Amazon has 118+ private label brands, some that carry the Amazon name and others cleverly disguised without it. And it’s been accused of using its data prowess to make nearly identical versions of bestselling brand-name items, like Peak Design’s Everyday Sling Bag. Amazon says it’s continuing to invest in its popular brands, despite rumors it’s scaling back on private-label to appease regulators. Amazon may be pushing the boundaries of what’s acceptable in private labeling, there’s nothing illegal about copying brand-name products. It’s a business practice that, in some capacity, is widely used by most major retailers.
Avenue7Media’s CEO, Jason Boyce weighs in on this CNBC video that breaks down what a private label is and how Amazon has managed to take advantage of small businesses selling on their platform to introduce private label brands.
The video provides excellent historical background along with reasons why Amazon’s private label business is very different from other large retailers’ private labels from the past or present.
In my estimation, Senate bill S. 2992, The American Innovation & Choice Online Act, would significantly prevent bad behavior from Amazon and others. I’ve personally read the current iteration of the bill, and when passed will address many issues outlined in this video, including;
1) Open competition so other companies can offer Prime FBA services, forcing Amazon to compete for your FBA-Prime business. Amazon Sellers have seen a 30% increase in FBA fees in the last few years, and more competitors would make them think twice about such increases.
2) Block self-preferencing. I shared the estimated monthly revenue of four Amazon private-label brands in the “Featured from our Brands” number one placement on search with Katie for this video. In every instance, the Amazon-branded product produced 4-5 times the revenue as the next five sellers’ listings combined. All for roughly 30-75% lower retail prices.
3) Block Amazon retribution. When I speak to Sellers, their biggest fear regarding speaking out against Amazon’s practices is fear of retribution. This bill would protect Sellers and allow them to speak freely and without fear.
4) Block Amazon from using Seller Data to knock off their products. This bill would prevent Amazon from copying and producing knock-offs of Seller products. Peter Dering’s story in the video is an excellent example of what Amazon continues to do to innovative Seller products.
5) Impose severe penalties and injunctions on Amazon for bad behavior. For 30 years, Amazon has done whatever it wants without consequences. This bill imposes much-needed protections and guard rails for small businesses and Sellers because, without consequences, Amazon will not change.
Please let me know if you’d like to learn more about how you can get involved to help get this important bill passed. Reaching out to your state and federal representatives is a good starting point. They need to speak to the businesses most affected and protected by this bill rather than the $100 billion lobbyists Amazon and BigTech paid to try to water it down.