Costco's low-cost private-label Kirkland brand is one of its most valuable offerings. It has been around since 1995 and accounts for about 25% of Costco's $118.7 billion in annual sales.
Kirkland is not only cheaper than other national brands, it also has a reputation for being good-quality.
"I am not sure there is another [private-label] brand that has established this level of trust," Timothy Campbell, a senior analyst at Kantar Consulting, told Business Insider.
Private-label brands have increasingly become a more popular choice as the stigma of "generic" goods has lifted. These brands have better margins for retailers are they are buying goods directly from the supplier and cutting out the intermediaries, which can drive up costs in the supply chain.
Amazon is also looking to grow its private-label offering across different categories. It currently has nearly 140 private-label brands and 406 exclusive brands, according to TJI Research. However, it doesn't have the history that Kirkland has just yet, Rachel Dalton, director of e-commerce at Kantar, told Business Insider.
"They've had a lot of misses and some hits," Melissa Burdick, president at Pacvue, told Business Insider.
She continued: "Amazon has taken its typical approach to things to private label – iterate, launch fast, fail fast – which sometimes comes at the risk of one of their coveted leadership principles of 'earn trust.'"