The challenge in creating new products to sell online, be it private-label or new inventions, is capital and time. The capital and time is the cost of creation. The goal is to drive the cost of creation down to zero.
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Only 2.4% of the top 10,000 sellers on the Amazon.com marketplace started selling during the past 12 months. The takeaway is two-fold: new sellers do not immediately break out in to the top, and top sellers are able to stay in the top for years.
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Devin Wenig, CEO of eBay, said "Nobody wants to go through 10,000 iPhones. Show me the four best options." eBay is correct that the way eBay functions today is not how most people shop.
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Why does Amazon Basics exist? The difference between what Amazon could be making, and what they do make today is why this is interesting. In fact, that difference is why Amazon Basics is not the play it appears to be.
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People do not shop the same on Amazon as on eBay, nor on eBay as in small websites, and neither in small websites as in retail shops. And so people do not buy exactly the same things on Amazon as they do elsewhere.
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“There is this erosion of what it means to be a traditional consumer product brand. Amazon is becoming something like the umbrella brand, the only brand that matters.” If true, one should be building a brand which embraces this.
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What Amazon likes to talk about are rarely the things which matter. Instead Amazon is playing poker by only revealing the hints it wants you to see. Amazon's drones is a head fake.
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Physical goods are rarely made in the US. Often the country of origin is China. China has been exporting goods to the US for decades, but now Chinese manufacturers want to sell direct-to-consumer. Marketplaces like Amazon are a perfect avenue.
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Nothing describes the Amazon product reviews problem as well as Goodhart's law: when a measure becomes a target, it ceases to be a good measure.
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Putting aside the thousands of private-label brands, which are rarely more than a logo glued to an existing product, there are true new products being created for the Amazon market. They are often born from the data and insights on Amazon, and are digitally-native on Amazon alone. They don't involve retailers, they don't sell anywhere else - all they do is play the Amazon game really well.
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