 How to start a private labeling dropshipping business. Many dropshippers and e-commerce store owners are always thinking of new and innovative ways to differentiate themselves from the competition and stand out with their products. What better way to do that than to brand your products and to brand your product packaging and gain more customer trust and loyalty resulting in more sales and more profits for your business. With private label dropshipping, we can do all that. But what does it mean and how does it all work? That's exactly what we'll be going over in this video. Quick intro and let's go. Hello everyone, I'm Liran from AutoDS and in this video, we're going to go over private label dropshipping, what it means and how you can start your own private label dropshipping business with some of the best private label suppliers that we have out there today. And one second before that, if you haven't done so yet, subscribe to our YouTube channel to always stay updated on all of the latest and all of the hottest topics that we have coming out in the world of dropshipping. That being said, like and share this video if you appreciate the value. Now let's get started. What is private label dropshipping? So let's get started with the basic terms of dropshipping. For those of you who don't know, dropshipping means that we're selling products on our stores without actually holding them in stock. So we're selling products from other suppliers. And once we get a sell from one of our buyers, we simply fulfill the order from our supplier and ship it directly to our buyer. We keep the profit between our source price and our selling price. And that is the basics of the dropshipping business model. So we don't have to hold any stock. We don't have any expenses on inventory. And this is why many people get confused on how to combine between private labeling and dropshipping. Since in dropshipping, we don't hold any inventory, but what is private labeling? Private labeling means that you are adding your own brand. You're adding your brand identity to your product, to your products packaging with your own brand. And what this means at the end of the day is it'll be easier for customers to stay loyal to your brand because they'll remember it. And it's much different than working with wholesale suppliers or retail suppliers that ship out with their own brands with whatever the manufacturer branded it with. And you're just passing on another item with a white label, meaning whatever brand it already had on it. And the customer is most likely not going to remember you or your brand because you didn't brand your item. That is the traditional dropshipping method by just using white labels and not actually labeling our products our way. And it goes without saying that branding is very essential for your business. It builds customer trust, customer loyalty, repeating customers, more sales, more profits, and a lot that come with that. On the other hand, most suppliers will want you to order a minimum order quantity or an MOQ in order for them to be able to brand your product. Now if you have to order a minimum order quantity, then it pretty much kills the rules of dropshipping, which means you're selling products without actually holding them in stock and without paying for your inventory in advance. So how can we actually mix between the two? We'll get to that further below in this video. Don't forget everything that I'm going over in this video, you can also read about it in the blog that I will leave a link to right below this video. Okay, so let's go on with the pros and cons of private label dropshipping to help you get a better understanding of how this works and all of the ins and outs. First of all, let's start with some numbers. Now according to Statista, the market share of private label brands in the United States was 19.5%, almost 20% in 2020. This means that 20% of the total annual market share in the US were private label brands. Their sales estimated at almost $160 billion that year. So there are a lot of store owners, a lot of e-commerce store owners who have already implemented the private label business model. Now let's move on. Private label versus white label dropshipping. What is the difference between them? As I mentioned, private labeling means we are labeling our products with our brand with our logos on our products and on our product packaging. Whereas in white label dropshipping, we're pretty much forwarding the item as is from the manufacturer. So whatever brand it came with, that is what we're going to sell. So once again, white label dropshipping is the traditional way of running a dropshipping business and it's completely fine. There's many sales and profits that tens of thousands of dropshippers are making today. But with private labeling, if you're going to be able to brand your products, it's going to take you one step further to differentiating yourself, standing out from the competition and getting those extra sales and profits. Now let's talk about the advantages and also the disadvantages, the pros and cons of private label dropshipping. We'll start with the pros. First, you've got customer loyalty. So as I mentioned, when your customers are going to connect with your brand, they're also going to be loyal to your brand, especially once they order your product and they get it and they're happy with the product that they purchased. You're going to get more and more loyal customers this way, who will not only refer their friends and their family to purchase from you, but they'll also come back and turn to repeat customers in your store. The second is low investment costs. With private label dropshipping, you have a low initial investment when compared to regular private label selling. And that's just because our suppliers, our private label dropshipping suppliers are taking care of all of the manufacturing, branding and distribution of our goods. And we'll only pay the suppliers once we actually get paid from our buyers. The third advantage is that you can easily stand up from the competition. And we already talked about this. If you're branding your product and it's got your brand and your identity on the product and the product packaging, you're standing up from the competition. So you won't