Staying Ahead of Amazon’s Online Private Label Takeover

In 2019, the U.S. Census Commerce Bureau declared that online sales had finally overcome so-called general merchandise sales for the first time ever. While that sounds like big news for all who operate in off or online retail, analysts credited Amazon for a large part of the growth, specifically due to Amazon Prime’s customer-friendly shipping rates and speedy turnaround times.

Amazon indeed has a huge network of resources that make it challenging for small businesses to compete, including:

  • Huge warehouses of A-to-Z ready-to-ship inventories in every major city
  • An easy to use marketplace search engine, and
  • Crazy helpful product reviews and recommendations

However, of all of these advantages, one product fulfillment aspect that challenges Amazon as a retailer again and again, is its ability or lack thereof to roll out in-house produced, high-quality, unique products that drive fashion forward rather than fulfilling utilitarian gaps in buyer wardrobes.

Amazon’s Struggle to Grow from ‘A to Z’ to Amazing

Boutiques are getting creative in a challenge to Amazon's retail takeover

Amazon’s growth focus has taken the giant further and further down the path of expanding into private label.

Private label is when a brand creates a unique product under its own label, rather than sourcing products from wholesalers or other sellers. Doing so does a couple of things for Amazon, as well as other brands that choose to transition from wholesale to private label. With private label, a brand can:

  • Maintain complete control over product quality
  • Assign unique products higher price tags
  • Avoid having a profit margin reliant upon wholesaler pricing ups and downs

Amazon has already begun to stretch its wings into the private label market, and sellers are not loving it. However, now is not the time to hesitate. It’s the time to get out ahead of Amazon and build your boutique’s brand loyalty online before Amazon has time to expand too far into the private label apparel space.

White Label: Private Label for Beginners

White label is a great way for boutique owners to try out private label

Starting out in private label can be intimidating, particularly without formal fashion design or pattern making training. That’s why many boutique owners find it helpful to start their private label using white label products.

White label products are products that one company manufactures for another brand to sell under their own brand mark. This differs from wholesale in that the white label products actually take on the brand of the store or boutique selling them. In apparel, this gives a couple of advantages to stores using white label to source inventory:

  1. There’s a faster turnaround time with white label than private label. It’s not as quick as wholesale, but with no sample patterns to test and edit, white label allows boutique owners to go straight into the production phase without having to mess around in sampling.
  2. White label products create brand equity. They’re an investment in the brand of the business. The shop owner, online or offline, no longer acts as a simple vendor of another business’ goods, but as the #boutiqueboss of his or her own label.
  3. Since white label is still one aspect of private label, shop owners can typically charge more to customers for their branded high-quality pieces that customers can't find elsewhere.
  4. Although some white label services require you to order products as-is, some allow you to make minor modifications – such as sleeve length, material, etc. – to the products you order, without undergoing product sampling.

Going Beyond A to Z

Amazon struggles to compete with unique private label clothing vendors and boutiques

Amazon is a great resource for a lot of things – mason jars, tents, towels, etc. But if you’re a boutique owner, Amazon’s reputation is likely not the same one you’re going for, so as long as you stay focused, you shouldn’t be intimidated.

That said, in the wake of inexpensive, easy to use tools like Amazon, sourcing the same products as all of your competitors is not the way to win profit or grow a loyal following.

If you’ve been a wholesale purist all your life, try mixing up your sourcing equation with two or three white label or private label products. No one knows your customers better than you do, and no one is more equipped to bring them the distinctive, high-quality, and uniquely branded products that they’re most likely to invest in. Amazon gets ahead by being available and by being affordable. You can get ahead, not by limiting or over-stretching your shop in those two areas, but by instead focusing on building an unbeatable and unmatchable inventory.

Whether you sell online or offline, a private label, even via white label, can help you stand out to customers and give them a reason to value your brand a cut above the rest of Amazon’s forgettable apparel sellers.

To get in on white label with product quantities as low as 6 items, check out The White Label Crowdfund Collective, a MakersValley + Boutique Hub partnership.

Explore The Collective

Comments