Why Private Label Brands Could Be Amazon’s Next Big Thing

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From Seeking Alpha:

From Amazon’s focus on increasing the number of private label brands it competes with, it’s apparent it is going to attempt to have them become a higher percentage of overall e-commerce sales an attempt to widen margins and increase earnings from its biggest revenue stream.

Investors have waited to see how and when Amazon would respond to the need to boost earnings from its e-commerce unit, and it’s now clear a big part of that will come from offering a larger range of its own brands across a growing number of categories.

Citing analysts from SunTrust Robinson Humphrey, Business Insider said sales from Amazon’s private labels generated about $2.5 billion in sales in 2016. On the other hand, 1010data recently reported revenue from Amazon’s private labels in the first six months of 2017 was a more modest $500 million.

I think the higher number is more accurate when considering Echo, Fire TV, Fire Tablet, and Kindle devices are among Amazon’s own brands, especially considering they don’t represent Amazon’s top brand sales category.

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Another factor is the speed at which Amazon can respond to customer demand once it’s accurately identified. It can get its own brands out their quicker than its competitors, which gives it a first-to-market edge.

More important, if Amazon does in fact perform close to what SunTrust Robinson Humphrey believe it can, it’s essentially creating another multi-billion dollar business from nothing, with the potential to give its e-commerce unit a big margin and earnings boost.

Link to the rest at Seeking Alpha

PG has purchased several Amazon Basics products and been very pleased with both price and quality.

2 thoughts on “Why Private Label Brands Could Be Amazon’s Next Big Thing”

  1. I’ve got several Amazon Basics products, too, and they’ve all been good (except one USB extension cable). Sometimes they’re unique, not just the best price/best quality.

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