[repiret]

> they are selling to customers who would not have purchased the name brand

When I was a kid, the supermarket had an isle named "generic", and all the generic stuff was relegated to that isle and came in plain yellow packaging. Back then, I would have accepted that they're not selling to the same customers as the name brands.

Today, store brand stuff at the supermarket is sitting on the shelf right next to the name brand stuff, with intentionally similar packaging. They are absolutely competing with the name brand stuff. And thats true at Home Depot and Walmart and Costco and everywhere else I shop that has a mix of store-brand and third-party brand stuff.

Of all the places I shop, Amazon is the only one whose store-brand is plainly labeled as such, and I give them kudos for that. Some places like the grocery store and Costco have a single store-brand, so you don't have to work too hard to figure out whats name brand and what isn't. While yet other places have several store brands that aren't really marketed as such in an attempt to confuse you into thinking you're getting a name brand (plumbing and electrical fixtures at Home Depot and Lowes is where I've seen this most rampantly)

[bigjimmyk3]

You are correct that more stores are mixing their house brand in with "national" brands (or whatever term you want), and that stores have discovered the good ROI that comes from upping their house brand game (which is the point of the linked article).

I want to add that there is a hidden benefit for name brands to having the house brands there, at a lower price point. There's plenty of fascinating reading on "price positioning" and how having a lower house brand right next to the national brand results in increased sale of the national brand.

My main point was that I don't think Amazon sees its relationship with vendors the same way that older retailers do. WMT has a deserved reputation for being very aggressive with their suppliers, but I believe that their culture still sees the relationship goal as win-win (they would argue that they are helping their suppliers achieve better efficiency, or often licensing the national brand's stock to make their house brand so more sales for all). I know nothing about Amazon's buyer culture, but their own brand activity does not seem to give much consideration to supplier health.

It's also interesting to note that their own brands are immune to the commingling problem, which gives them a perverse incentive to let that problem ride. That makes me very uncomfortable.