Amazon`s Private Label Brands: An Ethical Perspective
| Case Code: BECG186 Case Length: 13 Pages Period: 2009-2022 Pub Date: 2024 Teaching Note: Available |
Price: Rs.400 Organization: Amazon.com, Inc. Industry: e-commerce Countries: United States Themes: Business Ethics, E-Business StrategyProduct Strategy & Design,Data Privacy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Evolution of the APL Brand Strategy
Independent third-party retailers and vendors used Amazon’s marketplace to sell their products. Third-party sellers paid Amazon a referral fee and the company received a percentage of all third-party sales. Independent sellers could handle product fulfillment themselves or pay for Amazon Fulfillment services..
The Controversies Surrounding APL
As of 2020, Amazon was selling 243,000 products under 45 different private-label labels. By 2022, it had at least 118 private-label brands, with some carrying its logo, and others not..
Allegations of Counterfeiting through APL
Over the years, numerous allegations of counterfeiting had been made by third party sellers against APL products..
Search Result Manipulation
Amazon faced frequent allegations of leveraging its extensive internal data to promote its own items, often to the detriment of other third-party sellers..
Data Theft and Antitrust Issues
Amazon faced scrutiny in the US, Europe, and India over its purported anti-competitive behaviors that had adverse consequences for other enterprises. It came to light that within months of the introduction of Amazon Basics in India in 2015, four of its products consistently held the “#1 Bestsellers”..
The Fallout and Amazon’s Response
In 2019, the FTC began investigating Amazon’s competitive practices. The same year, the EU too began investigating Amazon’s use of merchant data. Again in 2019, there was a congressional committee that investigated big tech companies..
The Road Ahead
As of June 2022, Amazon accounted for 37.8% of the US e-commerce market (See Exhibit IV), making it the country’s leading online retailer by a considerable margin..
Exhibits
Exhibit I: Amazon’s Timeline
Exhibit II: Amazon Private Label Brands
Exhibit III: Private Labeling Vs. Other Business Models On Amazon
Exhibit IV: Market Share of Leading Retail e-commerce Companies in the US, as of June 2022
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