However, by no means is this different from the store branded products you find at Safeway or Walgreens. They do the exact same thing. The vendors pay for shelf space, share their profits, only for the supermarkets to copy the product and sell it as store branded ones.
Like a lot of things a fresh perspective helps. People are talking about it now but it was a minor shock when I saw this the first time I visited the US (2012is). I was curious on how the brands were okay with it. I assume they rely on their brand sway. Apparently it's been a thing that goes back a very very long time.
> by no means is this different from the store branded products you find at Safeway or Walgreens
It is different because Amazon controls exposure to products. In the store if I want ketchup, Heinz and the store brand are right next to each other and easily distinguishable. Amazon can bury the original product on page 2 of the search results. Also, its not always obvious in Amazon's search results that there is a viable option other than the Amazon branded product.
Stores absolutely use placement to promote one product over another. Eye level shelves are prime space, low ones near the floor are for cheap products with low margins. And “end caps” (the short end of an aisle of shelving) are for high visibility product placement.
The brick and mortar equivalent of pushing search results to page 2 is to just stop carrying the product—considerably worse than being on page 2.
No, that is not the brick and mortar equivalent at all.
Amazon does not purchase most of the inventory listed in its search results.
Retail stores actually buy (almost) everything they sell (albeit at lower "wholesale" prices), and "resell" to end customers. So when a retail store stops carrying a product, they stop buying the product from the supplier, and that is always because the item was not profitable to sell.
(In rare cases, they sell on consignment, but such arrangements would apply to less than .001% of products sold at retail. Selling on consignment has a whole host of separate issues, which is why it is so rare even though it would seem most profitable to retail stores.)
Yes, in rare cases, such as for low volume goods (or new goods with an unproven sales history), manufacturers might sell inventory on consignment through a retail store.
But that is the exception that proves the rule, and suppliers go into those situations with the option of simply selling to competing retail stores.
Yep. Then the vendor has to add the responsibility of covering “shrinkage”, as the store doesn’t care when the product is stolen, as it doesn’t belong to them!
Vendors do not cover shrinkage, except for the rare items sold on consignment. Shrinkage losses are either absorbed by the store or handled by insurance.
Rack jobbing means the vendor stocks the shelves, sometimes literally. The vendor isn’t paid until the item sells. That’s common for a variety of merchants.
What I've noticed is many retailers only carry one or two name brands and flank them with their store brands of which they usually have three tiers.
So for example you only find Ryobi tools at the Home Depot but Craftsman and Black+Decker are exclusive to Lowes. Grocery stores do similar exclusivity with certain brands, Sargento's cheese comes to mind.
Many brands do not want to sell branded products at a discount, so they see the store brand as a positive.
Some stores manage to get their brands recognized as high-quality, but not nearly as many as you probably think. The usual consumer recognition is that they are knock-offs. So the more known brands don't see them as direct competition.
However, by no means is this different from the store branded products you find at Safeway or Walgreens. They do the exact same thing. The vendors pay for shelf space, share their profits, only for the supermarkets to copy the product and sell it as store branded ones.
A comment like this pops up every time this happens with Amazon, and it's not even remotely the same thing at all.
Amazon only "resells" a limited subset of products. Most of the products on Amazon are sold on consignment or by third party sellers with fulfillment by Amazon.
Stores buy all of their products from their suppliers, both the name brand products and the store brand products and "resell" those products to end customers. In fact, the same company (or companies) supplies both the name brand and store brand products. Store brand products are just white label variants of the name brand. The supplier deliberately offers it as part of a market segmentation strategy, with the goal of making the name brand appear (more) premium.
Suppliers also do not pay for shelf space for most products in grocery stores. Paying for shelf space is an optional marketing strategy; suppliers can choose to pay for premium placement, and if they do not the store will simply place the most profitable items in the premium locations.
Suppliers also don't share their profits, and I don't know where you got that idea from. Suppliers sell to grocery stores at wholesale prices. And the grocery stores than "resell" those items at a markup to end customers.
Finally, grocery stores very rarely sell items on consignment, because most suppliers won't put up with that shit. Only low volume or new/trial products with no sales history get sold on consignment, because the store can't and won't purchase perishable inventory without knowing how (or when) it will sell.
Store brands for stuff like bread, etc. are not only bought from the same manufacturers as the "real stuff", they show up on the same trucks and are faced by the employees of the same distributor.
Just because something is made by the same manufacturer at the same location, doesn't mean that the manufacturer used the same inputs/recipes in everything it produces. It can easily have different lines that use different quality levels of input at different price points.
I felt the implication of your original comment was "store brands are functionally the same as name brands", and wanted to clarify that was not necessarily the case. Apologies if I misunderstood.
store branded products have a reputation as crappy ripoffs, can you tell these amazon products are from amazon? Haven't used amazon in years so wouldn't know.
I believe there is one glaring difference: The deception/sneakiness factor. I know Kirkland is Costco's brand, Great Value is Walmart's brand, No Name is Superstore.
However, by no means is this different from the store branded products you find at Safeway or Walgreens. They do the exact same thing. The vendors pay for shelf space, share their profits, only for the supermarkets to copy the product and sell it as store branded ones.
Like a lot of things a fresh perspective helps. People are talking about it now but it was a minor shock when I saw this the first time I visited the US (2012is). I was curious on how the brands were okay with it. I assume they rely on their brand sway. Apparently it's been a thing that goes back a very very long time.