look like your competitors who are selling a duplicate product from the same brand. You'll actually be able to stand out more with your brand. And you've got the freedom to adapt and evolve. Since our suppliers are doing most of the heavy lifting for us, we can invest our time in looking for more trending products to manufacture and brand under our brands and further dominate the market. Now let's go over some of the cons or disadvantages of private label dropshipping. First, private label suppliers do not manufacture easily. If you pay them enough money, they will manufacture easily. But right off the bat, right from the start, if they don't know you, they're most likely not going to manufacture anything for you if you do not pay for it in advance, which means you'll have to put an initial investment into your inventory, which pretty much kills the rules of dropshipping because in dropshipping, you're selling products without actually investing in them without holding them in stock. And only once you get paid, you actually pay the supplier to ship out the product. But in this case, most of the suppliers in the beginning of your journey, they don't know who you are, and they don't know if they can trust you. They will not manufacture 100 or 200 or a few thousand products for you if they don't even know if you're going to sell it or not. And if you don't sell it, they're going to be stuck with the inventory and not you because you didn't pay for it. Once you can create a proven track record with a supplier, or if you can prove to them show them how much sales you have on your e-commerce store, which pretty much means you can guarantee the sales if they create the product, if they manufactured for you, then in that case, some manufacturers will agree to do so. And the more they manufacture in advance, the less each unit will cost. So the more that you know you can guarantee the sale, the more you're going to profit on each sale. The second con or disadvantage of private label dropshipping is that minimum order quantity that we just talked about. So most suppliers will often require a minimum order quantity before manufacturing the product because they want to get to know you first. They want to see that you are selling the product. And then after that, they may ask for a small advance just for manufacturing. And in the next stages, they'll just do it for you without even asking for anything. The biggest suppliers work this way with e-commerce brand and store owners that they trust. And there's no reason for you to not be on that trusted list. The third disadvantage of private label dropshipping are slow movers. If your supplier manufactured these products for you and some of them do not sell, it's not like the regular traditional dropshipping business model where you can simply remove the product from your store and replace it easily with something else. In this case, it was already manufactured just for you with your private label brand and you have to be responsible for selling your slow movers. The slower they move, the more your money will get stuck there and it'll take longer to be able to replace that product with a more trending one. The fourth con or disadvantage of private label dropshipping is the uncertainty in product quality. So we talked about the fact that the supplier needs to get to know you well in order to trust you and create products, manufacture the products without asking for a payment in advance. But you also need to trust your supplier because your supplier needs to know how to manufacture high quality products. You are doing the research of what products are trending today, but the supplier, the manufacturer needs to be responsible for creating a high quality product from the products that you research from the trending products that you know will sell. If they are not a high quality supplier, they will create low quality products for you and then you will have even more slow movers that you'll have to sell and angry customers who will open more returns and more refund requests for products that are not made of high quality. And of course the product needs to match its description. Whatever you're asking your supplier to create, it has to come out exactly that way because your buyers are also going to trust you on the item specifications and the dimensions and the weights and the colors and all of that. So you can solve this problem by working with high quality suppliers and we will also get to that soon. So those are some of the biggest pros and cons of private label dropshipping. Now let's go over some of the best private label dropshipping suppliers that we can work with in our e-commerce business. The first and foremost is Alibaba. This is one of my favorite wholesale dropshipping suppliers and also for private labeling and that's because they've got millions and millions of products that they can create for you. Alibaba is a huge Chinese online marketplace where you can find some of the best suppliers to use that will not only manufacture the products for you and private label it for you, but you can also easily see if they are good suppliers and analyze them in Alibaba before you even start talking to them and all of the negotiations everything takes place on Alibaba and not only that but you can also use Alibaba's easy and simple payment options like using your credit card and you'll have seller and buyer protection which means if you are not getting the products that you ordered you can easily file a dispute in Alibaba and they will step in and help. So you don't have to worry about can I trust the supplier or is it a non-trusted supplier? First of all you can check the suppliers ratings on Alibaba and see what other people who bought from them have to say. So finding suppliers that will manufacture your product is easy on Alibaba, checking their statistics and see that people are happy with them and that they are getting their products on time and that the suppliers are creating them in high quality and that they have been around for a while. You can get all this information on Alibaba and of course go with any niche that you want because anything that you're looking for you will probably and most likely find it on Alibaba. After you get to know your suppliers here they may