What to do When Amazon Creates a Private Label Version of Your Product
As of Q1 2020, Amazon owns 135 private-label brands and has more than 330 Amazon-exclusive brands. The growth of Amazon’s private-label business has increased the already-stiff competition on the channel. As a result, more brands have found themselves competing with not only their competitors but with one of Amazon's private labels as well.
We understand it can be daunting when a version of your product is now in the mix of Amazon's own products. Below we share tips for brands to consider when this occurs.
Evaluate Your Product’s Features and Capabilities
When Amazon releases a private-label version of your product, it’s no reason to panic. Brands have the power to position products for success against private-labels with proper support.
To do this, we recommend performing an in-depth competitive analysis between Amazon’s product and your own. Start by listing each product’s features side by side. Then, identify where your product either falls short or has the upper hand.
When you're finished, there will be findings worth addressing through content and creative assets. For example, the copy could answer common questions and concerns. Or, your image library could call out differentiating features and capabilities.
Compare Pricing and Make an Informed Decision
Once you know where your product stands against Amazon’s, the next factor to consider is pricing. Amazon’s private-label products tend to be less expensive than the competition. For this reason, take a step back to see whether price adjustments are necessary or possible.
To gather a baseline price range, it helps to research similar products within a category. And, keep in mind, many shoppers are averse to purchasing a cheaper, private-label product if they feel it compromises quality.
If your brand isn't in the position to match or beat Amazon’s price point, tap into other facets of your presence. Shoppers value the experience they have when interacting with your brand. And the power of product reviews shouldn't be underestimated. The more positive reviews a product has increased the likelihood a shopper chooses it over Amazon's version.
Proactively Manage Your Catalog and Take Content and Creative Assets Up a Notch
Shoppers are looking for a positive experience on the channel. Brands must capitalize on the opportunity to appeal to the customer and compete against Amazon.
First, we recommend comparing your brand’s product detail page to Amazon’s private-label version by asking yourself the following questions:
- Is my product’s title clear, concise, and does it include top-tier keywords?
- Are the title and main product image positioned to attract mobile shoppers from search result pages?
- Does my product have five bullet points that include second-tier keywords?
- Does my product’s description use second and third-tier keywords? Does it expand on the bullet points?
- Does my product image library include a variety of image types?
- Can my product’s image library include video or 360-degree image assets?
- Am I taking advantage of the opportunity to leverage A+ content?
- Does my brand have an Amazon Store for shoppers to land on to find my product and learn more?
Revisiting your product’s organic optimizations is crucial, even when it’s not up against Amazon’s products. And monitoring your catalog and implementing a powerful keyword strategy is equally necessary.
Use a Healthy Mix of Advertising Options to Establish Dominance
We always recommend both search (Amazon Advertising) and programmatic (Amazon DSP) advertising to our clients. Search advertising propels Amazon’s flywheel and increases awareness and discoverability. Amazon Advertising can also position products within search results and on product detail pages of similar products. Investing in making your product more visible is key when competing with the channel’s own product.
On the other hand, programmatic advertising increases traffic and re-engages shoppers. Amazon DSP also helps products stand out among the competition. Savvy brands also use Amazon DSP to more specifically target and conquest shoppers. For example, brands can serve DSP ads to their own audience, as well as their competitors' audience.
When your brand is competing with Amazon, supporting your products with advertising is a significant driver of success. Otherwise, your products will have to rely on organic optimizations alone.
Marketplace Strategy Perspective
Depending on your category, it’s not unlikely Amazon will create a private label version of your product if they haven’t already. But it’s not always a reason for concern. Amazon has endless knowledge about your customers, and it uses this data to identify which items to pursue private-label. But we have found in most cases Amazon doesn’t go the extra mile to add unique features to the product, nor do they enhance its detail page, or drive sales through advertising. Because of this, brands have a unique opportunity. Knowledge of the customer and the ability to focus on the experience can give your brand an edge over Amazon.
In some situations, Amazon creating a private label of your product can actually be a benefit. Amazon’s private labels can drive added traffic to your product’s category. So, a well-rounded strategy will help your product stand out amongst the increased traffic and convert shoppers.
It can be unnerving when Amazon releases a private-label version of your brand’s own product. But, brands that apply a holistic strategy to their presence can compete with Amazon’s private labels and succeed on the channel.
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