I Started My Side Hustle Selling Private Label eCommerce On Amazon and So Can You! - #024

Show Notes

Amazon is ranked as the 4th largest website in the world. And for good reason, all of its traffic is there purely to shop and spend money! As a side hustle, Fulfillment By Amazon (Amazon FBA) allows individuals to sell private label products online without having to maintain an inventory. Lori Vajda and Nola Boeá had questions about what it takes to get started as an Amazon seller. The co-hosts sat down with guest Gina Fontana, so she could share her experience selling private label products on Amazon, all while managing her full-time photography business.

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Sticky Brand Lab

Amazon private label seller strategies are in the works. Come have a listen!
In This Episode You’ll Learn

• Whether private labeling might be a good side hustle for you
• How Gina got interested in private labeling
• The basics of how private labeling and selling on Amazon works
• What a private label product is and why it’s popular to sell
• The advantages of using Fulfillment By Amazon, or Amazon FBA

Although Gina is relatively early in her journey selling private label products on Amazon, she explains that the longer-term possibilities for growth are unlimited. As Lori and Nola quickly realized, just like with any business, there’s a certain amount of uncertainty that comes with being an Amazon private label seller because there are no guarantees of product success. However, understanding the startup costs for items such as software, registering your business, production, inventory and shipping costs for your products, label design, and Amazon fees, can help you make an informed decision as to whether or not this is a good investment for a side hustle business.

• (5:59.52) A simple way to determine if an item is worth investing in for private label selling. 
• (7:10.82) This is a great tool to help sellers see which are the popular items being sold on Amazon and what their profit margins are. 
• (7:44.44) The biggest reason for using Fulfillment by Amazon isn’t just that they keep your inventory in their warehouse. 
• (8:55:78) Where to source products and the cost saving reason for making sure the vendor is reputable.
• (11:39.91) The basic startup costs before you can even begin selling on Amazon. 
• (12:57:69) The 4 best reasons sellers should consider for not shipping items yourself.
• (19:12:63) Gina shares her ‘lessons learned’ so you can avoid these mistakes.

Resources
This episode was supported by: Be-YOU-nique

Transcript

Nola: [00:00:00] We are all about having multiple streams of income. It's the reason we started this podcast so we can help aspiring entrepreneurs get started on their business journey. For side hustlers, who aren't ready to invest in their own e-commerce website, selling retail items through Amazon and eBay can be a great alternative.

So whether you've been wondering about this opportunity and want to learn more.  Or you're already selling on the popular platforms and want more information about sourcing products, advertising and getting your items to rank on the search engine, stay tuned because we're exploring all of that, and a lot more on this episode of private label selling side hustle.

Announcer: [00:00:36] You're listening to the Sticky Brand Lab podcast, where time strapped professionals, like you learn how to create a business you love in as little as three hours a week.

Lori: [00:00:47] One of the reasons e-commerce space is so popular is that unlike brick-and-mortar stores online selling allows you to make money any hour of the day or night, 365 days a year. And as a seller, you don't have to be present to sell. Amazon and eBay have been the most popular e-commerce platforms for many entrepreneurs over the last several years. And that has certainly been the case for Gina Fontana, president and founder of Bakehouse 23. Gina is a photographer by profession and established a line of branded baking products as an additional stream of revenue. And she's our guest today to help us understand the ins and outs of private label selling.

Hello and welcome aspiring side hustlers, Lori and Nola here with an online retail perspective episode of Sticky Brand Lab. But before we explore the journey from sourcing to selling, be sure to subscribe to our podcast on Apple podcasts, Google podcasts, Spotify, or wherever you listen to podcasts. That way you'll never miss out on any of our weekly helpful, informative, and always opinionated podcasts. Now let's get this full of Amazon easing information shows started. Did you get what I did there? Amazon, amazing. Yeah. Okay.

Nola: [00:02:09] Well, there are lots of ways for side hustlers to make money online.  Recent reports indicate that Amazon has seen a 40% increase in sales across the board due to COVID. And some are predicting that this could continue post COVID. As more people have become familiar with shopping online. For inspiring side hustlers, private label selling as a potential income stream has become an idea worth exploring. However, the road from idea to online marketplace is not as easy as one, two, three. Go. But if you are committed and determined, you may just find yourself the proud CEO and founder of your own product line. Like our guest today, Gina Fontana, Gina is a professional photographer, videographer and video editor with over 18 years of commercial and photojournalism experience. Her diverse client list includes professionals, advertising venues, healthcare, humanitarian agencies, and businesses. Gina's passion for photography has earned her high recognition and awards.  Welcome Gina. So glad you're here.

