Amazon muscles into own label sector, creating opportunities for wine producers
Online retail giant Amazon is offering potential opportunities for global wine producers to help it build its own label ranges.
The e-commerce company is on the lookout for major private label partners it can work with to develop “secret” Amazon brands, which is a booming part of its business, on track to generate a turnover of $7.5bn this year and $25bn by 2022 according to investment firm SunTrust Robinson Humphrey. To help that part of the business grow further Amazon is inviting manfacturers and producers to create products exclusively for its private brands stable.
The “Amazon Accelerator Program” is hiring a senior product manager for private brands, according to CNBC, in which the job listing invites applicants to “invent and think big to take an idea from concept to reality for Amazon customers.”And in another job listing, Amazon claimed that its “Private brands team is rapidly expanding and looking for an exceptional product leader to grow the business.”
Brands created via the accelerator program will be exclusively available via Amazon, but not owned by it, with manufacturers creating, producing, trademarking and owning the products they offer.
“Amazon Accelerator creates new opportunities for manufacturers and offers a way for them to launch brands and products directly to Amazon customers,” said an Amazon spokesperson speaking to Quartz. “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.”
However, this latest move by Amazon to muscle into own label could threaten those third party sellers who currently sell their goods on the Amazon site, and are important to the company’s bottom line. Amazon made $9.7 billion in revenue from commissions and services it provided to third-party sellers thought fulfillment and shipping fees, in the last quarter, ended July 26.
But the huge volumes of product sold by third-party sellers - which account for more than half of the total products sold on the site - also creates considerable headaches for Amazon, which has sometimes struggled to police offensive products or to ban fakes from the marketplace.
By collaborating with manufacturers to produce is own private label brands, Amazon could overcome these problems in one fell swoop. According to a separate report by CNBC, Amazon has been promoting its house brands at the bottom of listings for competitors’ products.