This chart below is striking fear into the hearts of branded packaged goods providers (think Pampers, Duracell, Kleenex). Why? In a short period of time, Amazon has become a leading online “private-label” supplier of common products like batteries (#1) and baby wipes (#3). Since Amazon owns the final click to the customer, collects oodles of customer data and controls the shopping experience, it is easy for them to work with a manufacturer, slap their name on the product and provide great placement for it on their website.

 Questions for students:

• What does “private-label” mean? Look up a definition and explain in your own words.
• Would you consider using an Amazon branded product? Why or why not?
• Why do you think that Amazon has done so well in these two product categories? What are the attributes for this product which may have made it easier for Amazon to “get in the game?”
• How do you think that Amazon is competing so well against these well known brands?
• Do you think this is a positive or negative for consumers? For these branded companies? Explain your answer.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.