Amazon’s alarming private label push
One of the reasons I started this blog originally was to warn people who sold on Amazon about the danger of doing so. My main focus was on FBA users due to their high and hidden fees. Another problem I had with Amazon is that they could use the data from their store to compete directly with you through a private label. Now we are seeing their alarming private label push which is ramping up. In this article from Techcrunch, we see Amazon moving into sports apparel as well as home furnishings.
This might not mean much to many people. If you are selling these things online then this should give you cause for concern. The charts below are from 1010data.
Amazon Basic Batteries
Amazon basic batteries account for 31% of the sales of battery sales online. So, when someone goes online to Amazon and searches out batteries, which of these brands do you think they will push to the front of the search?
Not only that but they are also getting money off of battery sales that are not Amazon branded
With 94% of online batteries being sold at Amazon, they are still making money off of 94% of the online battery sales even if that brand you buy isn’t an Amazon brand.
Through the Amazon family brand, they also have a large percentage of the baby wipes market was well.
80% of Baby wipe sales go through Amazon.com as well. They are getting a percentage of each one of the sales even if the brand isn’t Amazon just like in the case of the batteries.
What is next?
Now that we see Amazon moving and expanding their private label what will be next? If you are currently selling on the Amazon platform, then how safe is your business? Amazon collects millions of pieces of data on people and uses it to influence buying behavior. We see this in the things that are offered to certain people at certain times. The items that are discounted for some but not others all to get people to spend more money.
When your item is selling well on Amazon then it is great for you, but what happens when Amazon creates a private label of their own to compete with you? Their private label will inevitably be cheaper. Their brand will get more views on the Amazon site. The scope of their private labels is expanding into other lines of business and everyone should be aware of this especially if you are an e-commerce retailer.
The end of the small e-commerce store
This could spell the end of the smaller e-commerce niche stores that built up a small following on Etsy or their own website built in places like Shopify. These business can not survive on their own without Amazon, but can they also trust Amazon to not go after their business at some point? How many small businesses have already gone under thanks to Amazon’s dominance in E-commerce? These are the issues that I have with Amazon. Their shareholders want them to make a profit and they have yet to show a profit. They are investing earnings in growth which is great sometimes, but other times it can be detrimental to the community.
When Wal-mart came in to small communities everyone was excited to get everything in one store. It became a family experience with the restaurant at the front and the eye glasses place etc.. the family would spend hours there, people would save money. At the same time other businesses were closing down around Wal-mart. The same things happen when Amazon enters a new industry, stores fail to compete and close down.
At what point is this a monopoly? We will see what happens in the future of Amazon.
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