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Amazon’s New Competitive Advantage: Putting Its Own Products First

Pro Publica – “Brands have long been able to bid for the premier slot at the top left of Amazon’s listings, but during the pandemic the online retailer has begun using this position for its private-label items, raising antitrust concerns. Although customers don’t necessarily realize it, brands have for years been able to bid on search terms to secure the most visible listing positions at the top of Amazon’s product search results pages, where their products carry a “sponsored” tag above the description. Now, they still bid for top-row placements, but the best spot — the top left on the first page — is unavailable across dozens of product search terms, according to consultants and ProPublica’s own review. During the pandemic, Amazon has begun to use that position for its own private-label products, without bidding, under the heading “featured from our brands.” The domino effect of Amazon’s new strategy has demoted competitors’ listings for products including diapers, copy paper, kids’ pajamas, mattresses, trail mix and lightbulbs. By putting its own private brands in some of the most valuable slots, Amazon is sacrificing short-term ad revenue to build up sales of its private brands over time, consultants said…”

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