Amazon Plunges Into Private Label Business

Following in the footsteps of its brick-and-mortar brethren, Amazon has quietly moved into the private label business, developing brands for patio furniture, tools, linens and kitchen appliances. But while storefront retailers often herald the advent of their in-house brands, giving them favorable visibility within stores, Amazon has launched its handful of brands without much fanfare.

Channel Advisor CEO Scot Wingo blogged of his discovery of Amazon private label Pinzon, specializing in “bath towels, sheet sets, furniture, and kitchen gadgets,” earlier this month. That post illicited a handful of responses noting other Amazon private labels that had launched very much under the radar, like Strathwood, a maker of outdoor furniture, and Denali, which offers various bench and power tools.

Pinzon screen

Private label brands can be an excellent growth avenue for retailers, as margins tend to be better for private labels than other products. The fact that a pioneer of online retailing and maker of such forward-looking products as the Kindle is dabbling in private label linens and patio furniture speaks well of the dexterity of Amazon’s leadership. The company can make money selling e-readers, but it can also make money selling miter saws. The move into private labels means Amazon is competing with its obvious online rivals like Ebay, but it’s also staying competitive with storefront rivals like Target or Kohl’s. More importantly, it means I can get Super Saver Shipping on that his and hers bath towel set I’ve been eyeing.

[via ZDNet, Amazon Strategies]

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