As a result, some people will view the launch as a shot across the bow at the big diaper brands, Huggies and Pampers, that sell their products on Amazon. Sellers on Amazon already gripe that Amazon sells the same products as they do. Now it is building a direct relationship with a supplier that allows it to undercut some of its own partners in a more significant way.
Elements product pages will also include information about the materials used in the diapers and wipes and from where they are sourced. This level of transparency seems to be aimed at appealing to customers of the fast-growing diaper brand Honest, co-founded by the actress Jessica Alba, which prides itself on making safe, eco-friendly baby products. Honest does not sell its goods on Amazon, instead opting this summer for a distribution agreement with Target. Now it finds itself with a target on its back.
From from Re/code:
The launch comes a year after I reported that Amazon was recruiting people to help create its own brand of products in the larger category known as consumables. Private-label brands such as Elements can allow retailers to keep prices low since there is no intermediary between itself and the manufacturer. For Amazon, it can help it boost margins on a product that is ordered with high frequency, or simply add a quality product at a price point others will be hard pressed to match. Grocer Trader Joe's has built an entire business on private labeling, while Target and Costco own successful private-label brands — including their own lines of baby diapers.
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While Prime is popular with families with young children, the introduction of an Amazon-branded product does not guarantee success. Amazon has introduced other brands over the years, but they largely remain under the radar. It sells a line of batteries and electronics accessories called Amazon Basics, a line of bedding dubbed Pinzon and an outdoor furniture brand called Strathwood. It'll also be difficult to convince parents to switch if they already buy a brand that keeps their kids dry and happy.