Wholesale vs. Private Label
Compare the "Quick Flip" vs. "Brand Building". Which model yields better ROI?
How This Tool Works
This calculator compares the two primary Amazon FBA business models: Wholesale (Reselling) and Private Label (Brand Building). It helps you visualize where your capital is most efficient.
- Wholesale: Buying existing brands in bulk. Lower margins but faster turn-around and lower advertising costs.
- Private Label: Creating your own brand. Higher upfront costs and launch risk, but much higher long-term asset value.
- ROI & Investment: We calculate the total capital required for your first order and the projected return on that investment.
How to Use (Steps)
- Wholesale Inputs: Enter the cost price from a distributor and the current Buy Box price.
- Private Label Inputs: Include landed manufacturing costs and a launch/PPC budget (crucial for PL).
- MOQ/Quantity: Adjust quantities to reflect typical minimum orders (usually higher for PL).
- Compare: See which model offers the best ROI for your current budget.
Example Calculation
Scenario: $5,000 Startup Budget.
• Wholesale: 250 units of a $20 brand. Profit: $1,250. ROI: 25%. (Lower risk, low effort).
• Private Label: 500 units + $2k Ads. Profit: $4,500. ROI: 90%. (Higher risk, higher reward).
• Verdict: PL builds a brand, but Wholesale provides faster cash flow.
Why This Tool Is Accurate
This tool accounts for the "hidden" costs of Private Label—specifically launch advertising and higher MOQs—which are often ignored in basic margin calculators. It provides a realistic comparison of capital requirements.
Limitations & Disclaimer
Success in both models depends heavily on product research and supplier relationships. Disclaimer: This tool assumes successful sales; it does not account for storage fees or potential price wars.
Frequently Asked Questions
Wholesale is often better for beginners because you are selling established brands with existing demand. Private Label requires higher capital and expertise in product research and marketing.
The biggest risk is product failure. If you invest $5,000 in a brand that doesn't sell, you are stuck with inventory. Wholesale risk is lower as you can often return or quickly liquidate known brands.
Yes. Many successful sellers use Wholesale to provide steady, low-maintenance cash flow while investing the profits into high-upside Private Label brands.