Amazon is removing certain of its in-house brands as part of a cost-cutting initiative across the organization.The corporation sells its own products, as well as those from other vendors and sellers, on its wide-reaching online retail store.These private label commodities have drawn the attention of antitrust watchdogs.
Amazon has confirmed to CNBC that it is cutting back on its private label brands as part of a cost-control initiative. These in-house products, such as Goodthreads apparel, Rivet furniture and Presto! paper towels, have been expanding over the years and now number over 150,000 across 45 brands. According to The Wall Street Journal, Amazon plans to keep fewer than 20 house brands, with apparel and furniture being among those that will be eliminated.Matt Taddy, Vice President of Amazon Private Brands, said in a statement that the company is making these decisions based on what customers are looking for. He continued, “Customers seek out our biggest brands – like Amazon Basics and Amazon Essentials – for great value with high quality products at great price points.”The Journal has reported that the cost-cutting efforts are in anticipation of a possible antitrust lawsuit from the Federal Trade Commission, as well as the broader cost-control initiatives being lead by Amazon CEO Andy Jassy to account for economic downturns and slowing revenue growth.In addition to the layoffs of 27,000 employees, Amazon has been the focus of antitrust probes regarding alleged use of merchant data to develop competing products and squeezing third-party sellers out of their marketplace. These issues were raised during the 16-month House Antitrust Subcommittee investigation into competitive practices at Amazon and other Big Tech companies. Amazon founder Jeff Bezos addressed the matter, saying, “We have a policy against using seller-specific data to aid our private label business, but I can't guarantee you that that policy has never been violated.” Amazon has asserted that private label sales represent less than 1% of total retail sales.
Amazon has confirmed to CNBC that it is reducing its private label brands to rein in costs. These in-house products, ranging from apparel and furniture to batteries and paper towels, have been steadily increasing in number to over 150,000 across 45 brands, but Amazon now intends to keep fewer than 20. Matt Taddy, Vice President of Amazon Private Brands, said in a statement that customer satisfaction is the priority, noting that customers seek out its largest brands for great value.The Wall Street Journal has reported that this move is in response to a potential lawsuit from the Federal Trade Commission, as well as part of Amazon CEO Andy Jassy's efforts to reduce costs due to economic downturns and slowing revenue growth. This includes the layoffs of 27,000 employees.Third-party sellers have also raised concerns about Amazon's use of merchant data to develop competing products and the exclusion of third-party sellers from its marketplace, both of which were addressed during the 16-month investigation by the House Antitrust Subcommittee. Although Amazon has maintained that private label sales make up less than 1% of its total retail sales, the FTC is reportedly preparing to file a lawsuit against Amazon in the near future.
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