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Most Amazon Brands Are Duds, Not Disrupters, Study Finds (bloomberg.com) 103

Posted by msmash from the how-about-that dept.
An anonymous reader shares a report: The explosion of Amazon's private-label products -- batteries, baby wipes, jeans, tortilla chips, sofas -- has prompted concern that the world's biggest online retailer could use its clout to promote these house brands at the expense of merchants selling similar products on the web store. The issue even surfaced in Senator Elizabeth Warren's recent proposal to break up big technology companies. Turns out most Amazon-branded goods are flops that don't threaten other businesses at all, according to Marketplace Pulse. In a study, the New York e-commerce research firm examined 23,000 products and found that shoppers aren't more inclined to buy Amazon brands even when the company elevates them in search results. The study suggests popular political and media narratives about Amazon's market power are overblown, despite the company capturing 52.4 percent of all online spending in the U.S. this year, according to EMarketer.

The study used sales rankings and the number of customer reviews as indicators of sales volume for different products, including Amazon's own brands and brands sold exclusively on the site. Amazon's success has been limited to basic products like batteries where shoppers are inclined to seek generic alternatives to save money, the study found. But when competing against such categories as apparel, where household names have an entrenched position, such Amazon brands as "A for Awesome" children's wear don't stand out, the study found.
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Most Amazon Brands Are Duds, Not Disrupters, Study Finds More

Most Amazon Brands Are Duds, Not Disrupters, Study Finds

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  • In other news: dog bites man.

    How is this news? It is the normal way of things. Most companies are duds, few are disruptors.
  • I've enjoyed AmazonBasics mice, keyboards, and USB cables. Can't speak for the rest of their line.

    • Re:I like them so far (Score:4, Insightful)

      by jellomizer ( 103300 ) on Monday March 18, 2019 @02:58PM (#58293716)

      Nearly every store have their generic store brands versions of common supplies.
      They sometimes market them so they look more classy, or just keep the packaging bland, to let you know you are getting the cheap version.

      Someone who buys an AmazonBasics Mice, Keyboard, Cables... Are not interested in getting the High End Fast Responce Mouse, The mechanical keyboard with clicky blue switches (or less clicky brown). Cables that are not coated in Gold because they think you will get a better result from it, or at least need to less worry about it corroding.

      The reason why we will often go to a Name Brand, isn't because the Brand is better, but more to the point there is less of a chance it will suck, for the known brand names, the companies work rather hard to keep their quality consistent. Vs that one generic keyboard that worked like a champ for decades, while the next on you bought (same model) had keys popping out from too fast typing.

      • Re:I like them so far (Score:4, Funny)

        by No Longer an AC ( 4611353 ) on Monday March 18, 2019 @04:30PM (#58294358) Journal

        Those who think Amazon Basics are garbage should just buy Monster cables for everything.

        Does Monster make AAA batteries that cost $10 apiece too?

      • Someone who buys an AmazonBasics Mice, Keyboard, Cables... Are not interested in getting the High End Fast Responce Mouse, The mechanical keyboard with clicky blue switches (or less clicky brown). Cables that are not coated in Gold because they think you will get a better result from it, or at least need to less worry about it corroding.

        However, for those of us that are in the market for gold plated high end fast response mice, Amazon Essentials has some awesome khaki pants. [amazon.com]

        They've got you covered either way.

    • Cables ordered online seem really hit or miss generally, but so far the Amazon cables seem to have decent build quality and have not failed.

      • Re: (Score:3)

        by lgw ( 121541 )

        And I think that's the key for when Amazon Basics actually do well: markets where people routinely pay large amounts just to avoid bottom-tier crap. Cables are of course a great example: people buying a $20 Monster cable just to avoid the problem with $0.20 cables created a great opportunity to market a solid $2 cable.

        I doubt they'll do well in anything fashion-related, where there tend to already be "basics" brands that serve this need.

    • Comment removed based on user account deletion

  • Who paid for this study? (Score:1)

    by Anonymous Coward

    Seriously who paid for this study? I bet if you look hard enough somewhere the money trail will lead back to Amazon.

    • That's pretty much what I was going to say. It seems these days unless you know the backer of the study it is difficult to really interpret what the numbers mean.
    • A quick glance didn't turn up any information about a particular company or entity commissioning this study, but the group that did it does have a clients page [marketplacepulse.com] that list some of the companies that they work with, which might give you an idea of who might have commissioned it. Alternatively, they might have done it themselves just so that they can market themselves and their services to those companies as a way of showing off what kind of information they can provide. It still could well be Amazon as you poi

    • There is always someone afraid of disruptive products going to the market.
      While the Race to the bottom is rarely every beneficial to anyone, it is often considered the best way to do things.
      Here is the Race to the Bottom.
      I have trinket X which I sell for $50.00
      A competitor sells their trinket X for $40.00 because it is cheaper they sell more of them, but often they have lower quality, or their profit margin is slimmer.
      So now I have two options still sell X for $50.00 and try to convince people why it is be

  • Isn't that the point? (Score:1)

    by Anonymous Coward

    They don't need to compete on merits, they just need to slowly stop allowing competition onto the amazon store. Bit by bit, starting with the higher profit and more lucrative items, and creep towards a future where everything on the "virtual shelves" is amazon branded.

