Understanding Amazon’s first venture in private label goods set to pop up within upcoming weeks
Amazon.com is currently the online retailer du jour for millions. With two-day shipping for Prime members, multitudes of helpful user reviews, and a seemingly endless inventory to boot, the Seattle-based company is betting on private label goods to boost profits.
Gone are the days of bland generic packaging of private label goods. Business giants like Sephora, Dean & DeLuca, WalMart, and more offer in-house brands—à la Costco’s Kirkland brand or Whole Foods’ 365 Everyday Value products—which, nowadays are often evocative of even higher quality products than brand names.
The Private Label Manufacturers Association noted that last year, store brands reached $118.4 billion in U.S. sales, gaining around $2.2 billion from the previous year.
Chief architect of brand consultancy Brick Meets Click Bill Bishop explained, “Amazon is ‘carpet-bombing’ the market with new products. Private label allows them to test out new prices and distinctive flavors with less risk.”
According to the Wall Street Journal, it’s been a few years that Amazon has been looking into featuring new private-label lines of goods to pad higher profit margins. This venture is set to include a major first for the company: perishable foods. And that’s not all.
Private label household goods, like diapers and laundry detergents, could be available online by the end of the month or early June. Nuts, spices, tea, snack foods, cooking oil, coffee, trail mix, baby food, and vitamins from names like Happy Belly, Wickedly Prime, and Mama Bear are in the works.
Amazon has teamed up with TreeHouse Foods Inc,’s branding consultants and manufacturers to focus on crafting new products “ahead of its own vendors.”
Labels like Amazon’s Pinzon linens and towels and Elements baby wipes have been available for a few years now and its AmazonBasics offerings include everything from cellphone cases to dumbbells, and even dog crates.
There are 30 million items of clothing for sale on Amazon.com.
According to Quartz, clothing ranks third in the fastest growing product area, after cell phones and kitchen items, which has produced the largest margins for the company in the last ten years.
Just in terms of women’s clothing, Amazon’s known in-house fashion lines are:
Bishop added that private label goods boast higher profit margins than name brands because companies save costs on marketing and brand development. With Amazon’s plethora of data, it has the potential to better predict which products will be hits with their customers.
Amazon plans to exclusively offer these private-label goods to Prime members, which costs $99-per-year.