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Amazon’s top 10 private labels get the lion’s share of the exposure that the e-tailer’s private brands receive from customers, accounting for a resounding 81% of all the customer reviews left for Amazon private labels, according to a study by Marketplace Pulse.
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And more than half (57.8%) of reviews for all of its brands belong to AmazonBasics, Amazon’s private label for household goods and electronics, making it the leader over second-place brand Amazon Collection (7.8%). Beyond the top 10 private labels, however, the shares of total reviews are even lower, especially for brands that don’t feature the word “Amazon” in their name.
For context, Amazon had 135 private-label brands and more than 330 exclusive brands on its retail sites around the world at the end of 2018, according to data from the TJI Amazon Brand Database cited by Internet Retailer.
Much of the discrepancy in popularity may be due to differences in catalog size. Of all of Amazon’s private-label brands, only three have more than 1,000 products: AmazonBasics, Amazon Collection, and 365 Everyday Value brands.
Meanwhile, a serious majority of Amazon’s private labels have below 100 products (89.3%) and 25% even have fewer than 10 products. These smaller catalogs could be causing the tiny share of reviews that each brand is responsible for, meaning that review volume may not be the best gauge of success.
Amazon’s recent aggressive promotion of its private labels may, in part, be an attempt to boost exposure for its private labels. For example, the retailer recently tested a feature in its mobile app that showed a pop-up for cheaper items, often from Amazon’s own brands, on competing listings.
And it experimented with showing “Similar item from Our Brands” links directly below listings for non-Amazon products in October. While such tactics may work in the short term because they forcefully pull attention to Amazon’s products and the lower prices they offer, they may also make third-party sellers very unhappy selling with the e-commerce giant.
Amazon may face issues with its private labels in the future due to antitrust regulation. Amazon currently occupies a unique and very powerful position in the US e-commerce landscape: It runs the largest marketplace and sells private-label products on that same platform, allowing it to monitor what items sell well before investing in new product categories.
However, this power has also brought scrutiny from legislators, including 2020 Presidential hopeful Senator Elizabeth Warren, who’s said that Congress should pass a law preventing large companies from owning a marketplace and selling on it simultaneously. If such a law were ever to come to pass, Amazon would have to fundamentally shift its private label strategy, potentially spinning those brands off into a different business to avoid conflict with the new legislation.
And if the e-tailer’s private labels become a separate business, they would no longer be able to benefit from the sales data that Amazon gathers from its marketplace sales, weakening their ability to target popular categories.
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