Articles

Most brands aspire to be Apple or Nike, but on Amazon, they are closer to AmazonBasics. That is, shoppers buy their products when searching using unbranded search terms. Rather than explicitly looking for the brand, like they do for Apple and Nike.

Amazon conceived the marketplace to bring brands it couldn't convince to sell onto the site. Thus, for years most of the sellers were large resellers with tens of thousands of products. However, increased competition and brands going direct has eroded this opportunity.

2020 was the best year for e-commerce marketplaces in over a decade. E-commerce growth had a step change, and marketplaces captured most of it. In aggregate, it was the most successful year for sellers and brands that transact through them, too. The Year in Review looks at the state of marketplaces and describes the most important trends.

Nearly $1 billion in fresh capital has been committed in 2020 to Amazon aggregators looking to acquire Amazon sellers and brands. The market had a breakout year because of three factors: the pandemic accelerating spending on Amazon, Thrasio raising hundreds of millions of dollars, and Anker, an Amazon-native brand, going public.

9% of Amazon's sales in the Clothing, Shoes & Accessories department are from its private label brands. In response to House Antitrust Subcommittee questions following the July 29th hearing, Jeff Bezos included a breakdown by department of Amazon's private label brands share of total sales.

AmazonBasics products are not benefiting from the pandemic opportunity - the number of AmazonBasics best-sellers has remained flat for over twelve months. Generally, private label products do well in periods of recessions and pandemics. Amazon’s private label products did not.

Amazon has increased the number of placements promoting its brands. Out of twelve ad spots on its website and six on its mobile app, three feature its private label products, for some searches. Amazon is giving up advertising revenue it would have made otherwise by selling ads to brands to promote products which profit is unlikely to offset the loss.

Amazon's sales growth is unrelated to its catalog increase. No matter how many products Amazon adds to the catalog, there are only 48 items on the first page of search results. The outdated retail concept of the catalog size disregards the nuances of e-commerce, where shelf space has no cost and is thus endless.

Amazon will begin displaying the business name and address of sellers in the U.S. marketplace starting September 1st, putting the U.S. marketplace in line with the European, Japan, and Mexico marketplaces, where this information was always available because of local laws.

Issues affecting global supply chains and Amazon's warehouses have considerably reduced the number of new products launched on the site. For example, the number of new best-sellers in the headphones category shrank from nearly 200 a month to less than 20 during the last thirty days. The volatility of the best-sellers list is an indicator of the health of the private label sellers industry.