    The same way just about everything on wal-mart shelves is now "Great Value" branded.

    Amazon is big enough to win the war via attrition.

    Who cares what some shill silicon valley horseshit mill was paid to "research"?

    • Re:Isn't that the point? (Score:5, Insightful)

      by jedidiah ( 1196 ) on Monday March 18, 2019 @02:45PM (#58293624) Homepage

      If that's the best you've got then you've proven the opposing position.

      I'm not sure you've even stepped foot in a Walmart. Although you don't even need to go that far since they have a website for their pickup service.

      Store brands that you want to inspire mindless hysteria over have been common probably since before you were even born.

      Walmart in particular is all about what sells and they have the IT chops to best understand what does sell.

  • AmazonBasics stuff may or may not be any good, lots of people have examples of stuff they like. But the Amazon Basics add-on items I've tried have been pure trash. For example, a camp toaster that smelled horribly of machine oil even through several heat cycles. No idea if the steel was pickled in oil to begin with, or it was inundated with oil during the manufacturing process, but either way I don't need my toast contaminated with oil. That stuff should be thrown away, not sold at a discount.

    • Re: (Score:2)

      by dublin ( 31215 )

      This is not so much a problem with Amazon Basics per se, but rather a problem with the Chinese Shit that seems to be all that comes out of that wretched country. I used Amazon's brand for batteries until I got burned with a $20+ box of batteries that lasted only a few hours each - Chinese Shit.

      I have no idea if Amazon's other branded products are any good or not - once they burn me like that, it's game over - they've totally lost my trust. This had a big impact, as our household was on the way to buying e

  • Amazon's men's clothes - for normal clothes, like trousers and t-shirts are simply superior to non Amazon alternatives. They're constructed fine, but more importantly, they have all the sizes and leg lengths available. This is not true for pretty munch any other brand. Either they don't make it or they don't have the combinations for whatever size you need, unless you land right in the middle of the population distribution.

    It's cheap too.

    • I've bought clothes for years from LL Bean because of above average quality at reasonable prices, and most importantly the ability to always find specific size combinations that are almost impossible to find at retail, unless you want to buy weird items on sale or pay full price.

      I've always said in my next life I want to come back as about 5'4 so I can get great stuff on sale. The sales racks are always full of men's small (and medium, to some degree) and I've never been able to figure out why this trend p

  • This puts my mind at rest. (Score:1)

    by Anonymous Coward

    So because an attempt to monopolise the entire product chain from web order to delivery has so far been unsuccessful, we shouldn't worry about it? Doubtless Amazon will be bust long before the competition because they aren't winning yet /sarcasm

  • Wow (Score:4, Insightful)

    by WolfgangVL ( 3494585 ) on Monday March 18, 2019 @02:38PM (#58293580)

    Amazon's market power are overblown, despite the company capturing 52.4 percent of all online spending in the U.S. this year

    Now say it again without laughing.

    • Re:Wow (Score:4, Insightful)

      by 93 Escort Wagon ( 326346 ) on Monday March 18, 2019 @02:54PM (#58293686)

      Yeah, the timing of this study’s release is remarkably convenient... for a certain retailer.

    • Despite what it may seem like for those of us who buy nearly everything online, eCommerce is still more hype than reality. Retail sales (i.e. sales in brick and mortar stores) still exceed online sales by a 6 to 1 margin [digitalcommerce360.com]. While Amazon has captured a large fraction of online sales, it's still a small portion of all sales. Walmart alone has more than 3x the sales of Amazon [stores.org]. We still have probably 2-3 more decades to go before eCommerce matures and peaks. Plenty of time for someone to dethrone Amazon.

    • Amazon's market power are overblown, despite the company capturing 52.4 percent of all online spending in the U.S. this year

      Now say it again without laughing.

      Hmm, a quick check shows that online retail amounts to less than 10% of all retail. Which means that Amazon may amount to as much as 5% of all retail. I fail to see the problem, what with Walmart still amounting to close to 7% of all retail sales by itself...

    • Re: (Score:3)

      by Tablizer ( 95088 )

      If they are not a monopoly, they are certainly pounding on the door of Monopoly Mansion. 2018 top-5 ecommerce rankings:

      Amazon: 48%
      Ebay: 7.2%
      Walmart: 4.0%
      Apple: 3.9%
      Home Depot: 1.6%

      Source: https://techcrunch.com/2018/11... [techcrunch.com]

      • Re: (Score:1)

        by lgw ( 121541 )

        eCommerce is a tiny share of retail, is the thing. Disney makes 100% of Marvel movies, but that hardly makes them a monopoly.

