Seventeen of the 18 Amazon businesses we have researched are private label, and their estimated margins run from 21.1% to 58.7%, with a median of 39.0%. We have not measured a single wholesale or dropshipping business. That imbalance is itself the first finding. The sellers visible enough to research, with a brand, a following and a profile, are almost all private label. This page compares the three models on what we can measure and on how each one makes money. Where we have no numbers, it says so.
The three models in one paragraph each
Private label. You design or choose a product, have a factory make it with your brand on it, and sell it on a listing you create and control. You pay for the first order up front, and sometimes for tooling. In return, you are the only seller of that product.
Wholesale. You buy another company's branded product in bulk, from the brand or a distributor, and sell it on the listing that already exists. You build no product and no listing, but you share that listing with every other seller of the same item, and you compete with them for the Buy Box.
Dropshipping. You list a product and, when it sells, a supplier ships it straight to the customer. You hold no inventory. Amazon allows it only on its own terms, covered below.
Private label vs wholesale vs dropshipping at a glance
| Private label | Wholesale | Dropshipping | |
|---|---|---|---|
| Who owns the listing | You | The brand; you share it | Depends on the product |
| Up-front stock | Yes, plus any tooling | Yes | No |
| Who you compete with | Other products | Other sellers of the same product | Both |
| Measured in our data | 17 businesses | Seen only from the brand's side | None |
| Est. margin in our data | 21.1% to 58.7% | Not measured | Not measured |
Private label: what we have measured
Every business below sells its own brand on Amazon, made by a factory to its specification. Figures are for September 2026 (August for OTOTO), estimated from public data.
| Business | Est. monthly revenue | Est. margin | To test a first product |
|---|---|---|---|
| Draft Top | $104,361 | 58.7% | $9,776 |
| Songbird Specialties | $32,989 | 56.1% | $3,737 |
| MaryRuth's | $15,033,070 | 54.2% | no figure |
| Virora Mahjong | $170,650 | 53.8% | $3,565 |
| Gamblin' Golf | $12,000 | 50.7% | $1,084 |
| Mount Cleverest | $39,989 | 50.2% | $607 |
| Kajun Loaded Tea | $470,206 | 47.2% | no figure |
| Spite House Games | $89,989 | 41.3% | $395 |
| White Mountain Puzzles | $725,873 | 39.0% | $948 |
| OTOTO | $211,372 | 36.1% | $18,608 |
| Bizzikins | $20,625 | 35.6% | $1,945 |
| Doctor Jupiter | $461,097 | 33.9% | $7,310 |
| KALOTOYS | $156,692 | 31.5% | $897 |
| Highmark Collective | $51,482 | 27.3% | $13,815 |
| LIGHTEN LIFE | $50,975 | 24.1% | $5,464 |
| WOODLANDS USA | $77,683 | 23.8% | $1,227 |
| Restoration Games | $34,633 | 21.1% | $26,404 |
"To test" is our estimate of a first order plus launch ads for the lead product, before $790 to $2,420 of fixed costs for a new brand. Profit is a ceiling, with returns, storage and overhead at zero, and confidence is rated low on five of these 17. MaryRuth's revenue includes units resellers sold on its listings, and Restoration Games' margin is before designer royalties. The 18th business, Wet Noses, makes its own dog treats rather than ordering from a factory, at an estimated 28.0% margin.
Where private label margins come from
A private-label seller sets its own price, because no one else sells the same product. What it keeps depends on two costs it chose when it picked the product:
- The factory cost. MaryRuth's model puts cost of goods at 12% of revenue. Highmark Collective's puts it at 32.3%.
- Amazon's fees, set by size and weight. Virora Mahjong's FBA fee is about 9.5% of revenue. LIGHTEN LIFE's, for heavy glassware in wooden boxes, is about 30%.
Advertising is the third lever. For most of these businesses it is small; our model puts ads at under 3% of revenue for most of them. KALOTOYS is the exception at about 16.5%. All three costs are worked through in how much Amazon takes from sellers.
What private label costs you
The price is the up-front order and the risk that it does not sell. The cheapest test in our data is a $395 run of card decks. The most expensive is $26,404 for a board game with custom tooling. Four of the 17 need tooling, up to $9,000 for Draft Top's moulds. A wholesale seller pays none of that. See how much Amazon FBA costs to start for the full breakdown.
Wholesale: what we can see from the brand's side
We have not researched a wholesale seller, so we cannot give you a wholesale margin. What our data does show is two brands where wholesale resellers ran the Amazon listings for years, and what happened when the brand took them back.
- Wet Noses. Resellers held the Buy Box on its dog-treat listings until November 2025. That month the company's own seller account started winning it, and it took about 82% of the Buy Box over the 90 days to 15 September 2026.
- Restoration Games. Multi-brand resellers, and on a few listings Amazon itself, held the Buy Box on this board-game publisher's best-selling listings from September 2023, as far back as the data goes, until October 2025. Its own account took over in November 2025. In September 2026 it made about $34,633 of the brand's $44,018 in Amazon sales, roughly 79%. Resellers still sold the rest.
Those two cases show the core risk of wholesale more clearly than any theory. The listing belongs to the brand, and a brand can decide to sell on Amazon itself. When it does, it competes with its own resellers, and it does not need to buy the product at a wholesale price.
The fee arithmetic of wholesale
Amazon's referral and FBA fees depend on the item and its price, not on who sells it. A reseller using FBA pays the same fees on a product as the brand would. On Wet Noses' treats, our model puts referral at 15% and FBA at about 29% of revenue, so about 44% of each sale goes to Amazon whoever sells it. On White Mountain Puzzles' own Amazon sales, the two fees take about 46%.
So on products like these, a reseller has to buy at well under half the retail price to cover Amazon's fees before paying for freight, prep or ads. A private-label seller's factory cost is often a much smaller share: from 12% to 32% of revenue in the models quoted above. That is the structural reason wholesale margins are usually thinner. We have no measured wholesale margin to put a number on it. Use the Amazon FBA calculator with a supplier's price to see what would be left on a specific product.
What wholesale does better is speed and certainty. The product already sells and already has reviews, so there is no launch. You still have to win the Buy Box against every other seller of the same item.
Dropshipping on Amazon: the rules, and no data
We have no dropshipping business in our data, so we cannot tell you what one makes. What we can tell you is what Amazon allows. In its own guide (10 August 2025), Amazon says dropshipping is allowed as long as you follow its Drop Shipping Policy, and it summarises that policy as:
- You must have an agreement with your supplier that identifies you as the seller of record.
- Packaging, packing slips and invoices must not mention any third party.
- You are responsible for accepting and processing returns and for customer service.
The model's weakness on Amazon follows from that. The supplier ships, but you are accountable for delivery speed, packaging and returns, without controlling any of them. A private-label or wholesale seller using FBA hands most of that to Amazon.
Which model should you choose?
Jungle Scout's 2024 State of the Amazon Seller report calls private label the most common model among sellers. Our data is consistent with that, though it says nothing about the sellers we cannot see. On the evidence we have:
- Choose private label if you can afford a first order and want to own what you build. It is the only model we can show working, at margins from 21.1% to 58.7%. It is also the only one of the three that builds a brand of your own.
- Consider wholesale if you want to skip the product launch and accept thinner margins and a listing you do not control. Wet Noses and Restoration Games show what can happen when the brand decides to sell for itself.
- Be careful with dropshipping on Amazon. It is allowed, but under rules that make you responsible for a supply chain you do not run. We have no evidence of what it earns.
To compare private-label products by real revenue and startup cost, see how much Amazon sellers make and is Amazon FBA still profitable.