In recent months Amazon.com, Inc., the Seattle-based e-commerce and cloud computing tech giant, invested heavily in their private label business. It’s a bold action to increase margins and secure spaces in the marketplace with vertical control.
Brands like Lark + Ro (women’s clothing), Buttoned Down (men’s shirts), and Amazon Essentials (staple clothing) all made the top ten; however, the kids clothing brand Scout + Ro was the most impressive year-over-year increase at 542%.
While products under their private labels aren’t easily recognizable as Amazon-made, they have been winning over an impressive number of customers; according to a recent report by 1010data. Most notably, the Amazon brands experiencing major growth are AmazonBasics, Amazon Elements, Scout + Ro; as well as devices like Kindle, Echo, and Fire TV.
1010data, a top analytics firm, regularly tracks Amazon’s private label businesses. According to their insights, Amazon’s private labels only made up 2% of the total units sold (excluding subscriptions and marketplace) in the first half of the year. However, the figures rose to 12% during Prime Day, the company’s summertime version of Black Friday, exclusive to Amazon Prime members.
Amazon is hardly the only company that has approached private label business methods. Lever Ponds, a Canadian subsidiary of Unilever, has private label products that rival Procter & Gamble’s. Walmart has countless brands such as Simply Basic (beauty and health), No Boundaries (clothing line), Sam’s Choice (retail food brand), Ol’ Roy (dog food), and many more. Target has attempted to conquer the private label sector time and again, recently adding exclusive brands such as Goodfellow & Co (men’s clothing), Project 62 (modern home furniture), and A New Day (women’s mix-and-match apparel). Grocery chain Trader Joe’s has a number of phantom brands as well; however, their private label Crispy Cookies was an alleged rip-off of Pepperidge Farm’s Milano cookies, which resulted in a lawsuit and negative press.
Amazon Phantom Brands, Real Results
So what separates Amazon from the rest? The main reason their phantom brands are performing phenomenally is because they put themselves in direct competition, and in large numbers. The astounding number of products and brands alone is more than people realize, and a majority of them have had at least some sort of success.
AmazonBasics has led in performance so far this year, as their line includes a large collection of “everyday essentials,” including batteries, pet supplies, office accessories, (non-Alexa) Bluetooth speakers, and a wide range of home goods. Overall, these account for about 2,000 products, pulling in over $200 million in sales in the first half of 2017.
AmazonBasics was followed closely by the company’s private label electronics. Echo, Fire TV, and Kindle topped the list; respectively earning $120 million, $110 million, and $75 million in the same post-Prime Day time period. Based on the report, this group accounted for a combined 55% of the private label sales. Echo, Amazon’s voice-commanded smart speaker, has doubled their sales, up 101% year-over-year. Kindle Fire’s sales were even more remarkable, and nearly tripled with a 184% increase year-over-year.
Amazon Elements, one of the older private labels, is famous for its baby wipes. The household group recently expanded to include health supplements, and has subsequently contributed to the group’s $9.5 million sales in the past half year.
Amazon has developed successful lines of private-label clothing as well. Brands like Lark + Ro (women’s clothing), Buttoned Down (men’s shirts), and Amazon Essentials (staple clothing) all made the top ten; however, the kids clothing brand Scout + Ro was the most impressive year-over-year increase at 542%.
The e-commerce giant shows no signs of slowing down either, as a recent Quartz report revealed, Amazon has a number of new trademarks for currently unreleased private label brands. This bold strategy is a calculated one; private labels cater to Amazon’s bottom line of gaining better margins, regardless of whether these brands are marketed as their own or not.