Momentum Commerce recently conducted an insightful analysis proving the contraction of private label on Amazon. After years of brands and legislators expressing concerns around Amazon Private Label brands, an analysis of Q1 sales and badging activity shows that Amazon’s pullback in this area, which began in earnest in 2023, is truly starting to express itself in the marketplace. The study analyzed badge and revenue data from the top one million Amazon US search terms, comparing Q1 2023 to Q1 2024. Amazon's private label revenue and badge performance were examined, revealing significant trends and opportunities for other brands.
- Private label sales reached over $1B in Q1 2024, but market share decreased from 1.0% to 0.9% YoY.
- Declines in 16 of the top 20 physical goods categories.
- Notable exceptions: Health & Household, Baby Products, Beauty & Personal Care, Sports & Outdoors.
- Fewer Best Seller and Amazon’s Choice/Overall Pick badges.
- Significant reduction in Amazon's Choice badges across numerous categories.
- Clearer path for other brands to attain ‘Overall Pick’ badges.
- Reduced threat from Amazon Private Label dominance.
- Amazon’s catalog focused on less differentiated goods like basic apparel and baby essentials.
- Brands can differentiate through quality, unique features, and targeted marketing.
What are your thoughts on Amazon's shift away from private labels?
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