Amazon is a well-known brand that's always pushing the boundaries of business to the max and their recent endeavor is nothing short of brilliant.
Since Amazon is always looking for ways to expand its B2B customer base, the brand launched an entirely new Industrial category and its first B2B private label brand, Amazon Commercial.
This private label brand is aimed at selling paper towels, tissues, and bulks of toilet paper and the results are already evident. The most popular product is an 80-roll pack of toilet paper rolls and it's selling at rapid speeds, going up to 1230 units per month.
What's really interesting about AmazonCommerical is the goal. Is Amazon trying to beat the competition in this niche or is it trying to make a point?
What's the role of this private label brand on the market? To give the right answers to these complicated questions, we need to take a look at some stats.
According to a recent survey from Frost & Sullivan, B2B sales are expected to surpass B2C by 2020. Judging by TJI Research, this isn't the first time Amazon is launching private label products and brands. It did so a couple of times over the last couple of years.
Despite the fact that Amazon's private label program is still in the early stage of evolution, there's no doubt that the brand is showing a lot of interest when it comes to B2B and the potential it has.
Surpassing anti-trust scrutiny with a vision
Amazon's assortment of exclusive brands and private labels is rapidly growing which is putting the brand under lots of fire.
Amazon continually keeps overrunning competing product pages with endless pop-up ads aimed at boosting their products.
There's a conflict of interest when a brand wants to dominate the marketplace and sell their own products in it at the same time. But that's nothing new since retailers have been doing it for a long time.
Amazon is just trying to keep up with its retail competitors, only the brand actually falls behind when it comes to how many private label brands it offers.
Currently, Amazon offers 141 private label brands, each in its own niche. Some of the most known brands are Rivet, Solimo, Amazon Basics, and Amazon Elements. There are 598 Amazon-exclusive brands and 10 in the Industrial category but AmazonCommercial is the first of its kind, as an actual Amazon private label. Because of that, it falls into its own category.
Amazon has huge amounts of data on product profitability, product segment trends, category sales, but they need just one more thing to make their 10-year vision come true.
We are talking about in-depth knowledge and market-level expertise that will give additional value to private label brands. This allows them to establish an innovative customer-brand relationship without damaging already established category values.
The only way Amazon can acquire such knowledge and expertise is by coping with national brands that are already well-established. According to Alexandre Manoukian, Head of Ecommerce at Nestlé Professional, it's surprising that Amazon has planned to take such steps.
The best explanation is that Amazon obviously has a long-term strategy that is yet to be shown to the public.
One thing is certain – the launch of Amazon's first, cost-efficient B2B private label brand is just part of their new vision.
Setting an example for national brands
By expanding into the private label brands category, Amazon made a clear statement that no major product category is without a competitor.
ScrapeHero research shows that Amazon has positioned its products into a very acceptable category, not too expensive or cheap; simply, available to all types of consumers.
Amazon is not looking to build a following or develop a brand; it's looking to bridge any aperture in its product assortment.
What is really interesting is that Amazon does things in a different manner than national brands. It's safe to say that the brand is following a set of rules of its own rather than going with the flow that national brands follow.
Amazon's creative material isn't limited to the well-known product guidelines where there is a white background for each product and each item has a main image.
Amazon defies that requirement by changing the background to make the products stand out in search results.
All vendors, sellers, and retailers can take a sneak peek at the tactics Amazon uses for promoting its new label brand. There are three major tactics available:
● Amazon Vine Review Program – a great tool for increasing the number of product reviews
● Display ads – a great tactic for using competitor product pages for targeting ads
● Sponsored product ads – a keyword-driven tactic for retailers using Amazon's platform to sell their products that provides premium placement in search results
Amazon is not seeking to disrupt the marketplace but rather gain credibility and accelerate the expansion to new B2B categories. There's a mutual interest between Amazon and national brands and both are needed for B2B markets.