Research Proposal: Private Label Cosmetics on the Amazon Platform

This research proposal investigates the adoption and significance of private label cosmetic products within Amazon's e-commerce environment. It explores the importance of private labeling, critically evaluates the concept, and outlines strategies for sellers to enter the market. The study examines the advantages and disadvantages of private labeling, including market control, branding challenges, and competition. The proposal includes a literature review covering the background of private labeling, its impact on e-commerce, and the steps necessary for sellers to launch private label cosmetic products on Amazon, such as product selection, competition research, manufacturer selection, branding, listing creation, product protection, and leveraging Fulfillment by Amazon (FBA). The research methodology section outlines the methods and techniques, data collection, analysis, and ethical considerations. Expected outcomes and references are also included to provide a comprehensive understanding of the topic.

Running head: Research proposal
Private labeling of cosmetic products of Amazon
Name of Student
Name of the University
Author note

1RESEARCH PROPOSAL
ABSTRACT
A cost efficient method to expand the beauty market is by the private labeling of the
cosmetics. Here, the products are manufactured already; however, they are made branded under a
particular marketer or retailer. While there is not much barrier for entering into the cosmetics
marketing; yet it is necessary for the marketers to stay in the line within the industry standards.
However, discussing about the private labeling of the cosmetic product on Amazon, one of the
vital attractions of this approach is flexibility. It allows the sellers or the marketers to make
experiment regarding the changing customer demand and branding in the most affordable way.
Although the products under private label are usually sold at comparatively lower price than the
other existing brands, some of the private label brands are recently being positioned as the
premium products, having higher price tag. This research paper is going to discuss the
importance of private label cosmetic products on Amazon and the process by which the sellers
going to adopt this process; thereby adding more profit to the business environment.

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Table of Contents
Introduction......................................................................................................................................4
Background of the research.............................................................................................................4
Research aim and objectives............................................................................................................5
Research questions...........................................................................................................................6
Literature review..............................................................................................................................7
Private labeling of product and its importance............................................................................7
Critical analysis of private labeling approach.............................................................................8
Steps for selling private label cosmetic products on Amazon...................................................10
Choosing the product.............................................................................................................10
Research about the competition.............................................................................................10
Find the right private able manufacturer...............................................................................11
Develop the branding.............................................................................................................11
Create the listing....................................................................................................................11
Protect the product.................................................................................................................12
Taking advantages of fulfillment by Amazon (FBA)............................................................12
Start selling............................................................................................................................12
Research methodology...................................................................................................................14
Research Methods and techniques.............................................................................................14
Data collection method..............................................................................................................14

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Data Analysis and Interpretation...............................................................................................15
Research Instruments.................................................................................................................15
Sampling....................................................................................................................................15
Ethical Issues.............................................................................................................................16
Expected outcomes........................................................................................................................16
References......................................................................................................................................17

4RESEARCH PROPOSAL
Introduction
In order to achieve sustainability in today’s competitive market, every business; whether
it is online or offline, need to put major emphasis on customer satisfaction. Therefore, the current
age businesses are heading towards providing numerous products in an affordable price to the
customers; thereby expanding its market place (Fuchs et al. 2013). One such example is
Amazon; founded by Jeff Bezos, Amazon is an American based largest E-commerce company.
In addition, in terms of revenue, it is world’s largest internet company (Gala and Patil 2013).
However, as Amazon continuously expanding its marketplace, it offers the sellers to expand their
business by several means. Additionally, selling the private-label products is one emerging
business strategy that is becoming beneficial for Amazon. Despite of being a profitable and fairly
straightforward concept, running the business by getting the private-label products on Amazon is
not easy; rather it takes graceful dedication, research and great deal of time. There exist a number
of different categories of product; however, this research paper is going to focus on selling of the
private label cosmetic products on Amazon. Expanding the beauty market by introducing the
private label cosmetics can be proved as the low cost and profitable way.
Background of the research
Amazon.com or simply Amazon is the transactional electronic commerce business and
registered as the world’s largest online retailer by dealing with a vast area of product and a wide
range of customers and sellers. According to Lusk (2013), proceeding towards the private label
marketing has successfully turned out to be an efficient and profitable strategy for the small