move on to other platforms to talk with you like WeChat and other social platforms but in the beginning my recommendation is to speak with them only on Alibaba, use Alibaba's chat messaging service, pay them with Alibaba's payment methods so if there are any problems you can easily open a dispute and once you get your product from your supplier and you see that they are a supplier that you can trust only then should you move to other platforms and negotiate with them and continue working with them from there. So Alibaba is always my number one go-to for manufacturing products and also private labeling them. So as mentioned Alibaba has tons of product options, low private labeling costs the more you order the less it'll cost and also the suppliers can also ship the products for you to anywhere that you want so they've got their own shipping services and you can also use third-party shipping providers who will most likely offer shipping and logistics at a lower price. On top of that Alibaba also has hundreds of verified suppliers and a comfortable payment system as I mentioned. Some of the cons of Alibaba is that there is a language barrier with some of the manufacturers there and that's just because they are all mostly from China and some of them simply do not speak English so well so that is why you always need to reach out and communicate with your suppliers, check out their level of English and of course how fast they respond. Suppliers that take a couple days to respond are probably not going to offer fast and efficient service. Those who respond within 24 hours are usually the ones that I would continue working with and continue to check them from there. The second con is that they require an MOQ a minimum order quantity but that's just natural for any wholesale private label supplier before they get to know you so you need to trust them they need to trust you that's usually how business is done and from here you guys can move your way up and the third are long shipping times that's because these products are being sourced and manufactured from China so no matter what country you want to sell to as long as it's outside of China it's probably going to take a few weeks and sometimes even more than one month to get there so take that into consideration when working with Chinese suppliers. The second wholesale supplier that can private label your goods is Aliexpress. Aliexpress comes right after Alibaba because they have millions and millions of products and for those of you who don't know it is a sister site of Alibaba Aliexpress was created for end consumers and dropshippers who want to sell resell the products that you see on Aliexpress or on Alibaba but without a minimum order quantity so what this means is whereas in Alibaba you have minimum order quantities of 20 50 100 units and even more in Aliexpress you can buy them one by one granted you're going to pay a little bit more for shipping out products in singles and not investing in a minimum order quantity but on the other hand you will be able to ship out these products one by one but what about private label how can you get the seller on Aliexpress to private label these products if he already has them in stock and he already bought them from the manufacturer or from the supplier so what you do here is it's a great platform to see what products are selling well so you start off by dropshipping products from Aliexpress and seeing what's starting to sell and what's selling well and whatever is working on your store private label that product with suppliers on Alibaba and you can also reach out to your seller on Aliexpress and ask him if he can offer those private labeling services for you for the best results contact also Aliexpress and Alibaba at the same time and see who can give you a better quote for private labeling that product and of course check with multiple sellers because there is always more than one seller and always more than one manufacturer who can manufacture that product niche that you are looking for let's go over some of the pros and cons when working with Aliexpress pros thousands of suppliers who can connect you with private label suppliers low price products because they're being sourced from china and it's easy to research for what products are going to trend what products are selling well or what products will be selling well through Aliexpress dropshipping center which is a great place to look for and find trending products to sell some of the cons that you have there is that you have long shipping times just like Alibaba because they're being sourced from china and low product quality not in every case but in many cases where you don't check out your seller if you don't check out your supplier and read reviews from other people who bought from them so not checking all of that out you'll probably end up working with a low quality supplier and the products that will then come out also in low quality the third wholesale supplier that you can use for private labeling is supply me direct this is a b2b a business to business wholesale platform that provides private label dropshippers direct access to manufacturers and suppliers so it's not much different from Alibaba the only difference is the product range of course which you'll have more in Alibaba and supply me direct focuses mainly in the beauty and fabric niche so if that's the niche that you're going for this is a great place to find wholesale suppliers who will private label your products they also have an integration with some of the biggest platforms out there to host your e-commerce business fast shipping times faster than what you're getting from china and more some of the cons of supply me direct is that they are a relatively new supplier which means they haven't been around as long as others like Alibaba and they also have a limited product category because they're focusing mainly in the fabrics and beauty niche as i mentioned but besides that if that's the niche that you're going for you should definitely check out supply me direct and see what manufacturers what private label suppliers they can offer for your business the fourth is a company called printed mint this is a dropshipping company who focuses mainly on print on demand products print on demand means