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

Posted by msmash on 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.

55 of 103 comments (clear)

  1. Film at 11 by syn3rg · · Score: 1

    In other news: dog bites man.

    How is this news? It is the normal way of things. Most companies are duds, few are disruptors.

    --
    The contents of this message have been doubly encrypted by ROT13
    1. Re:Film at 11 by humptheElephant · · Score: 1

      I wish I could say the same for one of my purchases. I bought several cards of their branded hearing aid batteries and most of them were duds. I would get perhaps 1 or 2 good ones out of 10- 12 batteries. However, many other of my puchases of their branded items were fine and a real bargan.

  2. I like them so far by jdavidb · · Score: 1

    I've enjoyed AmazonBasics mice, keyboards, and USB cables. Can't speak for the rest of their line.

    --
    Secession is the right of all sentient beings.
    1. Re:I like them so far by jellomizer · · Score: 3, Insightful

      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.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    2. Re:I like them so far by darkain · · Score: 1

      As well as Amazon Basics batteries. Their normal Alkaline batteries are cheap and work great. They released a line of rechargable batteries that are on-par quality wise with high-end Eneloop batteries but for half the cost. These have been a huge deal in the photography world for people that need faster recycle time on portable strobes.

    3. Re:I like them so far by ShanghaiBill · · Score: 2

      Another thing I like about Amazon Basics is the minimalist packaging.

      I prefer to pay for the product, not lots of cardboard and blister-packs that will go to the landfill.

    4. Re:I like them so far by No+Longer+an+AC · · Score: 1

      You sound like either a rube or a shill for Energizer or Duracell. Both those brands put a lot of effort into convincing us that they are better, but they're also more expensive.

      I haven't seen any studies on Amazon Basics batteries, but they seem to be working for me. I do remember older studies which showed that Energizer and Duracell weren't really worth it if you considered cost per how long they last.

    5. Re:I like them so far by No+Longer+an+AC · · Score: 3, Funny

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

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

    6. Re:I like them so far by aaarrrgggh · · Score: 1

      Duracell batteries have killed two multimeters, two wireless keyboards, one wireless track pad, a Leica Disto, and countless flashlights for me in the past ~3 years, total value around $1k. My wife now throws out all batteries when storing something because it is so annoying.

      Energizer hasn’t failed on me, nor have Amazon Basics. Energizer seems to last a little longer, but not a huge delta

    7. Re:I like them so far by reboot246 · · Score: 1

      Yeah, I've had pretty good luck buying Amazon Basics. One day I may find a bad product, but that day hasn't come yet.
      The Amazon Basics shower curtain I bought a year ago is one of the best I've ever owned.

    8. Re:I like them so far by Thelasko · · Score: 1

      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.

      They've got you covered either way.

      --
      One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
    9. Re:I like them so far by No+Longer+an+AC · · Score: 1

      If you mean it killed them by leaking and corrosion after being stored too long, I just pulled an Energizer out of something that had been sitting idle for between 1 and 2 years. It didn't kill it, but it wasn't good. It was only one of the 4 batteries that did that though.

    10. Re:I like them so far by Cederic · · Score: 1

      Successful man has a mistress. Lets check the surprise-o-meter on that one:

      Ding. Ding. Ding. Squub.

      Nope, no surprise at all.

      Come back tomorrow for our in-depth review of 'Who is the Father?' a film exploring paternity fraud.

      It's hard to take Amazon seriously.

      Tell their competitors that, because they're taking Amazon very seriously. Don't bother to tell the customers, they've already made their views very clear.

  3. Who paid for this study? by Anonymous Coward · · Score: 1

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

    1. Re:Who paid for this study? by fluffernutter · · Score: 2

      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.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    2. Re:Who paid for this study? by alvinrod · · Score: 2

      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 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 point out, if for no other reason than to have something to point to when the politicians hound them.

    3. Re:Who paid for this study? by jellomizer · · Score: 1

      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 better, or sell my product of $30.00 where I may need to cut Quality or cut into my bottom line where I may no longer be profitable.
      Now the competitor has to do the same thing.
      This goes on until we are both selling utter garbage, or one of us goes out of business first. Once one is out of business it will take a long time to get your margins up to be profitable again.