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business. In addition to that, Choi, Lee and Friske (2018), found that, in the businesses that are
categorized as middling-size; especially those which have established their brand names in the
grocery categories (for example, the condiments, preserves, sauces, etc.) mainly focuses towards
the private label products. Furthermore, as opined by Gendel-Guterman and Levy (2017), in
case of private label distribution, it is vital for the business to have a certain size for satisfying
the mass market. Additionally, distribution of the privately labeled products to different stores,
having their own unique packaging as well as labeling, which further combined with the need for
the low pricing, is able to make the particular process less than cost effective (Senthilvelkumar
and Jawahar 2013). However, rapid adoption of private label products in case of the e-commerce
is one emerging trend; yet in its infancy. While the department stores and supermarkets have
added this concept into their business years before, the e-retailers are lagging behind; yet heading
towards the rapid adoption of this emerging trend.
Research aim and objectives
The aim of this research paper is to understand the adoption and importance of private
label products; especially the cosmetic products inside the e-business environment of Amazon.
Meanwhile, the objectives to which the research is going to put focus are as follows;
 To examine the importance of private labeling of the cosmetic products
 To critically evaluate the concept of private labeling
 To describe the ways by which sellers can start selling their private label products on
Amazon

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Research questions
The necessary research questions emphasizing on which the entire research will be
carried out are as follows;
1. What is private labeling of the cosmetic products and how it is important to the e-
commerce?
2. What are the pros and cons of adoption of private labeling in e-commerce business?
3. How the sellers can expand their business towards private labeling on Amazon?

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Literature review
Private labeling of product and its importance
The private label products are the products that are manufactured by any third-party
manufacturer or a contract and sold under the brand name of a particular retailer. In this case the
retailer are the e-commerce retailers, whose responsibility is to analyze every single thing about
the product such as, the packaging of that product, what exactly is inside the packet, how the
label are looking like, including the payment and delivery of the product (Bozhinova 2014). This
process is completely different from the process of buying products from particular companies
that have their brand name present in it. Considering some example, the hair salons often design
customized shampoos, conditioners, and other hair styling cosmetics for their customers having
their own brand name written on it. However, according to the researches, the private label
products, as compare to other national brands about 30 percent lower the in price
(Senthilvelkumar and Jawahar 2013). The department stores and different reputed supermarkets
have adopted this process many years back; however, it’s time for the e-commerce businesses.
Several e-commerce businesses such as Amazon are heading towards the adoption of this tactic
for gathering more customer and value to the business. Almost every kind of products including
the beverage, cosmetics, personal care, household cleaners, electronics, daily items and many
others have private labels.
Discussing about its significance for the e-commerce business and the e-retailers, the
private labels on any products offer the retailers to have control over the different factors of the
such as package design, size, pricing, production as well as the distribution of that particular
product (Siji 2015). Therefore, there exist chances for the retailers to be innovative and

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implement new ideas for gaining higher market share then the national brands. In addition to
that, the ability of making quick adjustments to the products depending upon the changing
preferences of the customers can also performed. There exist numerous brands of cosmetic
products in the market; however, today’s customers are mainly focusing on the usage of
customized product that will best suit for them. Therefore, the customization of the products
including the customized store brand labels can improve the shopping experience of the
customers; thereby gathering higher customer loyalty for the business (Cuneo et al. 2015).
Critical analysis of private labeling approach
The products designed under the private label usually carry the name of the seller; yet
they are manufactured by any third party. Usually, after the establishment of a well-recognized
online business such as Amazon and growing the same in a fine pace, adoption of the private
labeling will help the seller to move one step ahead. In addition to that, the sellers can create
their own brand name and unique identity (Shukla, Banerjee and Adidam 2013). Despite of being
a new concept for the e-commerce business, this particular process is successfully adding
numerous advantages to the business environment and improving the market reputation of the
company. One major advantage is that it provides control over the product and processing of the
product. The third-party manufacturers perform as per the direction of the retailers, by providing
complete control over the product quality and ingredients (DIVE and AMBADE 2016).
Additionally, by getting the control over all products, the retailers can also examine the actual
cost of the product along with the profitable pricing. This will in return give higher competitive
advantages to the particular business and gather higher amount of profit (Thanasuta 2015).
Furthermore, this facility also provides advantageous to the retailers in case of modifying the
product as per the demands of the buyers. As there exist number of cosmetic brands in the

