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Amazon primed to introduce new private label brands

In line with moves already taken by traditional retailers, Amazon gets set to start selling its own brands of snacks, diapers, and household goods.

Citing people familiar with the situation, WSJ reports the e-commerce giant Amazon will soon sell private-label goods on its website, including perishable food, starting as early as the end of May.

Introduction of new brands
Amazon shoppers will likely become quite familiar with the names Happy Belly, Wickedly Prime and Mama Bear. Yes, according to WSJ, these new Amazon brand names are coming soon to a computer near you.

Rumored to be available only to Amazon Prime members as soon as later this month, Amazon’s new brands — Happy Belly for food products such as nuts, trail mix, tea, and cooking oil; Mama Bear for baby products like diapers, baby food jars, gentle detergent, and other related items; and Wickedly Prime to feature snack foods — could act as a further draw for shoppers to sign up for Amazon’s membership if the quality and price of the goods are competitive.

An opportunity to increase margins
These aren’t the first private label brands for Amazon. In addition to launches of multiple in-house fashion brands to further diversify private-label offerings, the e-commerce giant already has an Amazon Basics line mainly composed of consumer electronics, and an “ethical” own brand product line called Amazon Elements, which promises transparency for items under its brand.

The new addition of perishable goods makes sense, especially when you think about the increased potential use of its Dash buttons in the home and the at-your-door service of its AmazonFresh program.

If Amazon is able to convince customers to switch away from their preferred brands in favor of Amazon’s private-label alternatives, the analytics and marketing power of Amazon has the potential to dramatically increase profit margins on historically low-margin products like groceries.

“Amazon is ‘carpet-bombing’ the market with new products,” said Bill Bishop, chief architect of brand consultancy Brick Meets Click. “Private label allows them to test out new prices and distinctive flavors with less risk.”

Tags: Amazon, Amazon Prime, Marketing

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