Thread by @TrungTPhan

Amazon’s white label business

Its ~1% of sales and prob not worth the regulatory scrutiny.

Thread 👇👇

1/ The first white label product was the Amazon Basics battery in 2009. Within a few years, it had ⅓ of online battery sales, outselling Duracell and Energizer.

2/ Today, Amazon has 400+ brands under “Our Brands” (some are private label and some are 3rd party exclusives).

By one estimate, these brands collectively bring in ~$1-2B of 2019 revenue (drop in the bucket for total: $280B)

Here are some:

3/ Of these 400+ brands, the top 4 account for 72% of sales (all with "Amazon" in name):

-- Amazon Basics
-- Amazon Collection
-- Amazon Elements
-- Amazon Essentials

4/ AmazonBasics is everywhere

• 70% of word searches on Amazon are for generic goods rather than brands (e.g., “shoes”, not “nike”)...
• ...and AmazonBasics sells 1300+ generic products...
• ...so 5.4% of top 1000 search results end up with AmazonBasics as a top 3 choice

5/ What makes AmazonBasics tick?

AmazonBasics targets categories where:

--products themselves are commodities
--no brand “owns” the category as a result of fragmentation and downward price pressure

Top categories:

6/ Like most white label offerings, Amazon’s pricing is LOW.

Of the top 10 white label brands, 49% are under $20.

7/ Looking across the 400+ white label brands (totalling 23k+ products), the majority of them are clothes (48%)...

...followed by Home & Kitchen (11%) and Grocery (8%).

8/ Source: @MarketplacePulse (*data is for 2019)

In light of regulatory headaches ("AMZN stealing our products"), the white label biz is prob not worth it.

It accounts for ~1% of revenue (conversely, Costco’s Kirkland brand does $40B; ⅓ or revenue).

marketplacepulse.com/articles/amazo…

9/ Amazon DOES have higher end brands:

--Nod by Tuft & Needle mattresses
--Stone & Beam furniture
--Rivet furniture
--Comfort Zone pet supplies
--Amazon Collection jewelry

Still doesn’t move the needle (eg. Amazon Collection jewelry has 4k+ items with an average price of $221)

10/ FYI, I got the @-mention wrong.

It’s @MarketplacePuls and — also for reference — it’s CEO @juokaz

11/ Great point re: Target as reference

https://twitter.com/vijayswamy/status/1344065778635702273

12/ To Amazon’s credit, the name of their internal groups that study competitors sound less ominous now:

❌ Wayfair = “Wayfair Parity Team”
✅ Shopify = “Project Santos” (ironically enough, “santos” means “saints”)