AmazonBasics is Amazon’s private label and exclusive products that are sold exclusively on Amazon. The company launched the brand in 2009 as an affordable private label dedicated to small electronics accessories such as cables and plugs. The positive reception towards these basic products encouraged Amazon to expand the AmazonBasics line to include a broader range of products from different categories.
This article will cover the fundamentals of AmazonBasics, why it poses a challenge to conventional third-party sellers, and how sellers can benefit from the program.
Part 1: What Is AmazonBasics? Is It Official?
AmazonBasics is an official private label offered by Amazon, similar to private labels by other major retailers such as Walmart and Target. AmazonBasics aims to provide a variety of everyday items at an affordable price.
AmazonBasics products may seem basic for consumers, but they are reasonably priced, dependable, and repurchased daily. Products that carry the AmazonBasics label aren't gimmicky and are popular among consumers looking as the products deliver consistency and value.
Initially, the brand offered basic and inexpensive products such as batteries, electronics, and cables. The company was confident these products would be profitable because customers generally don't have brand preferences for such items.
Furthermore, AmazonBasics later expanded in product lineup across other categories, such as audio, camera accessories, travel gear, office supplies, sports gear, pet supplies, kitchen and dining, and computer accessories.
AmazonBasics products are sold alongside similar items from third-party sellers on the Amazon website. This creates a challenge for sellers because Amazon's prices are often lower for the same product, giving priority placement to Amazon's products.
Part 2: Why Is AmazonBasics A Threat To Sellers?
Third-party sellers are becoming increasingly worried about the threat posed by AmazonBasics. There are several reasons behind this. Let's discuss it.
Big Data
Private labeling is a profitable proposition, especially online. And when it comes to leveraging consumer data for profit—Amazon is king. Amazon boasts one of the largest data centers in the world, which effectively allows them to collect and analyze data on customers’ purchase history.
Amazon analyzes this data, obtained mainly from third-party sales, to identify popular products and then attempts to develop an AmazonBasics version of that product.
Moreover, Amazon leverages this data to add profitable offerings and remove unprofitable ones quickly.
This gives Amazon an edge over third-party sellers as the company can offer its products at lower prices while still being profitable.
Manufacturing
Amazon has established systems to research and manufacture products efficiently to launch affordable products under its label. Additionally, the company sells these products at lower prices than the other top-selling brands on the marketplace. This strategy enables the company to gain a larger market share quickly.
Amazon's Choice Badge
Sellers on Amazon are consistently outbidding each other to gain higher search rankings and increase product visibility. The Amazon Choice badge highlights top-selling and top-rated products to consumers. It also helps improve search rankings, giving them an advantage over competitors. Amazon Choice products are also prioritized on Alexa.
This is why this badge is highly sought-after by sellers—said that there is a possibility that products from AmazonBasics will have a better ranking on search results. When it happens, their products will be given priority for the Amazon Choice badge. This makes third-party sellers’ products less competitive.
Secret Brands
It's a challenge to monitor products on Amazon products as they are usually sold under various brands. Most of these products look identical compared to other retailers. This might make you believe you're competing with a rival seller, but actually, you're pitting against Amazon.
This can cause you to incur huge losses on your promotional campaigns. If you knew it was an Amazon brand from the start, you would be less inclined to jeopardize your earnings because you'd acknowledge that defeating them is nearly impossible.
Part 3: How To Take Advantage Of AmazonBasics As An Amazon Seller?
Using certain strategies, sellers can still profit despite the tough competition from AmazonBasics products. These are as follows:
Focus on Niche Products
Instead of competing with Amazon, avoid it altogether and opt to sell different products. Sure, this strategy may need more effort to research and manage a larger inventory, but offering unique products is way more profitable and effective than competing with AmazonBasics. Your customers may be smaller, but targeting niches that Amazon doesn't focus on is a surefire way to increase your success in the marketplace.
Give Great Value
AmazonBasics has always concentrated on making decent quality products at affordable prices. However, it doesn't mean that affordable is always good. There are products in the marketplace that offer higher quality at comparable prices. To overtake AmazonBasics' market share, promote alternative products that are more durable and provide extra features. Customers are more than happy to pay more for better quality or additional features. Furthermore, create promotional packages or offer discounts to entice customers and increase sales.
Listing Optimization
It is essential to adhere to Amazon's guidelines when creating product listings. Doing so may help you earn more points, reduce penalties, and increase the visibility of your products.
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Brand Loyalty
While Amazon is known for its customer service, there is always room for improvement. Due to its size, Amazon struggles to connect with individual customers on a personal level. Third-party sellers can provide personalized services. This could be the difference maker for customers looking for more customized shopping experiences.
To keep customers coming back, it's important to establish trust and loyalty. One way to do this is by adding a personal touch that distinguishes you from Amazon. However, it's crucial to match Amazon's standards for returns, shipping, and refunds. Doing this can strengthen your relationship with customers and encourage them to return and recommend your products to others.
Part 4: Summary
AmazonBasics is a threat to independent sellers due to its data-driven approach to identifying profitable items, efficient manufacturing processes, and ability to prioritize products for the Amazon Choice badge. As such, sellers need to remain innovative and competitive to stay ahead of the game. This can be done by offering unique products, providing better value than AmazonBasics, optimizing product listings, and building customer loyalty through personalized experiences. With this knowledge, sellers can use AmazonBasics to remain profitable amidst stiff competition.
FAQ
Q: What is AmazonBasics?
A: AmazonBasics is a collection of products manufactured by Amazon. The products include consumer electronics, apparel, and home and office supplies.
Q: Are AmazonBasics products made in China?
A: Most AmazonBasics electronics are manufactured in Asia. Suppliers working with AmazonBasics revealed that only about 10% are US-based, while almost 50% of the products are sourced from Asia.
Q: How many AmazonBasics products are there?
A: It is estimated that there are over 2,000 AmazonBasics products on Amazon.
Q: Are Amazon products safe?
A: Generally speaking, it is safe to use AmazonBasics products. The company follows industry-standard security measures for handling sensitive personal information on its website and its products. Amazon also has strict security protocols for shipping items purchased to help ensure the safety of their customers.
