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Now here’s the second of the 5 Basic eCommerce Business Models that we will be talking about in this post:

No. 2 Business Model: Private Label

Sellers who do private label, or private labeling, are the people who take the generic, new products and sell them online on marketplace platforms like Amazon, but add their own brand name on the listings. This is currently one of the hottest product strategies for online sellers.

Private labeling occupies an interesting place between reselling and full-blown product development. Like resellers, they buy new, finished products and sell them on Amazon without modification. However, they take things one step further by adding a brand name, and some private labeling business may customize the product and packaging to such an extent it bears little resemblance to the original generic item.

The main difference between resellers and private labeling is that the previous emphasize on building product niches, while the latter most often focuses on building individual products. Private label business normally succeeds by doing these:

  1. Adding their own brand name and logo, to increase the perceived value.

  2. Creating their own instructions and packaging to provide better product information.

  3. Creating their own marketing material including photos, videos, and text that sell the product more effectively.

  4. Making design modifications to address buyers’ needs better, or differentiate themselves from competitors.

  5. Bundling products with accessories bearing the same branding.

Want to know more? Stay tuned for the next Fundamental Ecommerce Business Model!

Check out the series on the 5 Basic eCommerce Business Models Here:

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