Amazon quietly launches AmazonCommercial, a private label for business customers

Initial product lines limited to bulk supplies of toilet paper, tissues and paper towels.

Amazon created a new private-label line of commercial products that will compete with Kimberly-Clark and other brands, starting with bulk orders of toilet paper and paper towels.

The e-commerce giant quietly began offering the new brand, called AmazonCommercial, from an online store which appeared on Amazon.com in June. Presently, there are only a handful of products under the new brand, including extra-large rolls of toilet paper, large stacks of paper towels and crates of tissues—the kind of paper goods typically found in office bathrooms.

AmazonCommercial is “a line of professional-grade products created with business customers in mind,” said an Amazon spokeswoman in an e-mail statement on Monday. “The brand currently offers janitorial and sanitation products.”

Amazon already has a consumer-products brand called AmazonBasics that makes a variety of household goods; along with a private label called Solimo that covers tissues, paper towels, cleaning items, garbage bags and other products; plus numerous other brands across dozens of categories, including its Mama Bear diapers. 

Now, with AmazonCommercial, the e-commerce giant has a private label in the business-to-business sector, too—a growing area of interest for Amazon since its launch in 2015 of Amazon Business, a commercial marketplace selling lab equipment, safety gear, kitchen products and more.

There is intense interest in Amazon’s private brands as the company becomes an increasingly powerful force in retail. Amazon will account for 38 percent of all e-commerce in the U.S. in 2019, according to eMarketer. Its dominant position has made it an easy target for lawmakers and regulators. In fact, Amazon was recently named as the subject of an antitrust investigation alongside Google, Facebook and Apple. The Department of Justice and Federal Trade Commission are looking into whether the tech giants are too powerful and whether they manage their platforms in ways that stymie competition.

There are a couple of areas where Amazon could have a distinct advantage—promoting its private brands in ways that take customers away from rival brands; and using data gleaned from competitors’ activity on its platform to make its own business decisions, such as deciding what product categories to enter.

Amazon knows the top-selling products and categories on its own platform, says Forrester Research VP and Principal Analyst, Sucharita Kodali.

“Amazon is going to find a way to basically source those [products] for less or, where possible, make its own version,” Kodali says, “especially if it knows there is enough quantity sold on Amazon that will justify Amazon making it itself.”

Earlier this year, Amazon drew fire for displaying digital pop-up ads for its private labels when shoppers browsed competing brands on mobile devices. Ads for AmazonCommercial products have run on product display pages of rivals like Scott and Kleenex, too. The ads say: “Great quality, better price.”

Amazon declined to comment further on how it devised its commercial-products strategy and marketing tactics on Amazon.com.

Earlier this month, Nate Sutton, Amazon’s associate general counsel, spoke about the company’s business practices at a U.S. House Judiciary subcommittee hearing. Sutton was asked whether or not he considered it to be a conflict of interest to run a marketplace and to sell products in it.

He answered by noting that retailers have always sold their own products in stores alongside competing brands.

“Private brands is an area where, quite frankly, we lag behind many of our retail competitors who have 20 to 80 percent of their products as private brands, where we’re only in the low-single digits,” Sutton said. “We do offer private brands on occasion because we think it offers high-value and low-cost items for customers and because customers demand that.”

Source: AdAge.com