Amazon’s private labels: is anyone winning?

Amazon has been pouring money into developing its own private labels, a report by data-research firm Jungle Scout seems to suggest. Its massive distribution and shipping channels has serviced third-party brands well for years, now Amazon is also starting to utilise that capability to sell their own products. Already making headway in the sale of electronics, the online retail giant is now turning its ambitions to fashion; a whooping 87.8 percent of their private labels are in the clothing category, according to a report by data-research firm Jungle Scout. But how well are they doing? FashionUnited takes a look at at the performance of these brands, and the factors their sales figures.

Low price is king

Most brands’ sales are still relatively low-volume and, as shown on the graph, congregate on the lower end of sales figures. Women’s clothing, in particular are the worst performing category on Amazon, with 82 percent of brands fail to sell more than 100 units per month. Best performing brands tend to have a lower price range, and offers a wide variety of basic items to the consumers. Brands boasting the largest sales figures all offer cheap products, while the more expensive brands all fail to perform well on the platform.

Search term quality has mixed influence on sales

The logical next question to ask is: what are the determining factors that influence sales? A likely suspect is ‘searchability’: how likely is a customer to land on a particular product page via the search box.

Curiously, it is shown that there is no clear correlation between search term quality and actual sales made. Brands with great search hit rates great can still be making very little actual sales, while the best performing ones do not necessarily have the best search term quality.

In providing search results, Amazon ranks products organically based on relative sales and reviews, offering no boost or ‘unfair advantages’ in terms of ranking to their own private brands. Consumers are equally likely to come across Amazon’s private brands and other third party brands when searching on the platform.

Since 2016, Amazon has been adding more than 22 private labels to the platform, indicating a strong ambition in continuing growth on the fashion sector. Currently, Amazon trails only Wal-mart as the top apparel retailer in the USA; given this important market position, it does not surprise that Amazon would try to expand the presence of their own private brands.

Source: Jungle Scout

 

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