Despite Amazon’s aggressive promotion, its private label brands have seen very little success so far. Amazon’s spokesperson said that its private label products account for “approximately 1 percent” of total retail sales.
In an extensive report about Amazon’s private label business, research firm Marketplace Pulse concluded that only a handful of products, like batteries, have been successful, while the rest have mostly failed.
“The number of unsuccessful products and brands shows that the company doesn’t have it figured out,” Marketplace Pulse CEO Joe Kaziukenas wrote in the report.
Still, Amazon continues to double down on growing its private label offerings. As of March 2019, Amazon had 119 private label brands, in addition to 314 exclusive third-party brands that only sell on Amazon, according to research firm Gartner’s L2. Almost all of those brands have been created in the last three years, the report said.
Oscar Barbarin, a former Amazon employee who now runs the consulting agency ARMR, said Amazon may have bigger ambitions for those removed ad spots, and could bring them back in the future for other brands to bid on. By testing it over the past year, Amazon now knows how valuable those spots can be in driving sales and could charge a bigger premium for other brands willing to pay up.
“Amazon’s motivations could have been to test the efficacy of this placement for future ads,” Barbarin said.
Sellers, however, are showing relief for now, as some of Amazon’s promotions, like pop-up ads in its competitor’s product page, were considered too obtrusive, according to Judah Bergman, an Amazon seller of three years. The change, he said, will help sellers and brands advertise their products without having to worry about unfairly losing exposure to Amazon’s own product ads.
“It reassures us that Amazon is aware of the antitrust concerns and will allow brands like my own to continue to develop and flourish on Amazon without worrying about getting knocked off the page one day for no reason,” he said.
from Best News Update https://ift.tt/2YQ8dKC
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