In a quest to expand brand partnerships, Amazon is offering independent merchants prominent placement on its platform as well as marketing support and product reviews.
The cost for entry into the Amazon Accelerator Program is steep, however, as merchants can possibly lose their brands and business to Amazon, The Wall Street Journal reported Thursday (July 18).
The program gives Amazon the right to purchase a merchant’s brand at any time for a fixed price (which is often $10,000, according to the report) with 60 days’ notice. Sellers don’t have to opt in to the invitation-only program but those that do choose to participate will likely make more sales in the eCommerce giant’s overfilled online space.
“Amazon’s private-label products account for approximately 1 percent of our total retail sales,” an Amazon representative told the newspaper, pointing out, “This is far less than other retailers, many of whom have private-label products represent 25 percent or more of their sales.”
Sellers who are part of the Amazon Accelerator program will see their products conspicuously displayed and won’t get charged for reviews through Amazon’s Vine Reviews program.
Brands in the Accelerator Program get a range of perks, including social media and email marketing, access to a Seattle-based coworking space and participation with other brands in special projects such as co-branded pop-up retail stores, AMZ Advisors said in a May article.
The concept started when Amazon launched a page called Our Brands in October of 2018 as an open invitation to brand owners and manufacturers to sell exclusively on Amazon. The goal was to ramp up its private-label business and diversify its offerings. It’s estimated that Amazon’s private-label business could see revenues of $25 billion by 2022.
The company is under scrutiny from regulators for alleged anti-competitive tactics and testified at congressional hearings July 16. In addition, the European Union is investigating Amazon’s third-party merchant dealings.