive Amazon PPC offering, to target your customers more effectively. If you are ready to invest time and money in designing the product pages and providing particularly valuable information, you can significantly ease the purchasing decision for consumers.
3. No direct competition on the product listing
Third-party sellers on Amazon must expect a lot of competition. Here, price often plays a very significant role. Even with Private Label sellers, the items will not sell by themselves. If you want to prominently place your products on Amazon, you will not be able to forgo additional advertising bookings. However, on your product listing, you are usually the only seller, and the Buy Box typically belongs to you automatically.
4. Under control: Product listing, keywords, and text
In contrast to third-party sellers, Private Label sellers have more control over their offerings. They can personalize their product pages with texts, images, keywords, and descriptions, thereby giving their brand a unique character. This allows for more efficient targeting of the audience with relevant content.
This is how an Amazon keyword tool improves your ranking. We will show you what other strategies exist and where keywords can be entered on Amazon.
5. Higher profit margins
Amazon customers often pay more for products due to their high trust in the platform and customer service. As a brand store owner, you can encourage customers to spend more—through top-notch service, detailed product pages, and a comprehensive offering that meets all customer needs.
6. Support in building and protecting your brand through Amazon Brand Registry
Amazon offers registered Private Label brand owners Brand Registry services to support brand building and protection. This includes A+ Content, Sponsored Brands, and own shops. The protection of brands and intellectual property on Amazon is also covered. With the “Transparency” tool, sellers can add a unique code to their products to prevent counterfeiting and abuse, which benefits both brand owners and customers.
Disadvantages of the Private Label Business on Amazon
The business as a Private Label seller is promoted in the YouTube videos of alleged self-made millionaires as THE business idea. THE ONE China product is ordered from the beach in Bali and shipped directly to Amazon’s FBA warehouses. And then the big money printing begins.
Is it really that easy? Certainly not. Like everywhere else, selling on Amazon in general and building your own brand in particular is hard work. P.S.: Betting everything on one product does not lead to success, but in the end costs a lot of money.
1. Importing from China carries risks
Low net unit prices, a rich selection of manufacturers and products, as well as great flexibility in custom product manufacturing—these are the main arguments for importing from China. At the same time, these only apply in certain cases, such as with high order quantities, low freight sizes, and in specific product segments. Those who import from China must also expect risks and disadvantages. To protect themselves from this, sellers often have to work with import agencies that then take care of the quality of the goods, communication with the manufacturer, the necessary licenses and certificates, any delivery difficulties, etc.
2. Long delivery times and high planning effort for reorders
Private Label products are only produced upon order from the online seller and therefore cannot be reordered or delivered on an ad hoc basis. Regardless of whether you are working with Chinese or European manufacturers, you must expect longer delivery times. This increases the planning effort for reorders. If an item suddenly experiences high demand, you can quickly run out of stock with delivery times of up to eight weeks.
3. Full product liability and declaration of conformity
If you choose Private Label, you become a quasi-manufacturer. To protect European consumers, there are legal regulations and directives that a product must meet to be imported into the EU. This applies, for example, to electrical devices, toys, or products that come into direct contact with food or the human body. As an importer, you must inform yourself in advance about the evidence, certificates, and labeling that the products require. If you want to work with manufacturers from Asia, it may be a good idea to hire an import agency that takes care of all steps of manufacturing, licensing, certification, customs, and delivery from Asia.
4. High costs for small quantities
Regardless of whether you are working with Chinese manufacturers or EU companies, you will incur high costs for small quantities of goods that you request, for example, for testing.
5. High marketing effort to promote brand and product
With Private Label, you are in control, but you must dig deep into your pockets to gain the favor of customers while building your own brand. Time also plays a significant role. Whether it’s A+ Content, detail pages, or running advertisements—everything requires time and money.
6. Last but not least – often requires startup capital
As you may have gathered from the previous points, operating a private label on Amazon requires a significant amount of startup capital. To remain competitive, you must ensure that product costs stay low. This means you need to order in large quantities. A private label is indeed a long-term investment.
How does Private Label selling on Amazon work in 2025?
Amazon is constantly evolving, just like the competition on the marketplace. Many Chinese manufacturers are now conquering the trading platform themselves, instead of just selling their goods to online retailers in Europe.
What aspects do you need to consider in order to sell profitably on Amazon as a Private Label seller in 2025?
Product research and market analysis
The market analysis serves to provide information about the status quo regarding industries, customers, competitors, and other market metrics before your product is launched. What should you start with in your research? We would like to give you a brief overview, which by no means claims to be exhaustive.
Product research
If you are starting completely from scratch and have no idea which products you want to enter Amazon with, it is worth looking at the bestsellers lists. Here you will find products that have high demand and are generally sold reliably. Special tools can greatly simplify the research. However, manual research and some tricks, such as the 999 method, can also help in finding the right product.
Target audience
Do not lose sight of your potential customers during product research. Defining the target audience is of great importance when building a Private Label business on Amazon. The emotional connection of the target audience to your product is more important than its size. If you know your target audience well, you can create attractive offers and bundles during product research, thereby generating more sales.
Competitor analysis
Competitor observation is also part of market analysis. On Amazon, there is nothing that doesn’t already exist. Therefore, assume that your customers will quickly look for alternatives. Before you start as a Private Label seller, closely observe your potential competition and find out how they position themselves on Amazon, what ads they run, what USPs they communicate, how the A+ Content is designed, and so on.