Gina_F: [00:03:11] I'm so glad to be on the program.

Nola: [00:03:13] First we want to clarify a few things for our listeners selling items on Amazon falls under Amazon's FBA umbrella. Something that we didn't know and had to look up was that FBA stands for Fulfillment by Amazon. Second, there's a difference between private label and white label product selling another thing we had to look up. White label is when you take someone else's product and put your name on it. In this situation, you, the seller are directly selling a product that it's developed controlled and serviced by someone else. Private label, on the other hand is when you contract with a manufacturer to produce a product to your specifications.
Uh, and this can result in a much higher profit margin because you're paying someone else for the manufacturing. When you private label, you're putting your own branding or logo on the products you're selling, this protects the product line so that no one else can steal or use your exact designs or logo and things like that. Does that sound right?

Gina_F: [00:04:16] Sounds right to me.

Nola: [00:04:17] So which are you on Amazon? A white label, or are you a private label seller?

Gina_F: [00:04:24] I am a private label seller.

Nola: [00:04:26] Okay. Gotcha. Tell us about that journey. What made you decide to sell your own line of baking products on Amazon?

Gina_F: [00:04:33] Well, as a video editor and a photographer, I am always watching YouTube videos on how to do things. And a commercial always appears before the video that you want to watch. And there was a commercial about becoming a private label vendor on Amazon and kind of like join this how to course. So I said to myself, Oh, I wonder how hard that is to do. And it was during COVID at the beginning of COVID. So I had plenty of time on my hands because unfortunately all of my clients pretty much postponed, canceled, you know, it was just pandemonium broke out. So I have the day, so I started like investigating and I was like, well, I, I wonder how this all works. So that's what kind of peaked my interest. And then I went onto Amazon and I started watching all the, kind of, how to videos that they have available on how to sell on Amazon. And I was like, wow, that sounds really interesting. And it kind of just went down the rabbit hole.

Nola: [00:05:39] Well, that's cool. It seems like what, started to be a downer with, uh, all your business coming to a complete halt, turned out to open up an unexpected opportunity. I'm just curious why you chose a silicone baking mat. Are you a cook?

Lori: [00:05:55] Or Baker.

Nola: [00:05:56] for Baker? Yeah, that's what I meant. Yeah.

Gina_F: [00:05:59] specifically a baker, but I do cook a lot and the mats are really, really great for almost anything that you bake or cook in the oven. It's not just for pastry type things. So we've been using them for years that we got from another vendor that was selling on Amazon. The same item. And it seemed like every time we went to go order these, they were out of stock. So we're like, I was like, wow. You know, these are out of stock a lot. Maybe this is a great item to sell on Amazon. So they were sort of in the profit margin that I was looking for per item. So I thought, well maybe, maybe I should give this item and try it.

Nola: [00:06:43] That's a reasonable, uh, assumption.

Lori: [00:06:47] You can you explain to us how wa uh, private label on Amazon works?

Gina_F: [00:06:52] Basically, you first have to find an item that is a good sell on Amazon, or find something that there's not a lot of people selling on Amazon is kind of like a good way to start. And to find something that has like a good, you know, rate of return. There's a whole program  it's called Jungle Scout. and Jungle Scout, is an entire website that's dedicated to helping people find the right items to sell

Lori: [00:07:21] wow.

Gina_F: [00:07:22] And through there, you can see the different items that people are selling and you can see what kind of profit margins there are.

Lori: [00:07:30] That's a really helpful tool. I, we will make note of that and put that in our resources page as well for listeners.

Gina_F: [00:07:36] So I really knew nothing about it. I just started reading what other people were doing.  Of course I learned about Fulfillment by Amazon, which is definitely, I think the best way to go if you're going to sell on Amazon, because they take care of all the shipping and handling, you, send your stuff to them. They have a whole system of being able to get your item when somebody orders it and ship it out to them. And that covers. the shipping costs, which, if you were to ship most items yourself, you would actually spend more on the shipping than what you would with the, Fulfillment by Amazon method.

Lori: [00:08:13] Oh, that's interesting.

Gina_F: [00:08:15] They have a method of offsetting that, which is basically you have to pay Amazon to be seen, to get your product on the first or second page, there's a bidding system. And if you know anything about Google ads, it's very similar.

Lori: [00:08:31] okay.