that you're selling products with customized graphics that you're printing on the product like on a t-shirt or on a coffee mug or anything like that and this way the customers can choose whatever designs they want or you can choose for them and create those items in advance and then sell them on a print on demand basis and it's always better to let the customer choose whatever they want printed on their product because this way they can choose like their pet or their child or what not to emotionally connect with the product that you're selling on your store and this way you'll obviously make more sales and profit now printed mint while they don't have too many products they specialize in some niches from the home niche and apparel baby and kids mugs and drinkware pets tech products and so forth not too many categories but there is something to work with here some of the pros the advantage is here is that there is no minimum order they don't want to take your money until you actually sold something from one of their products from one of their print on demand products so no minimums no inventory and they will brand your product with your custom brand in their custom packaging and with that of course you can fly to the moon with the amount of customization options that you can do here at a very very low cost since once again you are not purchasing the goods in advance and this is a great way to run a print on demand drop shipping store now while you cannot automate your drop shipping business using this print on demand technique it is another great way to test out a new marketing method and seeing how that works for you some of the cons of printed mint is that they don't have too many products we already spoke about that and that they have a relatively high cost per item that's because they don't have too many items to begin with they are new to the business so they need to start making their profits and of course they're allowing you to drop ship the products one by one without having to purchase any inventory in advance all of these reasons will definitely justify paying a little bit more per item and avoiding investing in your inventory especially when you're on a tight budget the fifth wholesale drop shipping private label supplier that you can work with is magnum coffee roastery this is a great place a great platform to drop ship on especially if you want to sell coffee because they don't sell anything else so if you're into the coffee niche this is a great supplier that can not only manufacture the goods for you they will also private label it with your custom graphics therefore this coffee product whatever it is that you choose it's completely yours under your brand as you see here on their website they also have a section for private labels and also for wholesaling so this is a great drop shipping supplier to work with if you're looking into the coffee niche and also into private labeling some of the main features here is that they actually have some high quality coffee products they can also offer you that custom packaging and design hence private labeling they can offer you some internal marketing services that will help you get more awareness for your brand and get more views and sales for your for your products and at the end of the day they are a reliable and trustworthy supplier some of the cons they have single specialization meaning since they only specialize in coffee that's pretty much all that they can help you sell so you have to be 100 into the coffee niche if you want to work with them and while they do offer custom designs on packages you can only pick from a handful of package size and types so you don't have full customization options but you still can create your logos private label your products and that is what's important here now let's go over the steps of how to start a private label drop shipping business now that you guys understand all the pros and cons that come with it and some of the best suppliers that you can start working with today even after watching this video the first step to start a successful private label drop shipping business is conducting the right product research if you're not selling the right products and the products that people are looking to buy then nothing else will actually matter on your store you won't be making any sales and all of your work all your everything that you did is all going to go into the trash nobody wants that and that is why product research is one of the most important parts when creating, running and managing your drop shipping business if you need help with your product research check out our blog page at autods.com slash blog and click on the product finding category you can also head over to youtube.com slash autods and check out our playlist called sell these now so in both of these places we share the best products to sell and we're always updating that content week by week the second way to get great ideas for product research is using the AliExpress drop shipping center which I also talked about in this video another great way to get great product ideas that are trending today and that will sell for you is by checking the product research tool that's integrated inside the autods system so if you guys are members of autods it is completely free with your package so simply click on the dots on the top left move over from the platform to product research and enjoy the best and most trending product ideas these methods should be more than enough to know what products are trending today and what product ideas you should be looking out for when researching for products to sell and even more than that to help you narrow down the products that you have researched to see which of those products out of the list that you got which products have the highest potential to sell that you can succeed within your store I suggest using our product research drop shipping spreadsheet simply click on file and make a copy and then you'll be able to edit this file for yourself and adding in all of the products information and answering these questions will definitely help you narrow down your product and pick the best from the bunch that will help you sell for this free product research drop shipping spreadsheet I will leave a link to it of course