396: How To Make Millions Dropshipping Private Label Products With Annette De Lancey

Podcast: Download (Duration: 55:23 — 63.7MB)

You can run a private label manufacturing business with no warehouse and no local employees by contracting production to sewing partners who also handle pick and pack, and using Amazon FBA for volume. Annette De Lancey sells over 2,000 SKUs of her own manufactured orthopedic soft goods at Cast Coverz with one remote employee and a network of contractor partners.

In this episode I sat down with Annette De Lancey, a student in my Create A Profitable Online Store course, who invented a product category after her daughter broke her sixth bone and hated the cast she was given.

Below is the full breakdown: the reverse-engineered pricing formula, why the B2B model she planned for did not work, the virtual business structure, why her email list produces zero sales, and the supplier question that saves people thousands of dollars.

Key takeaways

• Price by reverse engineering. Cost of goods times five gives enough margin for both direct and wholesale.
• Her planned B2B channel failed. Surgeons want to refer patients rather than carry inventory.
• Amazon is volume, the website is margin. 13-14% return rate on Amazon versus under 1% direct.
• Email marketing produces zero sales. Huge open rates, no purchases, because nobody wants reminding of a broken bone.
• Ask suppliers what they would recommend. “You didn’t ask” cost her an entire 600-unit order.
• Facebook ads are unusable for her. Mentioning fractures gets accounts flagged, and the audience is unfindable.
• Businesses can contract as well as expand. She rebuilt as fully virtual during a divorce.
• Ideas are worthless without execution. Many people had the same idea and did nothing.

How to price a product you are manufacturing yourself

Price manufactured products by calculating your true cost of goods and multiplying by five, which gives enough margin to sell direct and still wholesale profitably.

The cost calculation includes labor to make it, materials, and packaging. Annette worked this out before setting any price, which meant her retail number supported a B2B channel from day one.

The same math runs in reverse as a research tool. Look at any product on the web or in a store and divide by four or five to estimate what it actually costs the company to make.

Why the obvious B2B channel did not work

Annette assumed orthopedic surgeons were her low-hanging fruit, bought an expensive booth at the American Academy of Orthopedic Surgeons, and got real orders. Then she discovered the model was wrong.

Surgeons want to be surgeons. They did not want to carry inventory, handle sales tax, or manage any part of retail. What they were willing to do was refer patients.

That shifted the entire business to direct-to-consumer, with an affiliate structure for practices that prefer commission over inventory. Pediatric and sports orthopedic surgeons turn out to be the most receptive.

The lesson generalizes: the channel that looks obvious can be structurally wrong for reasons that only surface once you are in front of the buyer.

How to run a manufacturing business with no warehouse

The virtual structure has three components: Amazon FBA holds the bulk inventory, a sewing contractor handles both production and pick-and-pack for website orders, and custom orders ship directly from the contractor who makes them.

Staffing is one remote employee running customer service from Utah, plus long-term contractor partners who expanded their services as Annette’s needs grew.

The transition came out of a difficult period. Facing a divorce and frustrated with California employment regulations after being burned twice, she restructured the entire business to be location-independent, initially planning to travel the country. The travel never happened, and the structure stayed.

Her point about business flexibility is worth stating plainly: you can expand and contract a business as your life requires, and that is legitimate rather than a failure. Fighting the inner critic about scaling back was harder than the operational work.

Why Amazon is volume and your website is margin

Amazon drives the volume and the website drives the profit, with the return rate telling the story: 13-14% on Amazon against under 1% direct.

That gap is substantial for apparel-adjacent products, where 13% is already low by category standards. Buyers arriving through the brand’s own site are better informed and better matched.

Annette is actively reducing Amazon dependence by building other channels, particularly B2B, which she values for the monthly recurring revenue that consumer sales cannot provide in her category.

Why some businesses cannot use email marketing

Annette’s email campaigns produce record open rates and zero sales, because customers do not want to be reminded of the period when they were injured.

She tested a $20 t-shirt as a stocking stuffer to recent buyers three separate times. Zero sales each time. Constant Contact called to ask what she had done, because the open rate was the highest they had recorded.

Calling customers gave the answer directly: nobody wants the reminder. Her daughter had told her the same thing years earlier about not wanting to discuss the business.

Abandoned cart sequences still work and convert well, sent at 12, 24, and 36 hours. Everything else does not.

