Amazon.com, Inc AMZN is reportedly slashing its selection of private-label items and has discussed the possibility of exiting the segment altogether to reduce regulatory pressure.
What Happened: The Jeff Bezos-founded e-commerce giant’s leadership told its private-label team to reduce the list of items and not to reorder many, reported the Wall Street Journal, citing people familiar with the matter.
Amazon executives discussed reducing the private-label products by more than half in the United States, a source told the Journal.
The move came after a review by its former consumer business head, Dave Clark, who pushed the team to focus on bestselling commodity goods instead of in-house brands, according to the report.
The decision to slash the house brands was taken because of disappointing sales for many of those items, the Journal reported.
See Also: How To Buy Amazon (AMZN) Shares
Why It Matters: Amazon offers its products under house brands such as Amazon Basics, Goodthreads and Solimo, which account for only 1% of retail sales, reported the Journal.
The private-label business reportedly encompassed 243,000 products across 45 house brands as of 2020.
The growth of Amazon’s own offerings put it in competition with sellers on its platform and evoked competition with other sellers, along with antitrust scrutiny, noted the Journal.
Amazon is facing regulatory pushback from the U.S. Senate alongside other tech giants. The company recently asked its third-party sellers to support it against anti-trust legislation.
In 2020, it was reported that Amazon executives used privileged third-party seller data to decide which products to launch.
Price Action: On Thursday, Amazon shares closed 0.2% higher at $110.63 in the regular session and gained 0.7% to $111.40 in the after-hours trading, according to data from Benzinga Pro.
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