      So while getting the cheaper product, the consumer looses out, because they are getting a crap product, and/or facing a market with soon less competition.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
  4. Isn't that the point? by Anonymous Coward · · Score: 1

    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"?

    1. Re:Isn't that the point? by jedidiah · · Score: 4, Insightful

      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.

      --
      A Pirate and a Puritan look the same on a balance sheet.
  5. Add-On items are garbage. by drinkypoo · · Score: 1

    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.

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    1. Re:Add-On items are garbage. by dublin · · Score: 1

      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 everything from Amazon. That's changed over the past few years - not only do we not buy ordinary things from Amazon anymore, but they used to get quite a bit of our Christmas gift spending, which was cut down to just a few books and another item or two this past year..

      Chinese Shit can be really expensive to those selling it when it destroys the most valuable thing any merchant can ever have - customer trust.

      --
      "The future's good and the present is nothing to sneeze at." - Roblimo's last ./ post
  6. Clothing is Where it's at. by TechyImmigrant · · Score: 1

    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 should use this sig to advertise my book ISBN-13 : 978-1501515132.
    1. Re:Clothing is Where it's at. by TechyImmigrant · · Score: 1

      Not sure where you got "wanting expensive clothes" from that. Do you always infer false things from things that say nothing of the sort? It may be a identifiable condition - like SlashdotMoronItis.

      --
      I should use this sig to advertise my book ISBN-13 : 978-1501515132.
    2. Re: Clothing is Where it's at. by Type44Q · · Score: 1

      He's obviously referring to non-Amazon clothes that are on his level (think Walmart, Dollar General, etc). Me, I have better things to spend my money on than clothing... but there's no reason to go around looking like a clown, either: I buy European designer shit at the only that matters: the thrift store.

    3. Re:Clothing is Where it's at. by LostMyAccount · · Score: 1

      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 persists.

      You would think clothing makers would sort out sales data and make fewer in extreme sizes that don't sell well. There must be some other explanation, like high demand for those sizes at full retail prices, although you would think people who wear those sizes would also figure out they're always available on clearance. Or maybe the marginally less material they use somehow averages out full price + clearance price to remain as profitable as more in-demand sizing.

  7. This puts my mind at rest. by Anonymous Coward · · Score: 1

    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

  8. Wow by WolfgangVL · · Score: 3, Insightful

    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.

    --
    You are being ripped off every second of every day, so that advertisers can help rip you off even more tomorrow.
    1. Re:Wow by 93+Escort+Wagon · · Score: 3, Insightful

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

      --
      #DeleteChrome
    2. Re:Wow by Solandri · · Score: 1

      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. 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. We still have probably 2-3 more decades to go before eCommerce matures and peaks. Plenty of time for someone to dethrone Amazon.

    3. Re:Wow by CrimsonAvenger · · Score: 1

      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...

      --

      "I do not agree with what you say, but I will defend to the death your right to say it"
    4. Re:Wow by Tablizer · · Score: 2

      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...

      --
      Table-ized A.I.
    5. Re:Wow by scamper_22 · · Score: 1

      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 Eneloops as my main batteries. This past purchase, i couldn't resist the Amazon Basics deal. It was nicely highlighted. How much does that take away from battery R&D from the companies dedicated to batteries? I have no idea. But I did it.

      It's pretty common for stores to have in house brands. That's nothing new. Even my grocery store has in house brands.But if it gets this large, monitoring is needed as with any semi monopoly system. It would be like if my grocery store (Loblaws) had most of the marketshare and they control shelf space and pump up their in house brands. That would make it really hard for new entrants to get to consumers.

      Doing this kind of thing is nothing new when you get this big, especially with network style semi monopolies. I don't know if we need to break them up, but some rules around ranking and preferential treatment should be there as in many other situations.

  9. Walmart by fermion · · Score: 1
    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.

    --
    "She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
    1. Re:Walmart by liquid_schwartz · · Score: 1

      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.

