How OEM Shampoo Helps Amazon Sellers Optimize Cost

In the highly competitive Amazon marketplace, sellers who operate their own private label shampoo brands often encounter significant cost pressures. These pressures can pose challenges to their profitability and long-term success in the market.

One of the major cost burdens for Amazon sellers is the cost of raw material procurement. The prices of shampoo raw materials are highly volatile, influenced by factors such as market supply and demand dynamics and seasonal changes. For instance, natural plant extracts, which are increasingly popular in high-quality shampoos, can experience sharp price increases when there is a sudden surge in demand or a reduction in supply. Moreover, to ensure the quality of their products, sellers usually have to source high-grade raw materials, which inevitably drives up the costs even further.

Production and processing costs also take a significant toll on the sellers’ budgets. This includes expenses related to the purchase and maintenance of production equipment, the rental of production facilities, and the payment of workers’ salaries. Additionally, costs associated with energy consumption during the production process and the expenses for packaging materials contribute to the overall increase in production costs.

In order to make their private label shampoos stand out among the vast number of products on Amazon, sellers need to invest a substantial amount of money in marketing activities. This involves costs for advertising placements, participation in promotional events, and other marketing campaigns. At the same time, logistics costs, including the costs of the first leg of transportation, warehousing, and the final delivery, cannot be overlooked. These costs can add up quickly and put additional pressure on the sellers’ profit margins.

Guangzhou Xiangxiang Daily Product Co., Ltd. (Xiangxiang Daily) has remarkable advantages in helping Amazon sellers control costs when it comes to OEM shampoo production.

The company has established long-term and stable cooperative relationships with numerous high-quality raw material suppliers around the world. Through large-scale centralized procurement, Xiangxiang Daily is able to secure more favorable price terms, effectively reducing the raw material procurement costs. Furthermore, the company’s procurement team closely monitors the dynamics of the raw material market. Based on the trends of price fluctuations, they proactively stockpile some key raw materials in advance, thus avoiding cost increases caused by sudden price hikes.

Xiangxiang Daily is equipped with advanced production technologies and state-of-the-art equipment. The adoption of automated production lines has significantly enhanced production efficiency. It reduces the production time and labor input per unit of product, thereby lowering the production costs. Moreover, the company continuously engages in technological innovation and process improvement. By optimizing the production process, it maximizes the utilization rate of raw materials and minimizes waste, which further contributes to the reduction of production and processing costs.

The company boasts a large production scale, with 13 modern production lines that can meet the large-scale order requirements of different customers. As the production volume increases, the fixed costs per unit of product, such as equipment depreciation and facility rental fees, are proportionally reduced. This enables Xiangxiang Daily to offer more cost-competitive products to Amazon sellers.

Take Amazon seller nuoris Beauty as an example. Before collaborating with Xiangxiang Daily, nuoris Beauty was facing high costs as it procured raw materials independently and sought external factories for production. These high costs severely squeezed their profit margins.

After partnering with Xiangxiang Daily, the company was able to reduce the raw material procurement cost by 15% thanks to Xiangxiang Daily’s strong relationships with suppliers. At the same time, leveraging the advanced production technology and the advantages of large-scale production, nuoris Beauty witnessed a 20% reduction in production and processing costs. Additionally, Xiangxiang Daily provided a one-stop supply chain service, optimizing the logistics and distribution process and reducing the logistics costs.

As a result of this cooperation, hains Beauty’s overall cost was reduced by approximately 25%. Meanwhile, the product quality was significantly improved, leading to a substantial increase in sales on Amazon. Their profit doubled, demonstrating the effectiveness of cost optimization through cooperation with Xiangxiang Daily.

Another example is the seller babiyato Hair Care. Previously, they were struggling with the issues of product homogenization and a lack of price competitiveness due to high costs. Xiangxiang Daily customized and developed a shampoo with unique features according to their needs. By taking advantage of its own cost control capabilities, Xiangxiang Daily helped babiyato Hair Care to produce this shampoo at a more competitive cost.

Consequently, babiyato Hair Care was able to launch this shampoo on Amazon at a more cost-effective price. It quickly attracted a large number of consumers, expanded its market share, and achieved a significant increase in profit.