Presto! That’s the name of Amazon’s latest in a growing line of

private labels. This new brand of laundry detergent is off to quite a

start, selling a grand total of 20 units in its first week! While not

initially a threat to the biggest competitor (Tide’s top SKU sold

over 5500 units the same week), Amazon’s private brands tend to

sneak up from behind and surprise the market.

Is Amazon Playing Fair with Private Brands?By Spencer Millerberg, CEO at One Click Retail

Make no mistake: Presto!’s search rank of 17 is low for the term “laundry

detergent”, but that doesn’t need to be the case. Remember, Amazon owns

the product and the platform, so they can make their private brands as

visible as they want. With their first major consumables private brand

launch, Amazon placed their “Amazon Elements” diapers and baby wipes at

the top of the search results page; however, they were quickly flooded with

negative product reviews, supplier dissatisfaction, and customer comments

—leading Amazon to take a more considerate approach to future private

brand launches.

I’ve had an eye trained on Amazon’s private brands for years,

and believe they’ve learned from this false start. Today,

instead of stacking the deck in their favor, Amazon’s private

label strategy displays their commitment to fair play. Amazon

is taking its time with these brands, pushing them out slowly

and allowing them to grow organically.

Let’s back up. Amazon has spent years laying the groundwork

for their private labels. In 2007, the world’s biggest bookseller

introduced Kindle Direct Publishing, their own proprietary

ebook publisher that allowed them to work directly with

independent authors and eliminate the middleman (the Big

Five book publishers).

Since then, they’ve racked up a long list of brands with more

in the pipeline (Prime GT, Wickedly Prime). To protect against

any more false starts, there are half a dozen rigorous tests

each private label product needs to pass. A failure at any

stage results in the product being pulled. In fact, a prototype

of Amazon’s laundry detergent was pulled prior to the

eventual launch of Presto!

Today, some of Amazon’s private labels are finally starting to

turn heads:

• The Amazon Basics brand is responsible for one third of all online

battery sales with 93% YoY growth.

• Amazon Echo is the platform’s top-selling speaker, growing 67% YoY.

• Even their new-and-improved baby wipes are eating up market share,

now up to third place in the category with 16% of sales.

Private labels aren’t without risk:

Amazon is already familiar with manufacturing issues,

additional strain on the compliance and customer service

departments and the very real possibility of suppliers pushing

back against Amazon as a competitor. In navigating these risks,

Amazon has chosen to grow their private brands slowly and

carefully, with many, like Presto!, barely making a splash so far.

I am convinced Amazon doesn’t do anything without rhyme or

reason. The slow burn of Amazon’s private labels is all part of

their plan. They don’t cheat; they haven’t stacked the deck

against other players, opting to let their private brands grow

organically and compete on a level playing field with other

brands. But that doesn’t mean they aren’t going to win.

Amazon knows what makes brands successful. As the largest

eCommerce platform in the world, Amazon has more product and

marketing data than just about anybody and they have no

intention of slowing down. Amazon has set their sights on being

more than just a channel for brands. They are a competitor, and a

formidable one at that. The ramp-up might be slow but should

never be underestimated. A slow burn can be silent but deadly.

To read more on Spencer’s insights into Amazon’s private brands,

check out:

http://oneclickretail.com/amazon-private-brands-expand-very-very-sl

owly/

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One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics and search optimization for brand manufacturers in North America, Europe and Asia. Thanks to our proprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracy is unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party business intelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and Home Depot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach and HP, rely on OCR insights to drive sales and profitability across eCommerce.

Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and other leading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based international B2B media company with a focused portfolio of market-leading events and information services products.

To learn more about how OCR can provide your brand with the competitive edge in today’s ecommerce marketplace, visit www.oneclickretail.com.

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