    • What they're saying is that Amazon's ability to leverage the their dominant position as a marketplace to dominate other areas, like goods (clothing, batteries...), is not that great.

      While perhaps true, it is definitely something to keep looking at, as we would any other semi monopoly situation (railroads, telecom....)

      How much do they highlight their product?
      How much preferential treatment do they give their product?
      Are they operating anything at a loss?

      I'm as a guilty as the next person. I used to buy Enelo

  • This reminded me when Walmart started aggressive pushing it's on branding and preferentially placing it's own products. Recall it was not so long ago that Walmart had an obscene market share in retail. While it did damage the major brands, they responded, survived and grew.

    People have a lot of inertia when it comes to how they spend their money. I buy amazon batteries, but that is about it. How wants Amazaon shampoo or whatever.

    • Who wants Amazon shampoo or whatever.

      No one should buy any shampoo on Amazon. They are known to be rife with fakes on health and beauty type products.

  • What I mean is retail stores are carrying less and less items I'm interested in purchasing. I would like to purchase direct from a company but many either don't sell direct or if they do their purchasing site is difficult to use (you need a specific type of browser and a specific type of OS, or get some kind of scripting error message). Amazon makes it easy (I've never run into problems, only the product i.e. discontinued item or used items don't look appealing), probably too easy (can easily go into debt).

  • Maybe Amazon doesn't create it's own brand for a product until that product hits a certain threshold of popularity or sales performance. Remember, Amazon knows what is selling well on their site and what isn't. Of course they would prefer to make off label versions of popular products that sell well instead of versions of products that don't. And, since they ARE the middleman, they don't have to worry about giving someone else a cut, which allows them to have reduced costs compared to other sellers, allo

  • I’d like to know more (Score:4, Informative)

    by 93 Escort Wagon ( 326346 ) on Monday March 18, 2019 @03:05PM (#58293772)

    From TFA:

    ”Kaziukenas (note: founder and owner of Marketplace Pulse) is scheduled to present his findings Monday at the Prosper Show, an annual meeting of 1,500 Amazon vendors, merchants and consultants in Las Vegas.”

    Hmm... I’d like to know more regarding who suggested and/or paid for this study. There’s quite a “pay no attention to the man behind the curtain!” vibe to it.

  • I have no problem with people making competing products but I do have a problem with how Amazon goes about it. The fact that their resulting products aren't highly successful does not excuse their tactics. I'm certain the companies which have been driven out of business would agree.

    You might as well argue that attempted murder is no big deal because nobody died.

  • They should focus their energies on in-house smarthome products. It's annoying that most of the Alexa-integrated products out there are 3rd party, and reading the reviews the reliability is suspect (or they're more tuned for Google, or worse owned by them as is the case with Nest). Amazon makes plugs and the echo itself, but that seems to be about it.

  • People don't tend to buy store/no-name brand. They always seem to be a hit or miss proposition with poor quality control.

    • Depends on the store brand. Yes, some store-brand stuff is noticeably inferior, but I'll put most of our local grocery chain's stuff up against name-brand any day of the week.

  • Amazon is one of the most powerful Companies in the market. They will use those billions of dollars to crush and fake any information they need to. This will allow them to continue to get their Huge tax incentives and be able to fool people dumb enough to trust every single study out there to keep their business in the multi million to billion dollar range. Simply don't trust every study released until you see at least multiple studies about the same thing from multiple groups and some groups that are non

  • Amazon's success has been limited to basic products like batteries where shoppers are inclined to seek generic alternatives to save money, the study found.

    Oh, so they can only dominate in basic stuff that everybody needs. Well, what a yawner then ...

    • Oh, so they can only dominate in basic stuff that everybody needs. Well, what a yawner then ...

      And they can only prey on the stupid. Cheap batteries are almost never a good idea. They are almost always crap. You don't have to buy the most expensive ones, but you should almost never buy the cheapest ones either. (I'm sure there are limited exceptions. I'm considering some pretty cheap storage AGMs, but they aren't vastly cheaper, and they are well-reviewed.)

  • Sturgeon's Law at work. (Score:4, Insightful)

    by Mal-2 ( 675116 ) on Monday March 18, 2019 @04:06PM (#58294194) Homepage Journal

    90% of everything is crap, even when it's pushed by Amazon. The difference is that they have enough resources to keep trying until they get that 1-in-10 success and then smash a market with it.

  • And the biggest thing missing from this entire study is sales data. How many units of Amazon owned brands have been sold? Who cares how often someone searched for an Amazon product or what the average review score is. How many units did Amazon and the companies selling the same product sale?
  • When people are buying, they're measuring their trust of the product vs. the price they're paying. For cheap commodities like batteries and cables, the price is really low, and people don't need to place high trust into the products. As price rises for clothing and furniture, etc., people need to trust the brand to not be crap due to the relative investment they're making. If a $0.50 battery lasts only 85% as the $0.57 battery, who really cares or measures it, but for a $50 sweater or a $400 sofa, it sho

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