Amazon’s Private Brands and What It Means To You

Imitation is the sincerest form of flattery. We’ve all heard this saying before, and in some instances, it’s true. But when it comes to Amazon’s foray with their own private label collections — especially as it relates to third-party dealers and national brands — well, then it’s a bit dicey.
 
Here’s the thing: Not only does Amazon function as a marketplace upon which almost anything is available for purchase, it is also a living, breathing database that accumulates, in real time, the spending habits of their customers. It takes Amazon merely six months to cultivate a private label — from conception to manufacturing to merchandising — based simply on the popularity metric of another pre-established, well-selling brand. Further, while this newly created product will typically be of lesser quality, it will also have the full backing of the Amazon machine. Even Alexa, for instance, will select items from Amazon’s private label products over branded products when prompted.
 
The private label is in response to the growing number of sales from Amazon’s third-party marketplace. Currently it’s grown to almost 50% of all products sold on the platform. Amazon culls that information and industriously builds their own brands; sometimes only making certain items — Amazon branded and third-party branded — available to their prime members (thus increasing membership and/or solidifying customer loyalty). At the end of 2017 there were approximately 20 private label brands from Amazon, with products ranging from fashion to baby clothing to snacks. This stream is thought to add billions of dollars of revenue for Amazon.
 
It’s not an easy time for brands to sell on Amazon as they face competition from the very platform they themselves are utilizing. The cold hard truth is by selling on Amazon you are providing the company with intel that can be used against your own brand. It’s a catch twenty-two with no easy solution. Brands will need to begin turning around new products at a much faster pace while optimizing their own listings on Amazon.
 
Above all, market your brand. Optimise those listings. Retain customer loyalty. Make your brand one that customers will be loyal to, despite the (potential) shiny, dazzling pull of lower prices from Amazon’s private labels and the offer of free shipping from Amazon Prime.

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