Despite its successful track record of launching private label brands, Amazon offered brands a carrot last year with Amazon Exclusives, which lets them use the e-commerce giant’s resources to increase their performance. We took a look at what the program offers brands—and whether it’s worth it.
Outside their own sites and storefronts, “Exclusive” brands can only sell on Amazon marketplaces, so brands need to be willing to miss out on potential sales from other channels. Products must also meet minimum performance metrics related to defects, cancellation policies and shipping rates.
Overall, though, the move seems to be a win-win for both vendors and Amazon, according to Gartner L2’s report on the topic.
Becoming Amazon-exclusive gives brands access to a wide range of benefits, such as enhanced visibility, marketing tools, added product discoverability, and enhanced protection against counterfeiting. Brands also automatically qualify for Fulfillment by Amazon (or FBA) and Prime. These advantages are tempting for small and mid-sized brands that might have a great product but lack the deep pockets that traditional big name brands often enjoy.
Meanwhile, forming exclusive brand partnerships allows the e-tailer to add unique partner products that plug assortment gaps in high-demand categories without having to spend the resources to develop, manufacture, market, and sell its own products. Exclusive brands like Starter have been cropping up in high-demand categories, and the trend has reached even categories such as health care that require intensive research and development.
Overall, we think the Amazon Exclusives program presents a lucrative opportunity for third-party brands that receive a significant share of their revenue from the platform. By opting in, they can double down and drive additional sales.