AmazonBasics is pretty much like any other private label brand item that you will find sitting alongside other brand items in any store. It is Amazon’s private label brand on the Amazon marketplace. AmazonBasics items are sold alongside many similar items on offer from third-party sellers. This poses a problem for sellers because usually, the price of Amazon’s offer is significantly lower, and these products get priority placement on the marketplace.
AmazonBasics is pretty much like any other private label brand item that you will find sitting alongside other brand items in any store. It is Amazon’s private label brand on the Amazon marketplace. AmazonBasics items are sold alongside many similar items on offer from third-party sellers. This poses a problem for sellers because usually, the price of Amazon’s offer is significantly lower, and these products get priority placement on the marketplace.
What is AmazonBasics?
AmazonBasics offers a slew of “everyday items…at a value.” Most of these items are, well, basic items that people use on a daily basis. They are items that most consumers will buy at least once, and most of the time, will buy again. With these basics, Amazon customers don’t expect fancy versions but reliable ones that don’t come with a high tag price.
In 2009, Amazon decided to offer their own private label range, just like other mega stores – Target and Walmart come to mind. AmazonBasics launched with small, simple, mostly inexpensive products that the retail giant knew would be profitable. Some of the first items were electronics, batteries, cables, and the like. The idea was that they would fly off the virtual shelves because most consumers don’t have a brand preference for such items.
Today, AmazonBasics boasts thousands of products in more than a few categories, including Audio, Camera accessories, Travel, Outdoor, Batteries, Office accessories, Cables, Electronics, Sports, Kitchen and dining, Bedding, Patio, Pet supplies, and Computer accessories.
AmazonBasics versus Amazon Sellers
AmazonBasics, just like any other superstore private label, poses a real threat to third-party sellers. Below are the main reasons for the growing concern.
Big Data
Private labeling is already a very profitable trend, particularly online. But using the data that they collect on the marketplace every day, Amazon can quickly spot and add the most profitable offerings and drop those that are losing ground. Because they can so easily anticipate demand, AmazonBasics is currently one of the most popular private labels.
Basically, when the data – most of which is collected from third-party sales – shows that a certain product is selling very well, they look into creating an AmazonBasics version of it. If they do, and you sell that product, what you have gained for all your hard work sourcing a good product and building up sales for it is a huge competitor. It almost means that sellers shouldn’t aim to be too successful or they’ll get cut out by Amazon.
Manufacturing
Amazon has built up product research infrastructure and manufacturing networks to get the most profitable products under their brand quickly and cheaply. They then sell these items at lower prices than the leading sellers on the marketplace so that they can win over market share almost immediately. It’s a complete displacement strategy that leaves nothing to chance.
Amazon Choice
Sellers are constantly competing with each other to grab higher rankings and positions for better product visibility. Amazon Choice is one of the badges that shows customers which products are top picks. It also boosts product search ranking. On Alexa, the Amazon Choice product gets shown first. It certainly looks like a great badge to get.
However, this ranking is likely to attract AmazonBasics, and if they come into play, Amazon will prioritize their product for the Amazon Choice badge. Again, you work hard and they steal the limelight. Moving forward, the only way you’re likely to make a sale is if customers ask for your brand specifically.
Secret Brands
It can be difficult to keep an eye on Amazon products because more often than not, they are sold under other brand names. And most of these brands are indistinguishable from other stores. You may think that you’re competing with another seller, but in reality, you’re up against Amazon itself. This means that you stand to suffer greater loses by continuing to push your offering. If you knew straight away that it was an Amazon brand, you wouldn’t likely risk cutting into your profit margins because you’d already know that you had little chance of beating them out.
Staying in the Game
Despite the heavy burden that competing against Amazon places on sellers, there are ways to remain profitable.
Product Choice
Instead of competing with Amazon, choose to sell other types of items. It may be more time-consuming because you have to research and manage a greater number of products. It’s still better in the end, however, to have unique products on offer as opposed to basic items that Amazon will likely take an interest in. Your audience might get significantly smaller, but you are more likely to succeed targeting niches that Amazon couldn’t be bothered with.
Value
Although AmazonBasics is supposedly about great quality for low prices, their basic items aren’t always the best buys. You can offer alternatives to these items that are more durable, have additional features, etc., and win back a slice of the pie. Not everyone wants the cheapest or simplest option.
You can also bundle your items for discounts or run other types of promotions to provide greater value and move inventory. Before you offer random stuff, however, make sure that you know your customers’ pain points and go from there.
Listing Optimization
Make sure that your product listings follow Amazon guidelines as closely as possible. You will need every additional point you can earn to reduce penalties and gain advantages like greater visibility.
Brand Loyalty
Amazon prides itself in offering the best customer service. The truth is, however, that you can do it better. Amazon has gotten so big that they have difficulty connecting with each of their millions of customers on a more personal level. For you, this approach remains sustainable.
Focus on valuing each individual customer. They will appreciate the personal touch and be more likely to prefer transacting with you, as long as you can provide the same guarantees that Amazon does. In short, match Amazon on shipping, returns, refunds, etc., then add some icing on the cake. This is how you can stand out and build strong trust in your brand for repeat purchases and organic referrals.
Once you have that rapport going, customers will remember your brand and search for your products specifically. And you can teach customers to request your brand on Alexa, too, so they don’t end up buying AmazonBasics because your item isn’t being shown.
Final Thoughts
AmazonBasics is not the end of profitability for third-party sellers. It simply requires an adjustment in selling strategy. A suave approach is called for. Don’t try to take the bull by the horns – instead, look at what AmazonBasics is doing and work around that. You know that there’s a market there, and you can certainly still make good profits by choosing your battles wisely.
