Amazon Private-Label Expansion: What Does it Mean for Third-Party Sellers?
by Liz Adamson, on November 21, 2018
There has been a lot of attention lately to the additional exposure Amazon.com, Inc. ("Amazon") has been giving to their private-label brands. Recently Amazon has been placing advertisements directly on product pages for products labeled “Our Brands” and has launched Amazon Accelerator inviting manufacturers to create new private-label brands for Amazon. The “Our Brands” portfolio includes not only Amazon-developed, private-label products but also brands that sell exclusively on Amazon.com.
Should Third-Party Sellers Be Worried?
In any business, strategic managers should be constantly watching for external threats and opportunities for the business and comparing them to their internal strengths and weaknesses to determine how to react. The landscape is constantly changing. Not watching and planning how to react to those changes will make staying in business difficult. The same is true for any Amazon seller, especially because the marketplace is so dynamic.
Amazon’s ever-expanding private labels and their increasingly aggressive marketing is certainly a threat to Amazon sellers. However, there is still opportunity for Amazon sellers to react and still thrive on the marketplace.
Branding and Positioning
There is a difference between a brand and a private-label product. Private labels are often just copy cats of other successful products, have little name recognition and are not differentiated from competitors other than the fact that they are often priced lower.
Brands, on the other hand, are recognizable and have their own personalities. Customers know which brands solve particular problems, which ones promise high quality and identify with particular brands that match their lifestyle. When something needs to be replaced or they want to buy a similar product, they can easily think of anywhere from one to half a dozen brands that will sell them what they are looking for.
Having a smart brand strategy can help Amazon sellers compete and even stand above Amazon private-label products. For sellers that are primarily private label, take a look at your existing product catalog and start looking for opportunities to develop your private label into a recognizable brand.
Is there something you do differently or better than the competition? Is there a unique need that you fill that other products don’t? Can you expand on that and create a brand that is known for how it solves a problem, for a unique approach, high quality or even for its amazing customer service?
Creating positioning and brand awareness will require you to explore channels outside of Amazon – both sales and advertising channels. A common saying in marketing is that a customer has to see your product 7-8 times before they will remember your brand name. Where and how you expand will be dependent on your product niche and customer base. Some products will do well advertising on social media, others search advertising, etc. Different eCommerce sites will be more appropriate for one brand over another. All brands should have their own websites where customers can come and learn more about the brand and what problem it solves.
Don’t Stay Still
The worst thing a seller can do is nothing. Sellers should constantly be monitoring what is happening on the Amazon marketplace and determining what it means for their business and how they can stay ahead of the game. As competition increases both from other sellers and Amazon, you will have to become more and more agile and sophisticated to stay in the game.