Amazon FBA (Fulfillment by Amazon) and Private Label are two popular business models for selling products on Amazon. While they are often used together, they serve different purposes. In this blog, we’ll break down the differences between the two to help you understand how they work individually and how they can be combined to maximize your success.
Definition of Amazon FBA

Amazon FBA is a fulfillment service where it handles the logistics of storing, packing, shipping, and customer service for products sold by third party sellers. It allows sellers to leverage it’s vast fulfillment network, ensuring faster delivery and reliable service.
Key features of Amazon FBA:
- Storage: It stores your products in their fulfillment centers.
- Shipping: They takes care of shipping products to customers.
- Customer Service: It handles customer queries, returns, and refunds.
Definition of Private Label

Private Label refers to selling products under your own brand name. You typically source generic products from manufacturers and rebrand them as your own. Sellers focus on customizing packaging, branding, and sometimes product features to create a unique product that is exclusive to their brand.
Key features of Private Label:
- Branding: You sell products under your own custom brand name.
- Control: You control the product’s design, quality, and pricing.
- Exclusivity: Your brand makes the product unique to your store, differentiating you from competitors selling similar products.
Ownership and Control

The primary difference between Amazon FBA and Private Label lies in ownership and control.
- With Amazon FBA, you can sell any product, even those from established brands, and use it’s logistics network. FBA does not change ownership of the product – it simply manages fulfillment.
- With Private Label, you are the owner of the brand and product. You control the branding, marketing, and product development. FBA can be used as a fulfillment option for your Private Label products, but the branding remains uniquely yours.
Investment and Setup

Setting up an Amazon FBA business often requires less initial investment compared to Private Label. You can start by selling existing products from other brands, using it's fulfillment services, without having to invest in creating a new product line.
On the other hand, setting up a Private Label business generally involves more upfront costs. You need to invest in product development, custom packaging, branding, and sometimes minimum order quantities with manufacturers. However, the potential for higher profit margins is greater because of the uniqueness of the product and brand.
Profit Margins

Profit margins with FBA depend on the types of products you sell. If you resell branded products or wholesale items, your margins may be lower due to competition and established pricing.
With Private Label, you typically enjoy higher profit margins because you control the pricing and have less direct competition with other sellers offering the same product.