I’ve been twiddling my thumbs and doing a lot of “fake” work lately. Not at my full-time job, of course. But I made the mistake of waiting until just before Chinese New Year (CNY) to pull the trigger on my first order of private label products.
Apparently CNY is not a party-one-night-and-wake-up-with-a-hangover type of holiday. Instead, the entire country of China basically shuts down and goes on vacation for the better part of a month. I paid the deposit on my order in late January, just before the factory closed. They returned to work on February 15th, and didn’t resume production operations until the 22nd.
So a word of advice: If you are wanting any inventory in January or February, get the order in before the end of the year. The normal lead-time on my products would be 3 to 4 weeks, but for this one, it’s more like 6 weeks. And that’s why I’m twiddling my thumbs.
So for a lack of anything better to write, I figured I’d cover a topic that will hopefully help someone avoid some huge pitfalls when starting an FBA private label business: products to avoid.
There seems to be a consensus that the best products to look for are small, light and have few moving parts. So obviously you want to avoid televisions and bicycles. But this post isn’t about the obvious items to avoid. There are several things that you may think are good ideas, but have their own sets of issues that can cause you headaches and cost you money.
Most clothing is light. It can be folded and shipped in small packages. And those are good things. But what’s NOT good is managing the inventory.
T-shirts, jeans, underwear, etc. don’t come in one-size-fits-all. They are also gender-specific. So if you’re selling t-shirts, you’re going to have to stock at least 4 different sizes. And if you’re going to sell multiple colors, then you have 4 more sizes to stock in each color. Want to offer both men’s and women’s options? Double all of that. Oh, and you’ll also be using a separate barcode / SKU for each different size of each different size in each different color.
And I won’t even go into all the different brands that dominate clothing, keeping up with trends, etc. Mostly because I don’t even care about that stuff. But most consumers do care, and that’s a lot to keep up with.
This is a huge industry. HUGE. Even Tim Ferriss got his start by using a private label supplement and selling it online. So it is really tempting to do the same thing and get a small piece of that multi-billion dollar pie.
But do you know what scares me? Other people’s health. Killing somebody. Getting sued. Nutritional supplements ARE NOT REGULATED by the US Food and Drug Administration. This is the same governing body that makes pharmaceutical companies spend millions of dollars and go through years of testing and red tape to put their drugs on the market. But if it’s just a “nutritional supplement,” the manufacturer is responsible for ensuring its safety. Don’t believe me? Straight from the horse’s mouth: USFDA.
Do you want that level of liability? What about when someone ends up in the hospital after taking your private label diet pill and sues you? I’m not saying it will ever happen. And you may only stick to a few safe, well-known supplements. But that’s just a level of liability that I would never mess with.
Phone and Tablet Cases
I’m sure everyone has had this idea at some point. And there is no shortage of manufacturers on Alibaba that make cases for iPhones and iPads. And it sounds great: a cheap silicone or plastic shell that you can buy for less than $1 each. It’s small and will be cheap to ship. What could be bad?
Just do a quick search on Amazon for “iPhone case.” There are pages and pages of results. There are well-known brands and no-name brands. There are dozens and dozens of styles and colors and designs. You know what that sounds like to me? Information overload and severe decision anxiety. How does anyone choose which case to buy?!
In other words: good luck getting your case found in that vast sea of phone cases.
This niche seems tempting, too. There are plenty of manufacturers who offer private label toys. And you could stick to simple things like building blocks or dolls. So what’s the problem?
Brand dominance. There are a small handful of brands that have been making children’s toys for decades. Are all of their toys good? Of course not. But those companies have endless advertising budgets and huge distribution networks. Kids want the toys that they see on TV commercials or on the shelf at Toys R Us. This new generation of parents is certainly down for buying toys online. But I don’t think it’s worth trying to compete with the established name brands.
These are just a few categories that I’ve thought about over the years that I’ve decided to avoid. I won’t say that you can’t make any money in any of them, but I just don’t think it’s the most efficient use of time or resources. And when you have a job, a wife, two puppies and a baby on the way like me, then it’s all about getting the most out of the little free time you have.
I’m interested to hear any other not-so-obvious niches or products that you would avoid. Let me know in the comments!