6 ms·

How is this different than private label goods sold by all retailers?

• rocketbop 5y ago
  Retailers generally want to sell brand goods, and the cheaper own label stuff is there to provide a range of prices. An exception would be budget retailers like Lidl who only sell their own goods.
  • mattmcknight 5y ago
    Wrong on both facts. They often make equal profit on their own brands, and Lidl sells other brands.
  • meany 5y ago
    This is not accurate. They attempt to maximize their profits and private label brands is a major effort to do that across retail. “With its billion-dollar private labels, Target has become a master at spotting trends, copying them, and capitalizing on them” “Target, for its part, seemed to see the C9 contract’s expiration as a chance to do what it increasingly does best: develop and launch a stylish brand internally—and keep all the revenue for itself.” https://www.fastcompany.com/90661935/retail-thrives-on-copying-trends-heres-how-target-won-the-imitation-game https://www.fastcompany.com/90661935/retail-thrives-on-copyi...
• h2odragon 5y ago
  retailers don't work to hide the name brand option or promote their generic alternative over it, usually. Amazon might well have gone further than advertising tricks; if they just failed to make alternative listing available to some number of users... how could that be proved?
  • jjallen 5y ago
    They may not work to hide the name brand option. They just choose to not offer the brand's products in the store at all, right? We don't hear about Wal-mart deciding to place Procter & Gamble's laundry detergent on the fourth row down and their private label at eye level in the store, do we?
    • sp0rk 5y ago
      > We don't hear about Wal-mart deciding to place Procter & Gamble's laundry detergent on the fourth row down and their private label at eye level in the store, do we? Because that's not at all how Walmart operates. All of the laundry detergent is on the same aisle and the generic versions are immediately next to their brand-name equivalents.
  • fallingknife 5y ago
    They do, though, by giving it favorable shelf space. Sometimes the even put tags on their product that say "Compare to X!" to point shoppers to compare prices with the equivalent product.
  • sumedh 5y ago
    > retailers don't work to hide the name brand option or promote their generic alternative over it They can put brand option on the bottom shelf while the store brand generics on the mid/top shelf so its easier for customers to pick up.
• falcolas 5y ago
  At an absolute minimum, meeting with a brand to look at their proprietary production processes to duplicate their look and feel. A practice called out in the article.
• judge2020 5y ago
  To add, a general argument is that retailers buy their stock and thus have the right to analyze sales of it, but this is a dying practice. Costco, for instance, demands a 6 month delayed payment on inventory[0], which effectively means they are following the Amazon route by being a marketplace for inventory which the distributor still owns. 0: https://youtu.be/mvk5tVMZQ_U?t=7195 https://youtu.be/mvk5tVMZQ_U?t=7195
• belval 5y ago
  I bring up this point every time something like this comes up and people usually say that somehow Amazon using "Analytics" and better ranking is the difference. Walmart's Great Value is exactly the same idea and is created and promoted the exact same way both in the their stores and on their website. I think what astonish me the most is that people are opposed to something that is actually a plus for the customer. Amazon Basics is definitely one of the great thing on Amazon right now. Instead of random cheap garbage I can buy stuff that I know will be "good enough" at a great price.
  • madeofpalk 5y ago
    First order effect might be a benefit to consumers, but this kills competition. Those brands and products that amazon copies could eventually die out, and now there's less competition in the market and less forces for better products for customers.
    • belval 5y ago
      Do we have any evidence of this? Walmart still sells non-great value products (started in 1993!) while I get why copying a niche product might cause the original manufacturer to die out and if there are examples of this I am more than willing to change my opinion. If you actually take a look at their offering (https://www.amazon.ca/-/en/stores/page/BFAE3282-E15B-47EE-9027-DE6D2D4DF0ED https://www.amazon.ca/-/en/stores/page/BFAE3282-E15B-47EE-90...), most of these are legitimately "basics", things that existed 50-100 years ago. Wilson won't die out because Amazon sells a volleyball, nor will Duracell because of offbrand AA batteries
  • kwertyoowiyop 5y ago
    This “everything is fine as long as the price is lower” logic is what’s wrong with our current lax anti-trust laws.
    • missedthecue 5y ago
      Why is it wrong? The goal of anti-trust laws isn't to protect inefficient businesses. It's to promote competition, and the entire point of having competition is that it lowers prices for consumers.
• camelboy 5y ago
  because amazon owns the marketplace and has access enormous information on what sells well and can use for its own benefits. This creates unfair competition.
  • namdnay 5y ago
    Walmart owns Walmart stores and has enormous information on what sells well and can use for its own benefits
    • mthoms 5y ago
      Walmart doesn't know where I live/lived, what I've purchased for the past decade, what I might be mildly interested in (searched for at one point), what movies I watch, what books I read, etc, etc. Walmart cannot cater it's experience to what it thinks I might buy. Amazon can. It's just not the same. There is a huge asymmetry of information (from both suppliers and customers) that makes Amazons overall practice feel much more predatory. Oh, and Amazon is 50% of all online retail. Walmart is something like 10% of all brick and mortar retail.
• madeofpalk 5y ago
  Scale, and the imbalance of data that favors Amazon. You don't walk into a retailer and shout out "I WANT TO BUY A BACKPACK".
• saberdancer 5y ago
  Difference is that in retailers, they take on the risk and product research. They buy the items from manufacturers, sell it and then sometimes they make their own cheap unlabeled versions (usually buying from the same manufacturer). Amazon is offering a big open marketplace where they invite people to offer goods, then they observe which goods sell well and how are they made, then the push out the sellers and they offer their own versions of it, essentially pushing the risk onto sellers and only reaping the benefits. They are abusing the trust of sellers on their platform and they get away with it because of their sheer size.
  • jessriedel 5y ago
    > Amazon is offering a big open marketplace where they invite people to offer goods, then they observe which goods sell well and how are they made, then the push out the sellers and they offer their own versions of it, essentially pushing the risk onto sellers and only reaping the benefits. But this is exactly what is done at innumerable retailers like Walgreens and Safeway. The retailer is a "marketplace" (they sell multiple brands for each product) who controls "search placement" (where each product is displayed, e.g., eye height vs. near the floor) and have insider information on how well the different products sell. They use this advantage to make their own knock-off brands, and its generally a win for the consumer.
• josefx 5y ago
  As all monopoly related things: market power. There are at least half a dozen retailers in my tiny home town alone, all with a good market share, they would have to coordinate to push a competing product that ends up driving everyone else out of the market. Amazon doing that by itself with a product on the other hand is devastating on competing products, because it has by far the largest online market share making it impossible to compete on equal terms with a possibly inferior product pushed by Amazon.