Amazon.com Inc. has started drastically reducing the number of items it sells under its own brands, and the company has discussed the possibility of exiting the private-label business entirely to alleviate regulatory pressure, according to people familiar with the matter.
Amazon’s
AMZN,
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. Clark left the company last month. As a result of that review, Clark pushed the team to focus on bestselling commodity goods, along the lines of Target Corp.’s
TGT,
“Up & Up” or Walmart Inc.’s
WMT,
“Great Value” brands, rather than offer the extensive range of items Amazon currently does, the people said.
An expanded version of this report appears on WSJ.com.
Also popular on WSJ.com:
12 hours of misery at Heathrow: Huge crowds, lost bags, endless cancellations.
People have money but feel glum — what does that mean for the economy?