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market and Amazon, being one reputed e-commerce platform, adoption of the product labeling
will definitely create competition in the market. Creation of competition between the
manufacturers can turn out to be the best opportunities for the sellers as they get the best quality
products.
Despite of having series of advantages, similar to all other marketing methods, this also
has some disadvantages that sometimes hinder its adoption. Though it provides control over the
product; yet the sellers have to depend upon the manufacturer majorly for ensuring the quality
and production. In order to get competitive advantages, the private labeled products generally
sold at comparatively lower price that generates a lower profit margin in the initial stage (Calvo-
Porral and Lévy-Mangin 2014). Most of the private labeled products; especially the cosmetic
products usually are replicas of any branded products; therefore it become difficult for it to
create a unique identity. In addition to that, designing owns logo as well as the packaging can be
expensive riskier and difficult in some cases. It may take higher amount of time to create an
impactful brand name as well as brand awareness that will compete with the other existing
brands (Sarkar, Sharma and Kalro 2016). Additionally, it is no more secret that the private label
sellers start selling their products with a comparatively lower sales rank initially on Amazon.
Comparing to other existing national popular brands, the private labeled products might also
gather less customer trust.
The above discussed disadvantages might hinder the adoption process of the private label
products; however, Amazon has its own brand name. Moreover, during past few decades, it is
effectively serving billions of customers all over the world by providing them number of product
according to their demand. This has created an impactful brand value by gathering higher
amount of customer loyalty. Therefore, adding private labeling cosmetic products will not create

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as higher hindrance as discussed above. The advantages of this process definitely overlaps its
disadvantages, by making it an efficient marketing and profit making approach for the American
based e-commerce company Amazon.
Steps for selling private label cosmetic products on Amazon
With the expansion of the its Marketplace, and brand value Amazon is gathering higher
customer loyalty and offering more number of opportunities to the sellers for building their own
business. However, implementing the following steps can help the seller to sell their private label
cosmetic products in Amazon.
Choosing the product
There exist a number of cosmetic products that can be private labeled; such as, Cruelty-
free makeup, Elf makeup, a cruelty-free makeup brand, Organic sunscreen, Natural deodorant,
Charcoal toothpaste, Coffee scrub, Tea tree oil, Anti-aging face cream and many others.
Therefore, choosing and researching about the product that the seller want to sell can sometimes
become time-consuming and tedious (Abril and Martos-Partal 2013). However, it is the foremost
important step that needs to be concern about before selling private-label products on Amazon.
The key to the private-label selling is choosing lightweight, generic, and highest rank products
on Amazon.
Research about the competition
For every product, brand or business, to gather sustainability, it is important to stand out
of the competition. Going deeper and researching more about the existing top brands will act as
one effective strategy. Assessing each listing’s reviews, content, pricing as well as best-sellers

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rank will give an overall idea regarding the competition. In addition to that, it is necessary for the
sellers to have a perfect balance between the competition and the demand.
Find the right private able manufacturer
Choosing the appropriate manufacturer is as important as choosing right product. The
important partner that the seller will have while going for the private labeling is the private label
manufacturers. It might riskier to trust the new manufacturers; however, selection of the well-
established manufacturer and supplier is important for every seller (Dawes and Nenycz-Thiel
2013). While comparing the suppliers, the seller should keep several factors such as, cost of the
goods, minimum order size, lead time of the order, policies of the private label and many others
in mind.
Develop the branding
Creating a brand name, logo, slogan that suits the product will give a unique identity to
the product. As the customers are getting smatter day by day and going for buying the branded
product and Amazon being one largest e-commerce business hub, it will become easy for the
seller to sale their products on it.
Create the listing
In contrast to the brick and mortar stores, Amazon doesn’t provide the luxury interacting
with the product to the shoppers. Hence, the only thing that matters is the words, videos or
images within the listing. It will provide the shoppers a comprehensive view of all the products
(Miquel-Romero, Caplliure-Giner and Adame-Sánchez 2014). The seller can build the listing by
creating one seller account in Amazon; however, in any complicated situations, the Amazon
experts can also help the sellers.