Amazon shifting focus to exclusive brands

BY Marianne Wilson

Amazon is starting to compete with itself in a few categories.

Private brand expansion has been a major priority for Amazon, with several new labels being introduced every year. But the online giant is now slowing its private brand expansion to invest in a number of Amazon-exclusive brands, according to a new report by e-commerce analytics company One Click Retail.

Unlike Amazon-owned private labels, these brands are owned by manufacturers, such as Perrigo and First Quality, and still benefiting from the high visibility that comes from being an ‘Amazon Brand.’ Basic Care, for example, launched in August 2017, is owned and manufactured by Perrigo. Basic Care over-the-counter medicine is the Amazon-exclusive alternative to Perrigo’s own Good Sense brand, and as of the third quarter, has now surpassed the latter in market share on Basic Care controls over 15% of OTC sales, while Good Sense has dropped from over 20% in January to as low as 9% during the third quarter.

“This illustrates the competitive advantage of being an Amazon-exclusive brand, giving manufacturers a significant boost to their visibility compared to other brands (even their own) by being labeled as an Amazon Brand,” said Peter Andrews, director of insights at One Click Retail.

The diaper category has served as a laboratory for Amazon’s private label strategy. After some initial failures in this category, Amazon found success with the Mama Bear brand, which grew in sales by over 40% from the second quarter of 2018 to the third, reaching average weekly sales of approximately $200K. While Amazon has continued to show their commitment to Mama Bear diapers, supporting them with a series of promotions in mid-July and early August, Amazon has also partnered with First Quality to introduce a new line of Amazon-exclusive diapers. Earth+Eden, owned and manufactured by First Quality, is a brand new line of baby diapers available exclusively on Amazon.

First Quality also produces Cuties, a premium line of baby diapers which has struggled to compete on Amazon against larger brands like The Honest Company. Earth+Eden shares many design and marketing similarities with Cuties, but benefits from the competitive advantage of being an Amazon-exclusive.

To read the One Click Retail report on the evolution of Amazon’s house brand strategy, visit The Amazon Effect: Private Labels and Exclusive Brands.


Leave a Reply

No comments found



Do you expect your business to be challenged by the ongoing escalation of the the heightened U.S.-China trade dispute?