American online retailer Amazon has started selling its own private label food, like Happy Belly coffee and Mama Bear baby food.
Larger margins
Just like with its own clothing brand, Amazon decided to stealth launch its own line-up of new brands. The most likely reason is that Amazon does not want to upset other companies selling things on its platform.
Private label sales carry a number of advantages for Amazon. First off, its margins are way higher, but it can also design the packaging itself and develop it in such a way that makes it cheaper to ship.
Only for Amazon Prime
Just like with its other private labels, these food brands are only available to Amazon Prime subscribers. Nevertheless, Amazon does everything it can to conceal the fact it is the manufacturer and seller of these items, not using the Amazon name anywhere. The company also wants to make sure its products are not considered to be cheaper alternatives, because its pricing is average, right in between the cheaper and premium items.
The private label market is becoming increasingly interesting: in 2015, it was a 118.4 billion dollar (106 billion euro) market in the United States, up 2.2 billion dollars (2 billion euro) compared to 2014.
