The Complete Guide to Amazon’s Private Label Brands

Kevin Lamb

July 2, 2021

It’s a scenario every retail shopper is familiar with: you find the name-brand product that you’ve been looking for when, to your delight, you find an almost identical store-brand product on the same aisle for a fraction of the price. If you aren’t particularly attached to the name-brand item, or if the product’s price is the most important consideration in your purchasing decision, you may choose to buy the store-brand product.

Store brand products, or private label products, are those manufactured by a third party and sold under a retailer’s name. Typically, these products are sold alongside their name-brand counterparts for a lower price. Some of the most familiar private label brands include Walmart’s Great Value brand, Target’s Mainstays brand, and Costco’s Kirkland Signature brand. Grocery store brands are among the most recognizable private labels, but department stores also make a significant number of sales on their own private brand clothing.

While private label brands aren’t new by any means—retailers have created private label products since the mid-19th century—they’re uncharted territory on online retailers and marketplaces like Amazon. This unfamiliarity makes it difficult for consumers to recognize private labels online and even more difficult for brands to compete with the low prices.

Amazon owns over 100 private label brands that operate in dozens of markets on its site, including food and beverage, automotive, clothing, and electronics. Similarly to private label brands we see in brick-and-mortar stores, Amazon brands often create products similar to name-brand best-sellers on the site and sell them for a low price.

Amazon bills its products as high-quality and lists them at some of the lowest prices online. While that may be great news for consumers looking to save a dime, it’s made Amazon the subject of intense scrutiny and concerns of both government entities and third-party sellers. If you’re a third party seller on Amazon’s site, we’re here to tell you everything you need to know about Amazon’s private label brands and how to compete with them.

 

Amazon currently has 146 private label brands, selling over 7,200 products that compete with normal 3P merchant products.
 

 

A brief history of Amazon’s private label brands

Amazon introduced its first in-house brands—AmazonBasics and Pinzon, which both sell everyday household goods—in 2009. Only in the past few years, however, has the company ramped up its focus on private label creation. In 2017, there were just 30 private label brands in operation on the site compared to more than 100 today.

Some of Amazon’s brands are widely recognizable, like Echo or Kindle, but most aren’t as easy to spot. Amazon has listed about two dozen of their brands on its “Our Brands” page, and many of its product listings are labeled with “Amazon Brand” in the name or description so it’s easy to identify them. That said, details about all of Amazon’s private labels are fairly limited.

Why Amazon’s brands concern third-party merchants

While Amazon claims its private label products make up about 1% of its total sales, its sales in specific categories have grown rapidly. According to Numerator, brands selling in Amazon’s core consumer packaged goods (CPG) category—household, grocery, baby, pet, beauty, and health products—saw an 81% growth in the 2017 to 2018 time period.

AmazonBasics has seen major growth in recent years. As of April 2020, the label had been growing at a steady 47% year over year for the past 12 months. Indeed, in Jeff Bezos’ July 29 hearing with Congress, he shared the following statistics about Amazon private label brands. While these brands make up less than 1% in the category, MarketplacePulse reported, they make up to 9% of sales (in clothing).

Amazon Private Label Brands Percentage of Total Listings | Pattern
Amazon Private Label Brands Percentage of Total Sales | Pattern
Screenshots from MarketplacePulse

Of course, this is nothing when compared to big-box retailers like JC Penney or Macy’s, who project that their private label clothing brands make up anything between 70% and 25% of clothing sales, respectively.

However, Amazon’s increase in sales has come with an increase in seller unease. According to our 2019 marketplace survey we conducted among ecommerce executives, Amazon’s private label brands are a top concern—73% of survey respondents say they are concerned with Amazon’s private label products competing with their own, and 57% of those indicated that they are very concerned. Sellers aren’t the only ones concerned—Elizabeth Warren called out Amazon last April for “tilt[ing] the online marketplace in its own favor” by selling private label brands.

A few months after Sen. Warren’s remarks, The Washington Post found Amazon had featured several of its branded products as “similar items to consider” when customers clicked to add an item of higher cost to their cart (e.g. AmazonBasics batteries were offered to shoppers looking for Energizer batteries).

At the start of 2020, Amazon appeared to be quietly removing similar features that could raise concerns about anti-competitive behavior, but there is still cause for concern. Between April 2018 and April 2020, the number of AmazonBasics best-seller products alone jumped from 660 to over 1,300, with AmazonBasics eating up prime real estate in certain search results pages.

Recent controversy from Amazon's private brands

Amazon has been the subject of several antitrust investigations in the past year. Historically, they’ve denied using sellers’ data to unfairly skew the market in their favor, but in a recent Congressional hearing, chief executive Jeff Bezos testified that he could not confirm Amazon didn’t use data it collects about products sales in its marketplace to launch its own private-label goods.

