The Wall Street Journal has revealed in an exclusive report that e-commerce giant Amazon has been reducing the number of items it sells under its own brands due to poor sales in recent months. The company is also facing intense regulatory pressure over its private label business, which is accused of using sales data from other brands on the Amazon platform to hijack their customer base with an inferior copy of their products.
In an article titled “Amazon Has Been Slashing Private-Label Selection Amid Weak Sales” the Wall Street Journal reports that Amazon has begun to drastically reduce the number of items it sells under its own brands and has considered leaving the private-label business entirely due to poor sales and increased regulatory pressure.
The WSJ writes:
Amazon’s private-label business, with 243,000 products across 45 different house brands as of 2020, has been a source of controversy because it competes with other sellers on its platform. The decision to scale back the house brands resulted partly from disappointing sales for many of the items, the people said. It also came as the retail-and-technology giant has faced criticism in recent years from lawmakers and others that it sometimes gives advantages to its own brands at the expense of products sold by other vendors on its site.
Over the past six months, Amazon leadership instructed its private-label team to slash the list of items and not to reorder many of them, the people said. Executives discussed reducing its private-label assortment in the U.S. by well over half, one of them said.
The move was initiated after a review of the business by Dave Clark, a longtime Amazon executive who took over as head of its global consumer business in January 2021, the people said. Mr. Clark left the company last month. As a result of that review, Mr. Clark pushed the team to focus on bestselling commodity goods, along the lines of Target Corp.’s “Up & Up” or Walmart Inc.’s “Great Value” brands, rather than offer the extensive range of items Amazon currently does, the people said.
The WSJ previously reported on how Amazon employees used data from the platform to develop Amazon-branded products that would compete with other sellers on the platform. Many brands were angered by products that Amazon developed for its own labels that were very similar to their items, claiming that the tech giant was copying their designs and using sales data from the platform to kill their business.
At the time, Amazon said it was opening an internal investigation into the issue and how its private-label employees utilized seller data. Speaking to Congress, then-CEO Jeff Bezos said “I can’t guarantee you that policy has never been violated.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan
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