Gina_F: [00:08:32] I didn't really know that much about that when I started, I thought, Oh, you know, I can learn about that when, after I get through these other steps that I need to do. So to me, the first step was, you know, identifying a product that I thought I wanted to sell. Then finding a supplier in China and I used, um, Alibaba. I, I would recommend it to people to go through Alibaba because there's some insurances with using Alibaba. If you were just to, try to connect with, a manufacturer in China going outside of Alibaba, I wouldn't recommend that because I think that you just really have no guarantees. Here, the, vendors that are on Alibaba, they want to stay on there. And if you were to make a complaint or, you know, have a problem with them, like a serious problem, where basically you gave them their, your money and then you got nothing or they weren't really a real vendor. Just to eliminate that problem or that you might, you know, get scammed, this is not a scam. And Alibaba, I think is very credible. A lot of people have asked me, you know, well, why didn't you buy products here in the USA and use those items on Amazon to sell? Well, I researched that and there really aren't a lot of manufacturers in this country. And that's why, you know, I recommended that, you know, people look on Alibaba. It's not just China, there's a few other countries that have factories that you can buy from through there.

Nola: [00:10:09] Okay. So back to manufacturer in China, what was that like.

Gina_F: [00:10:14] Basically you just email people through Alibaba's website. And start asking for quotes and you send them kind of like specs of what you want and it goes back and forth and back and forth. And they're up in the middle of the night because of the time difference between China and the US, and it's, it's crazy because you can ask a list of like three questions. And the response back is like none of those things you asked.

Nola: [00:10:43] Oh, that's because of the language barrier, huh?

Gina_F: [00:10:45] Yeah. I guess it's because of the language barrier, you know, I mean, they can write in English, but you kind of have to build a rapport in a way with the person who's handling the sales for the company.
My next step was getting a logo made because I mean, you really can't have a product unless you have a logo for that product.  So I went to Fiverr there are people who make logos on there. So I selected somebody from there. I sent them what I wanted and they built a logo for me. So that was great.

Nola: [00:11:17] I've used Fiverr before.  And it's a hit-and-miss, um, and I've actually found that if I want to get a logo made, I will choose at least three different designers, send them the same specifications, the same requirements And then when they all send back their suggestions, I usually fall in love with one and then go with that one. But, uh, they can be a good place to find low-cost design.

Lori: [00:11:39] Great. Um, what are some of the startup costs a person could expect to incur if they're doing some private label selling for products?

Gina_F: [00:11:49] Well, first you need a corporation or an LLC. So you need that just to even start, getting your seller account on Amazon. So that would probably be the first cost. And, I used my photography business, my corporation, um, so that didn't cost me anything. But if I were to do it again, I think I would have opened an LLC, so I could have things separate and I thought, well, if this takes off at a point, I might try to do that. But once you have your seller account set up and your ranking start, you really don't want to change it. So it's something I need to revisit.

Lori: [00:12:28] Are there other, costs beyond incorporating that people should expect?

Gina_F: [00:12:32] Yes.  There's basically two ways you can do it. One way you pay a monthly fee, I think it's like $45. And then the other way you pay $1 per item, you sell.  To get those numbers exact, I'd have to look it up because I don't remember exactly what it is.

Lori: [00:12:49] I think either way though, that you're either paying a monthly fee or you're paying a cost based on the product selling.

Gina_F: [00:12:57] Yeah. And then at that point you have to decide if you're going to ship out your items yourself, which makes it that you cannot be on Prime if you ship out your items yourself.

Nola: [00:13:08] And some people will only order things if they're offered on Amazon prime, because they want the free shipping.

Gina_F: [00:13:13] Yeah. They want the free shipping and they want to get the item quickly, which is also a huge advantage of Amazon Prime because they already have the items in their warehouses and then they pick them and then they ship them. Whereas if you were doing it yourself, you would be responsible for boxing up the item or stuffing in a bag, making a label getting it over to whoever you are using to ship. And ship it out. Now, if you had a really great system to do that, maybe that would be a good route to go. But if you don't have a warehouse, you don't have a staff. You don't, it's just, you, you might want to consider doing the FBA where you send them a box of your stuff and they do all that stuff for you. They ship it out.  That's what I did because I did not want to be responsible for shipping out the item. And then of course you exclude yourself from all the Prime members. And I think that a lot of people, especially now, if they weren't on Prime before they probably, or on prime now.

Lori: [00:14:17] Well, and also just the added up costs. I mean, if you have to do it yourself, You're a small person. You're not sending out big numbers, uh, to places. You're going to pay a higher postage fee than they are. So your customer's going to pay for it one way or another, but because they have bulk items and they have, uh, their own system for doing that, you're paying the monthly fee or you're paying off the cost of the product.