“What I can tell you is we have a policy against using seller-specific data to aid our private-label business,” Bezos said. “But I can’t guarantee you that policy has never been violated.”

In the hearing, Bezos was questioned about a seller who claimed Amazon created an identical product to their own and sold it at a far lower price, causing their sales to plummet overnight. It isn’t the first time Amazon’s been accused of copycat behavior that causes brands to CRaP out.

In November 2019, Allbirds co-CEO Joey Zwillinger called out Amazon for selling shoes under its 206 Collective label that look exactly like Allbirds’ Wool Runner shoes. The listing price for Amazon’s copycat product was $45, half the price of Allbirds’ shoes.

Amazon claimed in an October 2020 letter that an internal investigation into third-party sales data found no violations of the policy Bezos testified about a few months prior. This investigation—which only looked at two products—wasn’t enough to please the U.S. House Judiciary antitrust subcommittee, which released a report acknowledging the letter but maintaining that Amazon uses competing sellers’ third-party data to unfairly bolster its private-label business.

Despite the ongoing controversy and concern from brands, there seems to be limited legal basis for complaints against Amazon’s private labels, besides cases of copyright infringement.

It’s not unusual for retailers to use third party sales data to develop and market competing products. And while brands may be upset to see low-priced Amazon versions of their products suggested on their listing pages, this practice is similar to what we see in brick-and-mortar stores—Great Value breakfast cereals, for example, are usually placed next to their brand-name counterparts on Walmart’s shelves.

Just like is the case with other major retailers and their private labels, it’s unlikely that Amazon private label products will go away. Competing with these inexpensive products, and potentially even dealing with Amazon’s copycat versions of your products, is one of many costs of selling on Amazon. Instead of trying to make these products go away, brands should focus on their marketing and product quality so their product is still worth buying for consumers despite a slightly higher price.

How your brand can compete with private label brands

If you’re a third-party merchant selling products on Amazon, you may feel intimidated by the prospect of competing with Amazon. The good news is there are several practices that can help.

Since low prices are the main draw of Amazon private label products, most of Amazon’s brands have had limited exposure on their site and elsewhere on the web. The priority of private labels isn’t to win their consumers over with high-quality marketing and a strong brand story—it’s to sell the cheapest products possible to consumers who value low prices.

Because of this, Amazon products don’t have the same level of brand recognition as other companies, which means customers are generally less likely to trust them over another brand they’ve heard of or had good experiences with. Sharing your brand’s story and nurturing customer trust by providing exceptional customer service and high quality products is how your brand can stand out above private labels.

Marketing

In your marketing content and listing optimization, be sure to highlight the features that make your product unique from similar, cheaper private-label products. Maybe your product is made from higher-quality materials or more ethically made than its private label counterparts. Focus on the features that both set you apart from private label products and that are important to your audience. Knowing and researching your consumer base is key when creating marketing that will convince shoppers to pick your product over a more basic, cheaper version.

Gear and bag company Peak Design is a great example of such marketing. In March 2021, Peak Designs released a video that humorously outlined the differences between one of its products, the Everyday Sling, and a similar one sold by Amazon Basics of the same name.

The video—which has been viewed almost 5 million times—acknowledges the similarities between the two bags while also emphasizing its own design’s desirable features like fairly paid factory workers, carbon neutrality, a lifetime warranty, and high-quality, recycled materials.

In addition to these tips, implementing best-practices for SEO for Amazon that drive outside web traffic to your products and providing product listings that are easy to understand and engaging can help your brand compete.

Customer Service

Beyond product development and marketing, customer service can also play a role in convincing consumers to choose your brand over an Amazon brand. Exceptional customer service creates a chain reaction that can lead customers to leave positive reviews and push your content to areas on Amazon where it has greater visibility.

Product Variation

Another thing you can do is create new variations of the products you’re already selling with their own ASIN. One example is making your product part of a bundle so it’s different from similar products Amazon may sell.

Shipping and Fulfillment

It may also be helpful to research dropshipping vs. FBA when it comes to your shipping model. It’s becoming increasingly difficult to compete with Amazon’s fast shipping times, and for many sellers, FBA may be the best choice. Your brand will be more equipped to compete with Amazon’s private label products if you can ship products just as quickly and reliably as products sold by Amazon.

In addition to the fast shipping benefits, fulfilling your product orders with FBA can help give your brand more credibility and exposure than it would receive otherwise, especially since using FBA qualifies your products for Amazon Prime.

Ready to take on the competition? Pattern’s ecommerce experts can help you create a strategy to compete against Amazon’s private label brands. Get in touch today to learn more.

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Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)