Amazon's cost-cutting efforts now include removing some of the company's private label brands. In an official statement, Amazon Private Brands Vice President Matt Taddy shared why the e-commerce giant decided to do this.
Amazon to Remove In-House Private Label Brands
According to CNBC's latest report, Amazon is scraping some of its in-house private-label brands. For those who are not aware of this, the giant retailer also offers goods produce in-house. Just like other store brands, Amazon offers its private labels together with products from other companies.
For the past few years, Amazon was able to expand these in-house private-label products. These include Rivet furniture, Presto! paper towels, Amazon Basics batteries, and Goodthreads apparel.
However, the e-commerce company needs to eliminate them to reduce its costs. Matt Taddy explained that they need to do this since some of the firm's private-label brands were not able to resonate with consumers.
But, there are also other Amazon private label products that attract lots of buyers.
"We always make decisions based on what our customers want, and we've learned that customers seek out our biggest brands," said Taddy.
"Amazon Basics and Amazon Essentials - for great value with high-quality products at great price points," added the Amazon Private Brands VP.
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What Private Label Brands Are Affected?
Amazon didn't confirm the private label brands it plans to remove. But, Yahoo Finance reported that the retailer will eliminate 27 of its 30 in-house label clothing divisions.
This will leave only the Amazon Collection, Amazon Aware, and Amazon Essentials. Some sources also claim that the e-commerce giant will scrape its private-label furniture.
If this is true, then the Rivet and Stone & Beams brands will no longer be offered to consumers.
Matt Taddy said that if certain products are not resonating with consumers, they will remove those items and find other opportunities to better meet their demands.
Aside from being part of the company's wider cost-cutting efforts, analysts also said that the private label brands removal could be its preparation for the possible antitrust lawsuit from FCC (Federal Trade Commission).
If you want to learn more details about the plan of Amazon to scrape some of its private label brands, you can click this link.
