Margin of Opportunity

What is the best way to increase your margins as a merchant? Sell your own merchandise. Quartz as an interesting piece on Amazon’s “secret” plans for private merchandise:

Trawling through over 800 trademarks that Amazon has either been awarded or applied for through the US Patent and Trademark Office (USPTO), Quartz identified 19 brands that are owned by Amazon and sell products or have product pages on amazon.com.

The key strategy behind private label brands is this however:

Perhaps what Amazon is trying to do as it rapidly expands into new businesses—especially business areas where it might not have forged partnerships with well-known brands—is to give the impression to customers that there are tons of options to choose from, when in fact, they’re really just choosing between different Amazon brands. “Consumers pay a premium for a brand, that’s why they’re not store-generic,” DiMassimo suggested.

Retailers have long adopted a multifaceted brand approach to retailing – think Zara plus Massimo Dutti, Oyosho, Bershka etc or HM plus COS, Cheap Monday or indeed pretty much any other major retailer these days. As above, it’s about generating margin whilst at the same time, presenting a feeling of choice.

Read the full piece

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