The American company – Amazon.com Inc (NASDAQ: AMZN), launches for the first time the sale of food products of its own brands, according to The Wall Street Journal.
This week, Amazon began selling on its website coffee beans and ground coffee Happy Belly, creating competition to its neighbor Starbucks (headquarters of both companies are located in Seattle). Amazon also produces baby food Mama Bear with two different flavors.
Last month, the WSJ reported that Amazon is preparing to introduce four own brands, under which it will be produced foodstuffs, diapers and cleaning products. New products are only available to users who have signed the Amazon Prime subscription.
These types of in-house brands are generally profitable for both their manufacturers and retailers, particularly because of savings on brand development and marketing. By developing its own products, the American company can be possible to design packaging to reduce shipping costs, and also manage profit margins much better.
Last year, sales of goods of its own brand stores in the United States reached $ 118.4 billion, about $ 2.2 billion more than last year, according to the Private Label Manufacturers Association (PLMA).
When asked to comment, an Amazon spokesman said she has nothing to say about this for the moment.
Speaking about prices, Amazon wants to make its brand become something original in comparison to the competitors, and it’s not about discounts. Bags of 12-ounce Happy Belly coffee cost $9.99 each, which is $2 more expensive than Starbucks’s breakfast blend, yet $3 less than Starbucks’s French roast in a similar size. Also, it is cheaper than some small-batch roasters.
The apple blueberry organic baby food from Amazon costs $12.49 for a dozen 4-ounce jars. This is a little bit more than the $12 paid for a range of 12-pack of Earth’s Best brand organic baby food from Hain Celestial Group Inc.
This is not the first attempt of Amazon to create its own brands. A wide range of products comes in the line of AmazonBasics, such as batteries, tripods, balls to play bocce. Also, under the brand name Pinzon, the company produces bedding.
Amazon.com Inc. is the world's largest online retailer and one of the first online services focused on the sale of goods of mass demand.