17 Apr A detailed review of the performance of Amazon Private Label Brands describes the tactics and the performance of these products and paints Amazon not always as the category killer everyone expected…
According to Marketplace Pulse research, Amazon-owned private label brands are not nearly as successful as many paint them to be. Amazon has been successful in creating generic items at low prices, but only when using the Amazon brand name (i.e., AmazonBasics and Amazon Essentials). Otherwise, the hundreds of brands and tens of thousands of products launched are not resonating with customers.
On the surface, Amazon is utilizing its knowledge of its powerful retail machine to steer shoppers toward its in-house brands and away from its competitors. The goal of this research was to check if this was true. To validate if the success of AmazonBasics batteries could be extrapolated to other brands and different categories.
We analyzed over 23,000 products launched by Amazon under more than 400 different brands. Some of those brands are private label brands built by Amazon, and some are exclusive brands made by a third party. All under the “Our Brands” umbrella, a collection of Amazon private brands and a curated selection of brands sold exclusively on Amazon.
According to our research the Amazon-owned Top 10 most successful private label brands, including the likes of AmazonBasics and Pinzon, contribute estimated 81% of the total sales. Amazon added more than 100 brands in 2018, but none of the recent launches are category leaders. Amazon has attracted much attention with every new brand they launched, however the assumption that every new brand will be as impactful as AmazonBasics is unfounded. It is Quantity vs. Quality – AmazonBasics represents less than 5% of products launched, but more than 57% of sales.
Sourced through Scoop.it from: www.marketplacepulse.com
WHY IT MATTERS: when Amazon started to use its knowledge of best sellers in certain categories to sell products under its own brand, huge alarm bells started to sound. After a few years this study shows that even this unfair advantage is not sufficient to make Amazon the runaway competition killer. But with the expected rise of marketplaces in the coming years, this trend may prove difficult to bear for brands and smaller retailers that distribute on these online channels. Let’s hope it doesn’t backlash for Amazon and others…