  10. Amazon makes it easy to buy stuff by k6mfw · · Score: 1

    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). So whether you love them or loathe them, Bezos figured out how to beat his competitors by making it easy to purchase. Like Musk did with Paypal and cornered the market for transferring money (I could never get online transactions of regular banks to work). Of course the downside with Amazon and Paypal is if something goes wrong (bad product, lost transaction) then you are stuck with the product or lost the transaction (fortunately I've been lucky so far).

    --
    mfwright@batnet.com
  11. Middleman into salesman by Nidi62 · · Score: 1

    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, allowing them to price their products lower. Most sellers would love to cut out the middleman. In this case, the middleman is simply cutting out the seller.

    --
    The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
  12. Cables seem generally good by SuperKendall · · Score: 1

    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.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Cables seem generally good by lgw · · Score: 2

      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.

      --
      Socialism: a lie told by totalitarians and believed by fools.
  13. I’d like to know more by 93+Escort+Wagon · · Score: 3, Informative

    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.

    --
    #DeleteChrome
  14. But they still use anti-competitive methods. by Gravis+Zero · · Score: 1

    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.

    --
    Anons need not reply. Questions end with a question mark.
  15. How about more official Alexa products by PrimaryConsult · · Score: 1

    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.

    1. Re:How about more official Alexa products by EkriirkE · · Score: 1

      Why pay for r&d when the public will do it for free?

      --
      from 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
      to 45 2F 6E 40 3C DF 10 71 4E 41 DF AA 25 7D 31 3F
  16. In other news by Shotgun · · Score: 1

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

    --
    Aah, change is good. -- Rafiki
    Yeah, but it ain't easy. -- Simba
    1. Re:In other news by NormalVisual · · Score: 1

      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.

      --
      Please stand clear of the doors, por favor mantenganse alejado de las puertas
  17. Purley a Lie. by Genusis · · Score: 2

    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 profit or have a neutral aspect. where they pinpoint both the good and the bad equally.

  18. oh by cascadingstylesheet · · Score: 1

    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 ...

    1. Re:oh by drinkypoo · · Score: 1

      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.)

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  19. Sturgeon's Law at work. by Mal-2 · · Score: 3, Insightful

    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.

    --
    How is the Riemann zeta function like Trump rallies? Both have an endless number of trivial zeros.
  20. Stay away from "Amazon's Choice" Locks by schwit1 · · Score: 1

    https://www.youtube.com/watch?...
    https://www.youtube.com/watch?...

  21. Re:Reading is key. by TechyImmigrant · · Score: 1

    "superior" to all others. --> Judged by the criteria I stated.

    Nicer clothes aren't nicer when they aren't actually available in a size that fits.

    I could waste my time finding trousers from some name brand with a waist to fit, but then it would be only available in either too-long or too-short and I'd have to go and get them adjusted.

    The opinions of ACs don't alter the facts.

    --
    I should use this sig to advertise my book ISBN-13 : 978-1501515132.
  22. Re:Found the Amazon shill anyway... by No+Longer+an+AC · · Score: 1

    I'm not being played. I don't think Amazon Basics batteries are as good as the "premium" brands. I'm not even sure if they're as good as the other non-premium brands I've bought for years.

    There should be some objective way of measuring this. Dollars per hour of usage seems like a good metric.

    And I honestly don't know what the best value is. Can you point me to a source that would tell me?

  23. Re:Found the Amazon shill anyway... by tzanger · · Score: 1

    Unless you've got data to back up your claims you're talking out your ass and acting like a pompous jerk to boot.

    I've no issue with their HDMI and USB cables, but don't buy their 3D printer filament because the $2 I'd save isn't worth the potential hassles against the CCTree filament that I've had great success with.

    Everything is a value judgement. There's no need to act like you're some superior being because you *feel* they're rebranding subpar products to make people feel good.

  24. Re:Found the Amazon shill anyway... by ShanghaiBill · · Score: 1

    In fact there ARE empirical studies proving this, you're just not looking.

    Citation needed. Put up or shut up.

    I use Amazon Basics batteries, and they work fine.

    The reason they are cheaper than Duracell and Energizer is because you aren't paying for advertising and fancy packaging.

  25. No Sales Data by Aurien · · Score: 1

    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?

  26. Price vs Trust by Only+Time+Will+Tell · · Score: 1

    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 should perform to those levels, and you're more likely to go with a name brand in those instances.