This is worth internalizing as a category-level constraint. Some products are bought once during a bad time, and the standard email playbook simply does not apply.

Why Facebook ads do not work for every business

Facebook ads are unusable for Cast Coverz for two reasons: the audience cannot be targeted, and the platform flags the language.

There is no interest category for people who recently broke a bone. And mentioning fractures or broken bones in ad copy has gotten her account blacklisted repeatedly, requiring her to explain that she sells orthopedic soft goods.

What works instead: Google Shopping, text ads, dynamic retargeting, and Amazon advertising. Search intent captures the narrow window when someone is actively looking.

That window is genuinely short. If a customer is not reached within the first week, they conclude they will be out of the cast soon and do not buy.

My own business has the same structural problem. Engagement data is technically available and never converted well, because people do not keep it current.

The supplier question that saves thousands of dollars

Ask every supplier what they would recommend if you were their own family member, because they will not volunteer better options unprompted.

Annette learned this twice on the same product. Her first large order, 600 units for an orthopedic practice, had to be taken back entirely because the elastic was not latex-free. Her supplier’s response: “you didn’t ask for it,” despite knowing it was a medical product.

Then at her sewing contractor’s shop she noticed tattoo sleeves finished without elastic using a cover stitch. Asking why her product had not been made that way produced the same answer: “you didn’t ask.”

The question to ask on any manufactured product: if I were your daughter or your mother, how would you have this made? That single question surfaces the options suppliers assume you already ruled out.

How to get press coverage for a product

Two methods have worked consistently: HARO and reaching out directly to celebrities who break bones.

For HARO, respond quickly (on time or sooner) with a catchy subject line. Speed matters more than polish.

The celebrity approach is more unusual. When a public figure broke a bone, Annette would track them down and send product.

Lori Greiner from Shark Tank became a repeat customer across three separate operations and posted about it each time. Kelly Ripa was another.

For B2B outreach specifically, she sends a die-cut postcard shaped like a cast on an arm, mailed in a clear envelope. The response rate is far above standard direct mail because it is physically unusual.

Why ideas are worthless without execution

Many people had the cast cover idea. One person executed it.

Annette describes a woman at a talk who was excited about a frozen food product idea and refused to describe it, because her uncle had told her not to tell anyone. Ten years later she still had not done anything with it.

At the orthopedic convention, a wife dragged her husband over to point out that she had suggested exactly this product years earlier. Annette’s response: we all have ideas, and the difference is executing them.

The corollary is that the first version will be bad and should ship anyway. Her original product, logo, and packaging were, in her words, ugly, and she was proud of them at the time. You cannot learn what the market wants until something is in front of it.

Frequently asked questions

How do you price a product you manufacture yourself?

Calculate your true cost of goods (labor, materials, packaging) and multiply by five. That gives enough margin to sell direct to consumers while still supporting wholesale pricing. The same formula run backward estimates what any product on the market costs its maker.

Can you run a private label business without a warehouse?

Yes. Use Amazon FBA for bulk inventory, contract a manufacturing partner who also handles pick and pack for direct website orders, and ship custom orders directly from whoever produces them. Annette runs 2,000 SKUs this way with one remote employee.

Will doctors or professionals carry your product?

Usually not. Orthopedic surgeons declined to hold inventory or handle sales tax, and were happy to refer patients. An affiliate or commission structure works far better than wholesale for professionals whose core business is something else.

Does email marketing work for every ecommerce business?

No. Cast Coverz gets record open rates and zero sales, because customers do not want reminders of the time they were injured. Abandoned cart sequences at 12, 24, and 36 hours still convert well. Some product categories are bought once during a bad period and never again.

Why do Facebook ads fail for some products?

Two reasons: no targetable interest category exists for the audience (there is no “recently broke a bone” segment), and platform moderation flags certain language. Mentioning fractures repeatedly got the account blacklisted. Google Shopping and search intent work far better.

What should you ask a manufacturer before ordering?

Ask what they would recommend if you were their own family member. Suppliers do not volunteer better construction methods or materials unprompted. Annette lost an entire 600-unit order over elastic that was not latex-free, and the supplier’s explanation was simply that she had not asked.

How do you get press coverage for a new product?

Respond to HARO requests quickly with a catchy subject line. Track down celebrities who experience the problem your product solves and send them product. For B2B, unusual physical mail works: a die-cut postcard in a clear envelope substantially outperforms standard direct mail.