Amazon is outsourcing brand development

Amazon is hoping to further expand its roster of private brands, but wants them to come from other manufacturers.

After finding that the development of products was too costly and time-consuming, the Seattle-based retailer is asking consumer goods companies to produce brands that are developed exclusively for Amazon, according to a Wall Street Journal article.

According to the article, this initiative is the latest example of the e-commerce giant “flexing its muscles” in order to offer the lowest prices and widest selection as it seeks to cut into the market share of big-brand manufacturers.

But what do these retailers get in return? Assistance in launching their products on Amazon.com, which includes faster customer feedback when testing new products, marketing support, and, of course, revenue from the sales. They also can appear at the top of search results, according to the Wall Street Journal.

An Amazon spokeswoman said the program offers manufacturers a way to “launch brands and products directly to Amazon customers.”

To read the Wall Street Journal article, click here.