Amazon's own brands are in vogue. How should sellers respond?

If being an e-commerce platform in the retail industry is like "processing for others ", then having your own brand is like mastering "core technology". And a private brand backed by a large platform is undoubtedly "born with a golden key in its mouth", and can get countless high-quality resources without "struggling".

Private brands have great potential, and retail platforms are entering the market

In fact, the concept of private brands has existed for decades, but has never made much of a splash. In order to reduce their reliance on third-party brands , more and more large retailers are now embarking on the path of branding.

Wal-Mart and Target are typical examples. These two retail giants each have no less than 10 private brands, which can generate $1 billion in sales each year, and Target's latest brand All in Motion even reached the $1 billion sales mark in its first year of launch.

Not to mention Amazon , the world's largest e-commerce retail platform , which launched its first private label, AmazonBasics, 10 years ago , mainly selling household daily necessities.

However, Amazon did not really pay attention to this track until three years ago, when it had only 30 private brands.

According to a Coresight Research report released in May last year , Amazon now has at least 111 private brands offering 22,617 products in categories including food and beverages , automobiles , clothing , home furnishings, pet supplies and electronics .

( Some Amazon brands )

The platform "favors" its own brands, and third-party sellers have a hard time speaking out

The retail platform's own brands are often sold at low prices and good quality , which may be good news for consumers who want to save money , but it has caused concerns among third-party sellers . Among them, the number of Amazon sellers who are worried about being forced to compete with Amazon's own brands accounts for as high as 73% .

Sellers’ concerns are not without reason. Although Amazon claims that its own-brand products only account for 1% of total sales on its platform , sales in some specific categories are growing rapidly .

Amazon ’s private-label brands in the core consumer packaged goods category (household, grocery, baby, pet, beauty and health products) grew 81% between 2017 and 2018, according to Numerator. AmazonBasics has also made great strides , with the number of best-selling products under the brand jumping from 660 to more than 1,300 between April 2018 and April 2020 .

Moreover, Amazon has a large amount of transaction history data on the platform, and operating its own brands may cause unfair competition and disrupt the market order. Unfortunately, such cases are everywhere.

Last August, The Washington Post discovered that Amazon automatically recommended its own-brand products when customers added pricier items to their carts , such as recommending cheaper AmazonBasics batteries to shoppers buying Energizer batteries .

In November 2019, Allbirds co -CEO Joey Zwillinger said that a shoe sold by Amazon 's own brand looks exactly like Allbirds' Wool Runner shoes. Amazon's knockoff shoes are priced at $ 45, half the price of Allbirds shoes .

This undoubtedly forces third-party brand sellers into the battlefield of "price war" .

An investigation by The Wall Street Journal last April found that Amazon used data from third-party sellers to help develop its own-brand products .

Although Amazon argues that third-party sales on the platform account for more than half of the company's total sales, exceeding its own first-party business, so there is no incentive to abuse the trust of third-party brands, and it has formulated policies prohibiting the use of personal seller data to formulate brand strategies, the U.S. House of Representatives Antitrust Panel and the above investigation have pointed out loopholes in these policies :

That could mean that when a single third-party seller dominates overall sales in the space , the aggregate sales data Amazon allows itself to use is actually the individual seller data.

But there is no need to be discouraged. Facing the competitive threat from Amazon's own brands, sellers are not helpless.

"Fighting" or "Refusing to Fight" are both ways out

First, unlike national brands, most of Amazon's own brands have limited exposure on its website and are not as well-known as other mature brands , so customers do not have a high sense of trust in them . Therefore, sellers only need to continue to sell well, provide good service, tell good brand stories, and cultivate consumers' brand loyalty .

Moreover, excellent customer service will bring about a positive chain reaction, triggering customers to leave positive reviews and thus improve your store's ranking .

Second, you can use your own ASIN to create new variations of your existing products , such as bundling your products to make them different from similar products that Amazon may recommend .

Finally, in addition to the above tips, utilizing SEO optimization to drive external traffic to your products and providing easy-to-understand and attractive listings can also help your brand win over the competition.

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