Amazon is an incredible platform for aspiring boutique owners. In 2018, there were either 1 million or near 1 million different fashion products listed in-stock, for sale on Amazon at any given time.
Not only does Amazon give fashion entrepreneurs the tools and reach to sell clothing, shoes, and accessories to customers from all over the globe, the platform offers several tools to streamline invoicing and other e-commerce logistics, plus FBA Centers or Fulfillment By Amazon Centers that handle shipping your products to customers for you.
Did you know: If you enroll in the FBA program, you can automate order fulfillment by taking advantage of Amazon’s advanced shipping and fulfillment services and earn more sales from Amazon’s coveted Prime customers. About half of all sales on Amazon come from third-party sellers. And out of the top 10,000 sellers, 66% of them use FBA.
FBA sellers on Amazon can follow two main paths to source inventory for Amazon and earn and grow sales. Either:
- Sell products from other brands, or
- Sell your own private label goods
So what’s the “best strategy”? In other words, what will give you the biggest profit margin and strengthen your unique fashion brand? Here’s our take:
Pros & Cons of Selling Other Brand’s Products on Amazon
By selling the clothes from other brands in your Amazon store, you have the advantage of riding the wave of your inventory’s reputation, especially if you’re retailing a brand well-known for quality.
The drawback – earning sales this way makes you only a simple retailer and your competition will be fierce. Other sellers may offer shoppers your same inventory, but at a fraction of your prices. In this game, there’s no difference in your inventory so it all comes down to how low you price things, resulting in low profit margins. Additionally, selling generic products on Amazon will likely prevent customers from developing loyalty to your shop. After all, you’re not truly building a brand. You’re distributing someone else’s.
Pros & Cons of Selling Your Private Label Fashion Brand on Amazon
The main drawback of selling private label fashion products on Amazon is that you have put in the work to develop your brand’s identity and may have a longer sourcing funnel. You can either sell white label products – products created using a pattern you did not fully design, but that you added your brand label to – or private label products that are fully custom, from the pattern to the label. Depending on how you do this, the process can take 10 or more weeks.
However, the great part about selling your private label on Amazon is that by creating your own brand and product lines, you’ll have the potential to earn a bigger profit margin. You’re selling a brand and products that are unique, so race to the bottom pricing doesn’t need to factor into your sales model. You’re selling a brand that customers can become loyal to, appreciate, and remember. With great quality products and caring customer service, you can leverage this to earn repeat customers and grow your brand’s reputation with powerful five star customer reviews.
Amazon is a great springboard for fashion designers and entrepreneurs who have a private label fashion brand. While you may want to vary your approaches to sales as your fashion brand grows, Amazon gives fashion entrepreneurs who are just starting out immediate, international customer reach. Plus, Amazon's cross-selling algorithms further broaden your brand's reach by putting your products in front of customers looking for other types of goods in the Amazon marketplace. This is one added advantage of including a sales platform like Amazon early on in your growth plan.
Amazon does, of course have some rules about what they will and won’t keep in their fulfillment centers. It’s important to comply with these standards to ensure that the retail giant will agree to store and ship your inventory to customers. Learn more about selling your fashion products on Amazon in this blog.