As Amazon Kills Off Most Of Its House Brands, Perhaps Its Supposed Anti-Competitive Access To Data… Didn’t Actually Help It Compete?

Three years ago we had the CEO of Jungle Scout, Greg Mercer, on our podcast, to debunk the claim that Amazon was unfairly competing with third party sellers in the Amazon marketplace. It’s become somewhat accepted wisdom that Amazon is engaged in some sort of predatory behavior, looking at what products sell well with data that only it has, and then coming in with competing products that undercut those sellers.

That claim made sense to me, until I had that conversation on the podcast, where Mercer explained that it just wasn’t true that Amazon had special data that no one else had. Jungle Scout is a tool for those who sell on Amazon, and Mercer’s argument was that it was possible for just about anyone to get similar data, and there were all sorts of reasons why Amazon wouldn’t be able to out compete many of the sellers on Amazon with its own house brands. In fact, a lot of his argument was that Amazon’s house brands don’t really sell that well.

Now Amazon is basically admitting that many of its house brands are failures, and it’s shutting them down.

Amazon is slashing the number of in-house brands it offers on its marketplace. The retail giant plans on cutting 27 of its 30 private-label clothing brands as it looks to cut costs and stave off antitrust scrutiny, according to a report from The Wall Street Journal.

Amazon is keeping just a few house brands, generally those that have the Amazon name in them, and ditching basically all the brands that don’t. While much of the framing in the various news stories I’ve seen suggest that they might be doing this to try to relieve regulatory pressure (as the FTC is expected to file yet another lawsuit against Amazon shortly), it also seems quite likely that the reality is that, for all of the “data” that Amazon has access to, it didn’t much matter when it came to getting customers to actually buy the products.

Anyone who’s ever sold anything knows that there’s a lot more than just “data” to figuring out what products to sell, and how to best sell them. Branding matters, for one thing. It might very well be true that Amazon is using data in a sketchy way, but if that is true, it’s not at all clear that it’s working in a way that is damaging competition. I know that we live in era where people seem to think that “big data” is like some sort of magical mind control device that allows the big companies to force people to do things against their will, but over and over again the evidence suggests that “big data” can be helpful but is hardly the powerful monster that we’re constantly told it is.