Digiday+ Member Article

I recently had coffee with an agency that works with a retailer that sells on Amazon. While there are many, many issues with how Amazon works with brands, this one caught my attention. “When you work with Amazon, it is a good thing. But it’s also a bad thing. They’ll milk you out of info about your business and category. Then, they’ll go and build a private-label brand on their own and maybe even use your manufacturing facilities to make it happen.”

Amazon has a not-so-secret weapon in its arsenal in its top-secret private-label business. Recent estimates by SunTrust Robinson Humphrey analysts found that Amazon’s private-label brands — which include its AmazonBasics house brands as well as lingerie (Arabella), tools (Denali) and a host of women’s clothing labels — brought in $2.5 billion in sales for the company in 2016. The analyst note also predicted that sales will reach up to $20 billion by 2022.

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