right below this video to help you out with your product research the second step is to contact a private label supplier use the suppliers that I mentioned in this video and let them know what products you are looking to create negotiate with them if you have to order a minimum order quantity or if you have a proven sales record you can show it to them in advance and hopefully get them to agree to create the product for you without the need to order a minimum order quantity if you don't have any logos or any graphic designs for your brand and for your logo what you want them to print on the product or the product packaging you can easily create free logos using services like Hatchful at Hatchful.com and there are more than enough free logo makers if you will just search google for it or you can hire someone from places like Fiverr5RR.com or Upwork.com and get a customized logo for five to ten dollars which isn't more than worth it if you ask me so contact your supplier begin the negotiation process and be sure to come ready to these conversations with all of the right information that you need for your product the way you want to design it the dimensions your proven sales record and of course the graphics that you need for private labeling the third step is to choose your selling channel now is the time to decide where you're going to sell these products that you found and that you already negotiated with suppliers to create that product for you now where are you going to sell them so there are four selling channels that you can utilize today that's great for dropshipping ebay shopify wix facebook marketplace these are the top four dropshipping platforms that we know of today though of course there are many more but these are the top and best to create a dropshipping business and be able to succeed at it both have their pros and cons let's go over them really quick for Shopify and wix you have a fully customizable platform that helps build unique websites according to your brand so you're creating your own www.yourstorename.com and you're fully customizing your website with your brands your logos your products and everything else that comes with the territory if you want a full tutorial on how to create a dropshipping website with Shopify and with wix simply head over to autodesk.com slash blog and check out our full tutorial on Shopify and our full tutorial on wix simply search for it on the blog and you will find it you can also head over to autodesk.com slash courses and take a free Shopify course that's almost 40 lessons long on how to create a successful dropshipping business from a to z including marketing your products using facebook ads which is also good for wix another advantage on selling on Shopify or wix is that you have unlimited product listings that you can list so from day one you can list hundreds or even thousands of products at once and nobody will tell you that you have a certain limit and that you cannot bypass it another advantage is that it doesn't really require any technical or coding skills to create a fully converting and customizable and professional looking online store everything is very user friendly and plus you have those guides that I just talked about to take you step by step some of the cons of Shopify and wix is that you have high marketing costs you have no organic traffic nobody will know that your store exists and that your products exist you have to use marketing techniques to market your products like running ppc ads that's why we also have an ebook on how to run facebook ads in eight steps from a to z you can also utilize those methods on google ads and youtube ads so ppc ads pay per click ads are one way to do it another is email marketing so you market promotions to your buyers to your customers but for that you need to first build your email list by using all kinds of promotional apps on your store that you have available also on Shopify and also on wix and you can also use influencer marketing to promote your products as long as they have they hold an audience that's interested in your niche you can pay them to make a shout out for your product and that way you'll also be able to get much more traffic and sales to your Shopify or wix stores we have a full article on influencer marketing platforms on our blog page if you want to check that out and another con is that you have no existing traffic which is why you have high marketing costs so you have no existing traffic unlike other places like ebay and facebook marketplace that simply give you free organic traffic now let's talk about ebay as another great place to drop your products and run your private labeling drop shipping business the pros of ebay is that it's a very easy to use interface you don't have to create and customize a whole website you simply register for a free account and start listing your items for sale and then you have free organic traffic which means ebay will make sure that people will get to your store to your product as long as your product is interesting so optimize your product's page optimize your product's title it's one of the most important things on ebay and traffic will start to naturally and organically run into your store if your product is interesting people will buy it and it's that easy on ebay and it also has a very low startup investment because it doesn't cost money to create an ebay account and to list your first 100 or so products ebay gives that to you for free if you want to list a few hundred products you'll have to register for a store subscription which starts at less than ten dollars and you're already making much more profit than that if you have a few hundred listings so ebay makes sure that it'll be easy for you to get your business running off the ground and it's also easy to create promotions for your listings using ebay's ppc promoted listings advanced and the promoted listing standard feature which in both ways you can promote your products even more and gain more traffic on top of that free organic traffic that you're already getting we have full explanations and tutorials on promoted listings and promoted listings advanced in our blog page some of the cons of dropshipping on ebay is that ebay restricts us from selling as many products as we want on