Ask yourself: What added value can I offer my customers to leave the competition behind?
List the advantages and disadvantages of your competition. Observe how the items are marketed and do it better or differently than your competitors. If the quality of your products, customer service, shipping speed, or product information is better developed, you are already collecting many points at this stage and creating unique selling propositions for your presence.
Niche or broad positioning – which brings more profits on Amazon? Read our report on competition in the largest marketplace now.
Domestic manufacturers or “Made in China” – what suits your Private Label business?
When researching the right supplier, one often looks to China. As we have already mentioned, working with Chinese manufacturers involves a lot of effort, and you often have to expect longer delivery times. This increases the planning effort and can potentially lead to you going out of stock during a rising demand for your products, causing you to miss not only the trend but also lose the Buy Box.
Sourcing from the Far East has its disadvantages, which in turn form the foundation for the advantages of EU sourcing. A supplier from Europe is significantly more expensive, but as a seller, you have more security. You can purchase already produced items in small quantities and quickly and flexibly reorder as needed. The importer is responsible for compliance with all regulations, as well as for any damages.
Creating a seller account – what fits your private label business?
After you have completed your market analysis and are sure which products you want to sell on Amazon, the setup of the Amazon seller account follows
At Amazon, as a seller, you have two options – Basic account or Individual tariff or Professional tariff
Individual tariff
The creation of the individual account is free of charge. However, you must pay a commission of €0.99 per item for each sale you make on Amazon + percentage selling fees, which depend on the product category and are around 7-15%. This fee model is designed for sellers who sell less than 40 items per month.
Professional tariff
In the professional tariff, you have many more design and usage options available, such as a better overview of sales figures, adjustment of shipping costs, list uploads, detailed sales statistics, and much more. The tariff is worthwhile when selling more than 40 products per month, and you should set this minimum goal for yourself.
We recommend starting with an individual account before you actively begin selling and thus enter self-employment. Once your products are listed and ready for shipping, you can upgrade to the professional tariff.
Registration of a private label for sale on Amazon
Registering the brand with DPMA or EUIPO protects your trademark rights and is essential if you want to run a private label business on Amazon. When registering, you must not overlook that trademark protection is always territorial. Those who have registered their brand with the DPMA will not be able to take action against unauthorized use in China.
But did you know that you also have the option to protect your brand directly with Amazon?
It can happen that third-party sellers use an already existing ASIN to sell counterfeit products at a lower price or to change the product description. And believe us, this happens quite often. Brand registration with Amazon eliminates this problem: Through brand registration, the brand owner gains access to Amazon tools that allow for easy monitoring and reporting of violations of trademark rights to Amazon. This way, you can quickly get rid of the infringers.
Selling Amazon private label products via FBA
If you plan to sell your private label products on Amazon directly through Fulfillment by Amazon (FBA), you need to consider the size of your future items and bundles already in the product research phase. The calculation is quite simple: The smaller the product, the lower the shipping and storage costs.
The fact is: The private label business is often associated with FBA, as the service is perfect for those who want to focus on marketing and distributing their products. FBA not only simplifies shipping, customer service, and winning the Buy Box. An FBA seller has the attention and access to the most affluent target group on Amazon – the Prime customers. 34.4 million potential customers with immense purchasing power alone in Germany, who are also known to make purchasing decisions extremely quickly.
Private label and the Amazon Buy Box – guaranteed profit?
Unfortunately, it’s not that simple. As a private label seller, you must adhere to the rules like everyone else on the Amazon marketplace to win the Buy Box. As a new seller, you need a 90-day sales history to gain access to the Buy Box. Until then, your listing remains in the only partially visible area “Other sellers on Amazon.”
What happens after these 90 days? If you can demonstrate a flawless sales history, top-notch service, and shipping, you will gain access to the Buy Box and can retain it. But what does “flawless” mean? Good news: You do not have to compete with other competitors on the same product page. However, you can still be sanctioned for poor performance.
Conclusion
The sale of private label products is neither a magic bullet nor an old hat, and it is certainly not a guaranteed success. Instead, you need a lot of knowledge and must work seriously for your success. So don’t run blindly into your own doom just because a few self-proclaimed YouTube coaches promise you your first million.
Nowadays, sellers have more know-how and opportunities than just a few years ago. Those who want to do it right will have to take care of building the brand and subsequently providing the added value that the competition does not have. After all, that is the purpose of private labeling – to stand out from the competition.
Amazon offers many technical possibilities, services, loyal customers, and last but not least access to the international market to successfully sell with private label products. Well-informed and prepared, anyone can write their own success story.
FAQs
The choice between private label and trading goods as an Amazon seller depends on various factors. Private label offers the possibility of higher profit margins and brand building but requires investments in product development and marketing. Trading goods are less risky and require less investment but may be exposed to more intense competition.
In addition to the previously mentioned costs for marketing and product development, private label is also associated with the risk of uncertain market acceptance, significant competition, and a longer lead time to profitability. Brand building requires continuous efforts in marketing and customer service. There is a risk that the product may not achieve the expected success or may be surpassed by other competitors.
The biggest advantage remains the opportunity to build and establish your own brand. By developing and selling your own products under your brand, you can offer unique products that stand out from the competition. This allows you to build long-term relationships with your customers. Additionally, private label gives you greater control over pricing, product quality, and brand image.
Image credits in the order of the images: © ontsunan – stock.adobe.com / © bloomicon – stock.adobe.com
