The following are suggestions based on my personal experience:
For your first Amazon private label product, my suggestion is that you start with between 150-250 units of your product. The risks are higher than the potential reward when you start with more than 500 units of your first product.
Let’s say you launch with 1000 units of your product. Here are some of the possible outcomes:
- your product is a success and you are selling 20+ units a day
- your product flops and you are selling maybe 1 unit per day at best
- your product sells well, but the PPC is $3+ per click, your acos is terrible, and hijackers are all over your listing
- random problems – you accidentally violate a trademark, your product gets flagged by Amazon, your account gets suspended, you find out your product is patented, you get high return rates on a product, etc…, etc…, etc…
So, if your product is less than a total success, however you define success, you’ll face issues with slow sales, tied up capital, low morale, etc… Now if your product is a success, you just need to order a lot more of that product and your sales satisfaction is just delayed a bit. You can then spend big money on a tested and successful product!
The chance that your first product pick is going to be a total success is pretty small compared to the things that can go wrong. If you start with a lower quantity of units, your risk is greatly reduced. If you have picked a slow seller, you will probably be able to at least recoup your costs, at least. Even if not, doesn’t losing $750 sound better than losing $2000?
A quantity of 150-250 units is enough to give your product a good test run. There is really no downside to starting with less than 250 units of your product.
Now if you are 100% convinced that your product pick is going to be a phenomenal success, then I’d say go for it, buy as many units as you can afford – as long as you can take the financial hit if you have overestimated how good of product you have picked!
Many suppliers have listed minimum order quantities (MOQ) of 500 or 1000+ units. Everything is negotiable. You can probably get your supplier to agree to a lower MOQ for your first order – if they are inflexible, I’d find some other supplier if you can.
All in all, just seriously assess the risk versus reward when you are settling on an initial order quantity. Some people will accept more risk financially, but it is up to you to determine how much you can lose but still recover if your product idea is a flop.
As always, I hope that the information that I post to my blog is useful to you. If so, please check out my other blogs posts on the subject of Amazon selling. Don’t miss out! Please consider subscribing to new blog post notification emails. You will recieve an email notification when a new post is added.
© 2017 Philip A Covington