As Amazon revs up its private label business with new household goods and clothing brands, the company is quietly rolling out another way to get more exclusive products onto the site.
Amazon is inviting outside companies to "join the Amazon family of brands," according to a web page for "Our Brands." At the bottom of the page is a link where manufacturers can sign up to make products that become part of Amazon's own collection of private brands.
Meanwhile, Amazon has a job posting up that promotes the "Amazon Accelerator Program," which is luring manufacturers who want to create made-for-Amazon products. Another job listing from this week says the Private Brands team is seeking a leader to "help build a new program to rapidly expand our selection."
It all adds up to an ambitious effort by Amazon to offer brands that can't be found anywhere else, as CEO Jeff Bezos pushes his commerce site into competition with some of the world's best known consumer businesses, which also happen to be among Amazon's top partners.
"Amazon Accelerator creates new opportunities for manufacturers and offers a way for them to launch brands and products directly to Amazon customers," an Amazon spokesperson said in an emailed statement. "For customers, this program adds products to our assortment and allows us to offer an even wider selection of high quality products at a great value."
Amazon has been ramping up its private label business in recent years, and now has over 120 brands that sell exclusively on its marketplace, according to TJI Research. SunTrust Robinson Humphrey estimates Amazon increased the number of those brands by more than nine-fold since early 2016 and is on pace to generate $25 billion in sales by 2022, up from $7.5 billion in 2018.
Amazon has been giving its private label products more exposure across its site. They now show up high in search results under a separate box titled "Top Rated from Our Brands." In recent months, Amazon has also been testing a new feature that promotes its own private label brands at the bottom of its competitors' product listings.
Marketing support and customer feedback
Companies that join Our Brands get access to marketing support and tools that track performance and customer feedback. Amazon lists over a dozen categories it's targeting with the program, ranging from toys and shoes to lawn and gardening products. After signing up for the program, participants get redirected to a page with the address "amazon-accelerator.com," according to a seller who applied.
The SunTrust Robinson analysts said that by selling exclusive products, Amazon can generate better profit margins and can control the supply chain for sourcing inventory. It can also put more pressure on bigger brands to reduce their prices on Amazon to stay competitive.
"This trend should not only differentiate Amazon's offering, improve the user experience and help grow retention, but also prove accretive to margins, which through reinvestment, should reinforce Amazon's moat," the note said.
The accelerator could also help Amazon improve the quality of its private label products. Amazon's exclusive brand portfolio in the apparel category had the lowest customer satisfaction score versus the largest U.S. apparel makers, according to a recent report by research firm CFRA.
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