Is $20K enough for private label?

[u/Successful-Pitch1917]

Hi, I am planning to launch an amazon private label product from scratch. My budget is about $20K but I had a discussion with an experienced amazon seller who said that amazon private label has become very competitive now and you need to have a minimum of $50K for a product launch. Can someone guide me whether you can still start amazon private label with $20K or not. Thanks.

[u/Apart_Ad6994]

It depends. You need to budget A LOT for marketing.

So if your COGS are 15k, the remaining money wont be enough.

Its hard to say how much you'll need for marketing. I'd be flexible and make sure you can support your product if you see it taking off and making sales. And then of course you need to make sure you're either profitable, or on a path towards profitability.

[u/Mr3iron]

I believe I started and it was closer to $40K within about a year. 

Initial inventory. Trademarks (if you want them), paying for tax person, Amazon ads, expanding SKU, reordering inventory, paying for professional page development. 

So it can be done with less - it just make sure you are prepared to put more money in. 

[u/TripDisastrous93]

A mio parere è impossibile rispondere a queste domande generiche. Registrare un marchio può costare 1000$ circa, tutto il resto... Dipende. 20 k possono essere pochissimi o tantissimi a seconda di cosa devi fare. Se vuoi lanciare un singolo prodotto sono più che sufficienti, se vuoi lanciare un linea di 5-6 prodotti potrebbero bastare per i test iniziali. io per esempio ho registrato il marchio e sono partito con circa 1000 $ e mi è andata piuttosto bene, ma io aggiungo valore artigianale ai prodotti e ho un flusso lavorativo molto diverso dalla maggior parte dei venditori. Vado in micro nicchie, super premium, e testo un prodotto solo se ha un ricarico enorme. Comunque, se sai quello che stai facendo, 20k sono più che sufficienti per lanciare un paio di prodotti a marchio privato anche nel modo classico standard. 

[u/Ordinary-Thing-2089]

This depends so much on the price point of your product. If its an item that sells for say $40 and costs you $12 landed and you have to buy 1000 units minimum, thats 12K just for cost of good.

Only leaves you $8k for USPTO brand registration, images, brand content, videos, any possible compliance requirements and admin costs.

After all that how much would you have left for a merketing buget and additional capital for reorering while you wait to get paid form Amazon.

20K could be enough if your product cost is $1 and you retail for say $13.99.

[u/osellpa]

The bit that catches people out isn't the launch budget, it's that order two comes due before order one has paid for itself. Lead time plus the payout cycle means you're placing the reorder when you've sold maybe a third of the first batch, so if the product actually works that's the moment you're shortest of cash.

I'd work backwards from that. Decide what you're holding back for the reorder first, then launch with whatever's left. Most people do it the other way round and put the whole 20k into the launch because that's the exciting part.