Store brand products, often known as private label products, are made by a third party and sold under a retailer’s name. Typically, these products are sold at a lesser price than their name-brand counterparts. While private label brands aren’t exactly new—retailers have been creating them since the mid-nineteenth century—they’re still unexplored by online retailers and marketplaces like Amazon. Consumers find it difficult to recognize private labels online, and companies find it even more challenging to compete with the low costs because of this unfamiliarity.
Amazon has approximately 100 private label brands that sell in various markets, including food and beverage, automobiles, clothes, and electronics. Amazon brands typically design products comparable to name-brand best-sellers on the site and sell them for a low price, similar to private label brands we find in brick-and-mortar stores. You can read the Product Reviews for more information.
Amazon advertises its products as of excellent quality, and it lists them at some of the lowest prices available online. While this is fantastic news for consumers eager to save money, it has drawn the attention and concerns of government agencies and third-party vendors.
Know about brands sold under Amazon’s private label
In 2009, Amazon launched its first in-house brands, AmazonBasics and Pinzon, selling basic household goods. However, the corporation has recently increased its concentration on private label development. Just 30 private label brands were operating on the platform in 2017, compared to over 100 presently.
Some of Amazon’s brands are well-known, such as Echo and Kindle, but most aren’t. Amazon has around a half-dozen of its brands listed on its “Our Brands” page, and many of its product listings have “Amazon Brand” in the name or description to make them simple to spot.
Why are third-party merchants concerned about Amazon’s brands?
While Amazon claims that its private label products account for about 1% of total sales, sales in specific categories have exploded. Between 2017 and 2018, brands selling in Amazon’s core consumer packaged goods (CPG) category—household, grocery, baby, pet, cosmetic, and health products—grew by 81 percent, according to Numerator.
In recent years, AmazonBasics has experienced significant growth. The label increased at a steady 47 percent year over year over the previous 12 months as of April 2020. Indeed, at Jeff Bezos’ congressional appearance on July 29, he revealed the following facts concerning Amazon private label brands.
What strategies can you use to compete with private label brands?
You may be terrified by the thought of competing with Amazon if you’re a third-party merchant selling things on Amazon. The good news is that several techniques can help. As Amazon private label products are known for their low costs, most of Amazon’s brands have had minimal exposure on their website and elsewhere on the internet. The goal of private labels is to sell the cheapest products possible to consumers who appreciate low pricing, not to win them over with high-quality marketing and a compelling brand story.
In your marketing content and listing optimization, make sure to highlight the attributes that distinguish your product from similar, lower-cost private-label products. Perhaps your product is made with higher-quality components or is produced more ethically than its private-label competitors. Concentrate on the elements that distinguish you from private label products while also significant to your target market. When it comes to producing marketing that will persuade buyers to choose your product over a more basic, less expensive alternative, knowing and researching your target market is critical.