Amazon says its private labels are only 1% of its business, but new data shows some are seeing huge growth
- In a reply to criticism from Sen. Elizabeth Warren, Amazon said that its private-label brands account for only 1% of its sales.
- Most Amazon brands are still nascent, but new data shows that some are growing at a fast clip.
- It will likely be a while before Amazon's private-label business rivals that of other retailers.
- Visit Business Insider's homepage for more stories.
View all Offers
- 28% OFF
OPPO A31 (Mystery Black, 6GB RAM, 128GB Storage) with No Cost EMI/Additional Exchange Offers₹ 11490₹ 15990Buy On
- 48% OFF
Samsung Galaxy Note 20 (Mystic Bronze, 8GB RAM, 256GB Storage) with No Cost EMI/Additional Exchange Offers₹ 44999₹ 86000Buy On
- 26% OFF
Samsung Galaxy M52 5G (ICY Blue, 6GB RAM, 128GB Storage) Latest Snapdragon 778G 5G | sAMOLED 120Hz Display₹ 25999₹ 34999Buy On
- 17% OFF
Redmi Note 10 Lite Aurora Blue 4GB RAM 128GB ROM | Alexa Built-in₹ 14999₹ 15999Buy On
- 24% OFF
Samsung Galaxy M32 (Light Blue, 4GB RAM, 64GB Storage) 6 Months Free Screen Replacement for Prime₹ 12999₹ 16999Buy On
Amazon's private-label and exclusive-brand business has become controversial.
During a CNN town hall on Monday night, Sen. Elizabeth Warren criticized the company for its role as both a marketplace for selling third-party goods and as a direct seller of its own private-label goods.
"You can be an umpire, or you can be a player - but you can't be both," the presidential hopeful tweeted on Monday.
Warren's chief criticism is that Amazon could use the data it collects from acting as a platform for third-party sellers to help its private-label business, which would enable it to unfairly compete.
"When Amazon can tilt the online marketplace in its own favor, small businesses see an immediate impact in their profits. That can be absolutely crushing, it's not fair, and I'm fighting to end that," Warren tweeted.
In a response, Amazon tweeted on Tuesday that it does not "use individual sellers' data to launch private label products."
In a statement sent to Business Insider, Amazon elaborated: "Amazon uses data about individual sellers only to support them or enhance or protect our customers' experience. We prohibit the use of individual sellers' data to compete with them through our first-party offerings, including through our private label products."
Amazon also defended its use of private-label products in a separate statement.
"Private label products are a common retail practice, and Amazon's private label products are only about 1% of our total sales. This is far less than other retailers, many of whom have private label products that represent 25% or more of their sales," the company said.
Amazon's private-label brands, which include Amazon Basics, Presto, Solimo, Amazon Elements, and others, are indeed currently a small portion of sales.
All told, sales from Amazon's private-label brands are still under $1 billion, according to analysis by Marketplace Pulse. That's a lot taken in isolation, but it's also just a fraction of the $122.9 billion Amazon raked in last year from direct online retail sales.
These labels are also quite young, apart from Amazon Basics, which launched in 2009 and sells essential electronics, batteries, and other basics.
But data shows that sales of these brands are growing quickly. From 2017 to 2018, Amazon's more than 100 private brands only saw 2% sales growth, according to new data from Numerator. But, breaking it down into categories can reveal more.
For Amazon brands selling consumer packaged goods (CPGs), which include household, pet, baby, grocery, and health and beauty products, growth was actually 81%, according to Numerator.
It's still unlikely that Amazon's private labels will become as large as other retailers' private-label efforts anytime soon.
Amazon has made moves to put its private-label brands in front of customers to try to juice sales. It tested placing its own brands front and center so that customers could compare them to other brands, according to the Wall Street Journal. These ads occurred both as pop-ups in the app and on top of desktop webpages, forcing users to scroll down before they could see the product they intended to view.
According to CNBC, Amazon has already scrapped the test.
- Nawazuddin Siddiqui, Manoj Bajpayee and Pankaj Tripathi reminisce childhood days in BL Agro's latest ad for Bail Kolhu
- Snapchat reaches 100 million monthly users in India, partners with Flipkart, Zomato and MyGlamm for AR integrations
- Former Punjab CM Amarinder Singh announces new political outfit ahead of Assembly elections
- Microsoft records $20.5 billion in profits for July-September quarter riding on Cloud, Office biz
- Best barbeque sets for an easy grill