The Reason for Amazon’s Aggressive Expansion of Their Private Label Brands

E-commerce giant Amazon has more than 150 private label brands, more than many consumers realize. There’s s Amazon Happy Belly, which sells gourmet foods, which is obviously produced by Amazon and Lark & Ro women’s fashion clothing, which does not disclose a relationship with Amazon on the brand’s Amazon listings. There’s no sign consumers prefer Amazon’s private label products, with a few exceptions, regardless of whether they know it is an Amazon brand.

In certain categories, Amazon is dominating the market. Of all battery sales online, nearly one-third are AmazonBasics brand. Amazon’s private label brands are usually cheaper than the competition, sometimes selling at a loss to fuel expansion. Amazon’s commodity private label products are doing well, but fashion shoppers are fickle and loyal to a label where commodity shoppers want the cheapest price. Sellers on the Amazon marketplace usually cannot compete with Amazon on price so they must focus on brand loyalty by selling an experience, not just a product. Consumers know that cheaper isn’t always better.

Amazon has the ideal platforms to promote it’s private label products. The company’s products dominate premium listing space on Amazon’s website and mobile app. They also promote their private label brands to consumers making Alexa voice queries. Private sellers who use Amazon’s marketplace are free to develop their own private labels, although now they have to compete with Amazon on Amazon’s platform. Still, Amazon needs sellers so they can gather data on what sells and at what price point so they can decide which private label products to produce.

Amazon is taking advantage of consumers need for value, even when purchasing premium products. The company’s Wag dog food competes with other premium dog food brands with meat as the number one ingredient and no grains as fillers, however, Wag is less expensive than other, similar brands. There’s no stigma attached to buying private label products anyone.

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