Gina_F: [00:14:46] Yeah, there's, a couple of, um, groups that will do that for you. I think ShipStation will do that for you too, where they'll help you reduce the amount of money that you're using on shipping. But I think that you would also need to like package up your items. So basically you would need to buy an envelope. Mean, there's, every little thing has a cost by, you know, a huge bulk of envelopes to send out your stuff and then you'd have to get labels. You have to get, you know, make sure that you're printing out the labels.  They do charge you for all that. Don't think it's as much as if you were to send up the item yourself, unless you really have a production area, they can handle that for you.

Nola: [00:15:27] So you needed to purchase from the manufacturer and send them to Amazon. Right?

Gina_F: [00:15:35] Yep. I bought 2000 and, originally when I got into this, I thought I was just going to send all of them to Amazon. They were going to sit in their warehouses, and when people ordered them that they would be gone. So then because of COVID Amazon limited how many items they will keep in stock of certain items. Oh, so I can't ship them directly to Amazon and all that stuff. And I was like, okay, well, since I already bought them, let me have them shipped to my house and I will store them in, you know, air-conditioned space until, I can send a hundred or 200 to Amazon at a time.

Nola: [00:16:12] and has that worked out?

Gina_F: [00:16:14] Yeah, it works out because the way that, Amazon works with, I guess it's ups um, where you get a reduced shipping, deal with them when you send out, like, usually I send out boxes of 50, every week or two, which isn't that hard to do.

Lori: [00:16:29] So it sounds like the mat has done pretty well.

Gina_F: [00:16:33] Well, the mat's done, okay. The problem with, selling on Amazon is you need to have a lot of patience. Because you, you need to have a lot of reviews and it takes a long time to acquire those reviews and also for to gradually move up so that you're not paying as much in advertising. So I think the best thing to do is to start small with an item that you think has a good, you know, rate of return. And to do some social media too, I, I showed my item on social media. I had it on Pinterest, I put it on LinkedIn. Um, I did a little demo video showing how to use the item.

Nola: [00:17:14] cool.

Gina_F: [00:17:16] I wouldn't say it's like a huge success overnight. I mean, people always see these huge success overnight stories, and I'm sure it happens, but, um, creating your own item, putting it on Amazon. I think you're better off with like a small number and test the waters at first and see how your, your item sells, if I were to do it again, I don't know if I would have gotten as many items as I got, but it kind of doesn't matter, cause I feel like I'm in it for like the long haul on this item. And I think it would probably take quite a while for it to like really catch on before and I can be like, wow, this is making tons of bucks.

Nola: [00:17:56] you bring up a good point and we really want to dive further into that kind of insight. When we come back, Gina will share her setbacks tips and recommendations for anyone else who might be thinking of launching and marketing a product.

Ad Spot: [00:18:12] Are you an aspiring entrepreneur, who's ready to share your vision with the world, but you're not sure exactly what that would look like. Or do you just want a safe soundboard to help you evaluate your top business ideas then a B unique session is just what you're looking for. This two-part clarity session is customized and based on your individual goals and experience together, we will help you determine your ideal business niche, target audience, and strategy. You'll leave the session with a realistic timeline and a set of small-step, big-win goals that make sense for you and your lifestyle. Sign up today for a free 20-minute consultation at stickybrandlab.com/shop.

Lori: [00:18:51] Welcome back to Sticky Brand Lab, where we show you how to turn your knowledge, passion, and great idea into an income stream, so you can create a side hustle and lifestyle. You're excited about. It's possible for a side hustler to make money even pretty good money selling private label products. But it's certainly not a get-rich-quick business. Gina, can you speak to this?  What lessons learned might we gain from you?

Gina_F: [00:19:18] I think the thing that I would do, if I could go back in time is learn more about advertising on Amazon. Learn more about the costs because the costs are really hard to accurately calculate because it's a bidding system. So you put in, you know, I'm willing to spend $5 a day or $20 a day or a hundred dollars a day advertising my item. But you really don't know how many items you're going to sell in that given time. So it's kind of really tricky, I think the more, you know, about that aspect, the better off that you will be. And that's an aspect that I thought, Oh, I'll leave that for later and figure it out. But I think that you know, was, not the real route to go.

Nola: [00:20:04] What suggestions would you offer to listeners who might have an idea for selling their own private label products?

Gina_F: [00:20:11] I would say first, do your research, you know, and make sure that your item is in demand. I think a lot of it has to do with getting an item that you can buy low enough where you, do have room because the advertising does cost a lot. And to make sure that you insure your items during shipping, because you might be spending a few thousand dollars or more buying your items, make sure that when your items are shipped, that you have insurance on those items.

 Um, the other thing I would say is to go onto, the Amazon seller university, that is free to watch for anybody that is interested. And to look at all the different steps that you need. You need to get a bar code for your item and you, how do you get a bar code for an item? I found out you have to go to GS1, which is a nonprofit organization that sells barcodes and you have to buy them. And, you have to be really careful to make sure that you're not going to have a problem with your barcode. Because if you do, once the item gets to Amazon, they charge you reprocess all those items and they could charge you a dollar per item or even more.

