Amazon is increasing their private label selection and is also aggressively pursuing white label candidates. These are potential opportunities and threats to manufacturers in every category. As recently as the week of August 13th, Amazon reached out to vendors seeking private label products in more than 210 new areas.
Softbank Group meanwhile just invested $240 million in the non-branded startup Brandless Inc. Brandless sells about 300 generic products on its website, through 4 categories. In comparison Amazon sells 564 million products in over 30 categories. Both Amazon and Brandless could attract customers away from traditional channels.
Brandless products are typically priced under $3, making it a much cheaper place to shop. The same gluten-free pancake mix that costs $3 on Brandless is selling for $8.99 on Amazon. In order to compete with Amazon, Brandless is focusing on expanding their logistic capabilities and increasing their selection. Amazon and Brandless aim to create a great customer experience that spurs repeat users.
Amazon’s private label products are quickly multiplying. The number of Amazon private label products has grown from 256 in 2014 to over 1,500 in 2017. Commonly, Amazon places its products above organic search results in special sections, such as “Top Rated from our Brands” and “Expert Recommendations (seen below).”
As Walmart and Home Depot have nurtured many private labels, Amazon is following suit as well.