Amazon will reportedly soon sell its own private-label groceries.
( Justin Sullivan | Getty Images )
Amazon is launching its own branded food by offering perishables such as nuts, spices, tea, coffee, cooking oil, baby food and vitamins, just to name a few.
The e-commerce company will also start rolling out its own branded non-perishables such as laundry detergent, according to the Wall Street Journal.
The items will be sold under brand names like Happy Belly, Wickedly Prime and Mama Bear, and is rumored to begin appearing on Amazon’s website at the end of May or early June.
The U.S. market for store brands reached $118.4 billion in 2015, a $2.2 billion uptick from the previous year, according to the Private Label Manufacturers Association.
Amazon aims to be more profitable in niches with generally higher margins, and getting ahead of its own vendors in creating new products.
“Amazon is ‘carpet-bombing’ the market with new products,” Bill Bishop, chief architect of brand consultancy Brick Meets Click, told the Journal. “Private label allows them to test out new prices and distinctive flavors with less risk.”
He said private-label goods have higher profit margins than name brands, saving companies costs on marketing and development.
However, the private label groceries will not be available to just anyone.
The Journal reported that customers will need to be subscribed to Amazon Prime — which currently offers a $99 per year membership and is estimated to have more than 50 million members — to buy groceries.
Amazon’s private-label electronics brand “AmazonBasics,” which launched in 2009, already features hundreds of products, such as cell phone cases, computer mice, batteries, dumbbells and dog crates. It has recently started selling its own fashion lines, such as Lark & Ro dresses and North Eleven scarves.
However, expanding private-label offerings was not always easy for Amazon. In 2014, the Seattle-based company pulled diapers from its Elements line just weeks after launch due to design flaws.
In 2015, Amazon rolled out Prime Fresh, which allowed Prime members to use AmazonFresh. It required a $299 per year membership, plus a $50 minimum order for free delivery, with all the benefits of Prime, reported GeekWire.
Thanks for reading!