Amazon could be getting out of the private label business, which only account for about 1% of its retail sales, and has been reducing the number of products it sells under its own labels.
The eCommerce and technology giant is considering the move partly because of poor sales and partly to get out from under the regulatory pressures in Europe and in the U.S., the Wall Street Journal reported on Friday (July 15), citing unnamed sources with insider information.
See also: Amazon Pitches Deal to Remedy EU Antitrust Charges While Watchdog Seeks Feedback
Amazon offered concessions on Thursday (July 14) to settle two European Union (EU) antitrust probes, including fair treatment to third-party sellers, PYMNTS reported. Amazon could face a fine of as much as 10% of its global turnover, which could amount to billions of dollars.
The United Kingdom’s Competition and Markets Authority (CMA) is also looking into whether Amazon is abusing its dominant position in the U.K. and “distorting competition” by favoring its own retail business.
Read more: Amazon Pushes for End to European Commission Probe with Data Sharing, Rival Boosting
Amazon launched its private-label business in 2009 with consumer electronics products and now offers all kinds of merchandise under the brands Amazon Basics, Goodthreads, Solimo, and others. As of 2020, Amazon’s products totaled 243,000 products across 45 different house brands, the WSJ reported.
Related: New Data: Amazon Keeps Lead Over Walmart in Share of Q1 Retail Spending
Sales for many of Amazon’s private label goods have been off the mark, the sources told the WSJ. Amazon’s total 2021 revenue, including other businesses, totaled $469.8 billion.
Amazon’s private label team was told by executives to cut the number of products and reduce the number in the U.S. by more than 50%, the sources told the WSJ.
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