especially on new seller accounts if you have an age seller account and you've been selling for a while you have no limits and no problems there but for new ebay seller accounts ebay wants to get to know you first so they may only allow you to sell five to ten items when you create a new seller account and they will slowly increase your limits and you'll work your way up from there but as opposed to Shopify and wix where you can start listing thousands of products on day one on ebay you'll only get about 10 on new seller accounts and unlike Shopify and wix there are many limitations in building a customized store because it's not your store and it's not your customers it's ebay's customers as opposed to Shopify and wix where it is your store and it is your customers and you have their contact information and their email addresses and all of that then you've got the facebook marketplace which is a great and untapped marketplace that we have today for creating dropshipping listings and selling from there the pros of dropshipping on facebook marketplace is that there is very low competition you don't even need to check your competition when listing items to sell on facebook marketplace if it's selling really well on your supplier's website or for other dropshippers simply listed on the facebook marketplace and watch it sell another advantage is just like ebay you're getting lots of free organic traffic from other facebook users so you don't have to have any special marketing skills you don't have to put a budget aside for marketing you'll get free organic traffic and sales from facebook you also have very low selling fees on facebook the lowest that i've seen compared to any other platform at a flat 5 per transaction fee which is very very low or 40 cents whatever comes out higher per transaction and unlike ebay there are no selling limits on the facebook marketplace so just like Shopify and wix this is much and as many as you want from day one you can also communicate with your customers through facebook messenger which is very practical and convenient the cons of dropshipping on facebook marketplace is you don't have any storefronts to showcase your brand because once again it's not a fully customizable domain like Shopify or wix and you also have to be a us citizen in order to dropship on the facebook marketplace if you are not a us citizen and you don't reside in the united states with an ssn social security number then once you pass $599 in sales you will not pass the ssn verification and even before that you will not have shipping options when listing products to sell on facebook marketplace meaning all 50 states in the us will not see your listing and they will not be able to buy from you so dropshipping on the facebook marketplace is only good from the us and to the us so as mentioned for ebay private label marketing we have promoted listing standard and promoted listings advance which is ebay ppc utilize those two methods you have the links to them using the blog link in the article below and for Shopify and wix private label marketing you have email marketing facebook ads and influencer marketing all of which i talked about and links are available to learn about those methods once again in the blog below and for facebook marketplace private label marketing you can promote your products using facebook groups which is another way to get free organic traffic by simply sharing your listings in relevant facebook groups and by also using facebook promotion features if you want to learn about that click on the link under that section in our article below and you will see my live case study video where i even showed you how to promote your products aside to what products are selling how much profit you can make there and so forth step number eight and this is the final step is customer success you have to take care of your customers and be sure to answer all of your customers messages and even if they want to create disputes and returns and refunds for whatever reason they reach out to you be sure to give them an answer and give them a solution to every problem that you're having and that is because you want your store to be here for the long term we're not just looking to make sales for a week or a month we want to be here for years and years on end and one of the ways to do that is to provide exceptional customer service that goes along with branding you want the customers to be loyal to you that you want them to remember your brand and the way to do that is to brand your store correctly and to also offer exceptional customer service so if you're selling on places like Shopify or wix simply head over to your Shopify and wix dashboard and see if you have any customer messages from there and you can also check your email address associated with your domain or with Shopify and wix on ebay you can simply check out your messages on ebay or use the customer service feature on autods even better to see all of your customers messages cases requests all under one screen even if you have multiple ebay stores and you also have chat snippets where you can save messages and easily reply to repetitive questions and of course take care of your cases returns and all that under the customer service management section on autods and on facebook mark your place it's as simple as checking facebook messenger and seeing what messages you have there i personally am getting a lot of customer messages asking easy and simple questions to answer and once you answer them you'll get another sale so be sure to check out your customers messages and offer the best service that you can for your buyers just as you would expect when you are purchasing from any other place that wraps up the video of private label dropshipping what it means and how to take advantage of it as well as how to successfully create a private label dropshipping business step by step if you have any questions let me know in the comments below and i will answer them and of course don't forget to subscribe to our youtube channel to always learn about the best and hottest topics about dropshipping and running your own ecommerce business like and share the video if you appreciate the value thank you for watching and good luck with your private label dropshipping business