Amazon Will Reportedly Scale Back Its Private-Label Products

Amazon Will Reportedly Scale Back Its Private-Label Products
Photo: SEBASTIEN BOZON/AFP, Getty Images

You would think the online retail monolith that is Amazon would be more over the moon with its recent $US12 ($17) billion Prime Day sales numbers, but instead executives are reportedly casting their eyes at their feet, scuffing the ground and wondering if having their own product range is even worth it.

The retail giant has been slashing the number of products bearing its own name, according to a report from the Wall Street Journal citing unnamed sources familiar with the matter. Company leadership reportedly told its private-label team to cut the number of items it sells and not reorder more items. Apparently, sales of these items aren’t doing so hot and regulators have been on their backs as well. Executives reportedly discussed reducing private labels by over half.

What exactly are Amazon’s private labels? They include brands like AmazonBasics, AmazonFresh and Amazon Essentials that offer products like clothing, supplies, batteries, computer accessories and more. There are other brands that the company owns that doesn’t precisely use its name, like Amazing Baby that sells nursery items and Revly, which sells vitamins and supplements. The constant allegation is that Amazon puts its own brands first before the other retailers on the platform.

Apparently, the move is just another step down on the ladder towards exiting the private-label business altogether, according to the report. Regulators in the European Union have been hounding the company over allegations it was benefiting its own products over other retailers who sold on its shopping platform. Recent reports showed that Amazon had been funelling nearly $US1 ($1) million to “grassroots” groups to try and nix that antitrust regulation in the bud. At the same time, the company is trying to appease the EU by saying they won’t use non-public data that it gets from sellers to help market its own products.

Though instead of making such rudimentary moves toward actually being competitive, Amazon is considering just backing out of the game altogether. Vox reported based on unnamed internal sources that Amazon executives — including Doug Herrington, the worldwide retail lead — had mentioned the move as a possibility as long as it meant they could avoid regulatory probes in both the EU and U.S.

An unnamed source quoted by Vox said that there was a “strong consensus” that this option was viable in case they ever had to negotiate a settlement with regulators.

In an email statement, an Amazon spokesperson said: “We never seriously considered closing our private label business and we continue to invest in this area, just as our many retail competitors have done for decades and continue to do today.”

Amazon isn’t the only company under the knife over antitrust issues. Google has been hounded both in the EU and U.S. over its ad practices allegedly favouring its own products on its platforms. President Joe Biden, lawmakers, consumer groups, and even late night talk show hosts have come down on the side of new regulations, but Amazon has remained steadfast in its antipathy toward any kind of regulations.

This is despite reports that Amazon is actively using data from its sellers to craft competing products. Last year, the company was caught actively trying to box-out independent retailers in India by outright copying products while using its own private user data to get ahead.