By: Jason Del Rey
Amazon laid the groundwork for a massive line of in-house brands when it launched the AmazonBasics private label in 2009. Seven-plus years later, that launch is paying dividends.
In batteries, for example, the AmazonBasics brand has become the most popular online, accounting for an estimated third of all digital sales in batteries as of last summer.
In the baby wipe category, the Amazon Elements brand, which is two-and-a-half years old, holds an estimated 15 percent-plus of online market share – behind only Huggies and Pampers.
Those were the two examples cited by investor Mary Meeker at the Code Conference last week, where she included Amazon’s growing private-label business on page 75 of her annual Internet Trends report. (You really should watch the full video of her presentation.) And they speak to the potential of this business line to become a major source of revenue — and profits — to Amazon over time.
As at other retailers, the private-label business at Amazon allows the company to offer low-priced alternatives to major brands as customers become increasingly comfortable with in-house brands. Retailers can keep prices on in-house brands low – in part because they don’t have to spend money on big traditional marketing campaigns to get them in front of shoppers.
On Amazon, that is true and then some, since the company uses a multitude of tactics to give its own branded products an advantage.
In the baby detergent category, for example, Amazon has given its Mama Bear product the relatively new designation of Amazon’s Choice in search results. If you search “HDMI cable,” Amazon advertises its own brand with a special banner above all the other search results.
Amazon also sells a selection of AmazonBasics items in its own bookstores, including the brand-new New York City location of which Recode recently published a photo tour.
Amazon currently sells hundreds of different products under the AmazonBasics name, from cutlery to medicine balls to poop bags for pets. Not everything has taken off.
In 2015, Amazon stopped selling its own line of diapers less than two months after unveiling them. It hasn’t brought them back. Amazon also appears to offer only one flavor, and one pack size, of Mama Bear baby food, about a year after launch.