Nola: [00:21:25] Ouch.

Gina_F: [00:21:26] Yeah. That could really hurt if you don't have, you know, a really good rate of return for your item. So I would say, you know, buy low and sell low, which is weird. Most people say buy low and sell high, but you have to sell competitively. you have to do a lot of research and see what people are selling that item for on Amazon, because you cannot price your item, higher than other people, because what is the incentive for people to buy it, unless it does something that the other items don't do.

Lori: [00:22:02] Those are great tips. Thank you. switching gears just a little, uh, Nola. And I, we love eating. As a matter of fact, it was over dinner that the idea for sticky brand lab and this podcast came about and we thought it would be interesting to see what your personal favorite recipe is, Gina and how it reflects your own experience and journey to successful entrepreneurship.

Gina_F: [00:22:27] Good sugar cookies, because I'm there's a lot of different ingredients in sugar cookies, and unless you put them all together perfectly, it doesn't come out. So, know, I think the ingredients, of researching items that you want to sell on Amazon, learning about advertising on the platform, you know, finding an item that you really love and that you use and that you would like to share with others, just like you'd like to share your cookies with others. You don't want to eat them all because you'll get fat.

Lori: [00:23:04] Or in the case of a product, do you want to sell it so that you thin out your house?

Gina_F: [00:23:10] Yeah, you want, to sell your items so that you can recover the money that you put into buying your items and get a profit, which would be sweet.

Nola: [00:23:20] How would it be sweet? Just like sugar cookies.

Lori: [00:23:24] that's a good, that's a great, great connection there.

Nola: [00:23:26] So we have a few fun questions to ask you too, just so our listeners can get to know you a little bit different, um, more personal level.
 
Lori: [00:23:35] Um, tell us, what are one or two of your own kind of weird little quirks.

Gina_F: [00:23:40] Oh my gosh, it gets so many weird little quirks.

Nola: [00:23:43] That's why we limited it to one or two

Gina_F: [00:23:48] Probably one of my weird little quirks is I really don't like anybody touching my camera equipment and the, actually it was so bad when I was younger. With, you know, like people touching, like my stuff, I hated it when somebody would like, even like change a radio station in my card. But hold on, this is my control center. You don't use my radio station.

Nola: [00:24:09] I can totally relate to that. Uh, what was something you thought would be easy until you tried it?

Gina_F: [00:24:18] I think maybe video. I thought, because I was a photographer for so many years, I was like, Oh, what's the difference? You know, this is still photos. This is moving photos. I thought that video was going to be a lot easier until I saw like my first attempts at video. I'm like, Oh my gosh, you suck. Yeah.

Lori: [00:24:36] I think that is probably what a lot of us experience the first time we try. Um, we, yeah, we have some stories just to even starting our own podcast. Uh, that sound a little familiar to your own story of moving to video so we can relate Gina. You've been a great guest and we thank you for being here and sharing your entrepreneurial journey and insights with us. If somebody wanted to learn more about you, your photography company, your product line on Amazon, where could they find that information?

Gina_F: [00:25:09] I do have some information on LinkedIn for the non-stick bakeware, other than that, to see the items you'd go on to Amazon and there's links that I can send to you for that. For my photography, my website is photographyFLA.com and I also have another website that's GinaFontana.com

Lori: [00:25:32] Well, you definitely had some beautiful images on your Gina Fontana, website that I saw. So, just as an FYI, I thought there was some, some great work there. You're welcome. Listeners, you can get the links, details, and information about Gina and her company and her product line on Amazon Bakehouse 23, as well as her amazing recipe for sugar cookies by visiting our website stickybrandlab.com resource page.

Nola: [00:26:04] You'll also want to be sure to catch our next episode. When we talked to an Amazon expert who founded an agency that helps sellers scale, their Amazon businesses.

 Be sure to come back next Tuesday and every Tuesday for another informative, inspiring and motivating episode. And remember, action creates results. So tap into your desire to create a business and brand you love by taking 1% action every day. Small steps, big effects.
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Lori: [00:26:30] Do you have questions about creating a personal brand, side hustle or small business? Sign up for one of our clarity sessions for more information, contact us at stickybrandlab.com/contact

Out-take:
Nola: [00:26:46] just to just get closer to your mic, get closer to your mic,
Lori: [00:26:50] get, I will get closer to the,
Nola: [00:26:54] Okay. Oh my goodness. Okay, come on, come on, come on.