drtbear1967
Musclechemistry Board Certified Member
by Matt Weik
I think it’s clear to say that Amazon has become the elephant in the room lately when it comes to supplements. Not only are they stealing share from ecommerce supplement retailers across the globe, but now they decided to dabble with their own supplement line and put a full court press on the industry. What does this mean for their website, the competition, and the market?
Cannonball!
Amazon is jumping into the deep end to see if they can create a bigger splash than the competition. They obviously have the name, but is that enough to carry the sales on their back? Bodybuilding.com has been known as the big gorilla of the industry in terms of online sales, yet their numbers seem to keep slipping and their executives keep bailing out. Could the writing be on wall for their website and is it true that Amazon is truly putting a hurt on the competition? The answer is YES!
When I was with MET-Rx, a topic of conversation that seemed to be regular was how they can compete with the likes of Amazon in the space. Bodybuilding.com just never seemed to get a grasp or understanding as to how Amazon could consistently crush them on price and then offer free shipping on orders. It was almost like Amazon was using the supplement industry as a lost leader on their site. If they could engage the supplement user, and have them purchase other higher-margin products on the site, it might work out in their favor. Or, maybe they are smarter than we thought and had a plan to get into the supplement industry all along and wanted to build their customer-base first before they started their own line? Either way, if I were ecommerce sites or supplement brands, I’d keep a very close eye on what Amazon is doing over the next several months and plan their strategy moving forward accordingly before it’s too late and they’re shuffling to quick make a change.
The old Bodybuilding.com model almost seemed prehistoric when Amazon started getting into the supplement market and selling products on their website. It seems like Amazon knew exactly what the consumer wanted and give it to them. Now you can order your favorite protein, use Amazon Prime, and have it at your door in two days or less along with any other household item you could possibly want under the sun. Amazon is becoming a full-blown beast across many industries.
So, not only has Amazon clubbed the competition over the head, but now they want to go after the supplement market with their own private label named Amazon Elements—which actually isn’t new.
Amazon isn’t opening the door, they’re kicking it down
Back in 2014 Amazon started their private label brand when they came out with and launched their own line of baby products—specifically baby wipes and diapers. I only know this because we had a baby the same year which peaked our interest in possibly trying out their new line of products. Unfortunately for Amazon, their baby products didn’t set the world on fire. In fact, the only product that they ended up keeping were the baby wipes. Despite their failed baby line, jumping into the supplement market, while nowhere in the same realm of baby products, seemed like a very good idea for them. Their online supplement sales are growing year over year, and with their new initiative to do more in the space, it only seems reasonable that they would give their own private label line a shot.
As of right now at the time of writing this, Amazon is only dipping their toes in the water to get a feel for how well the brand will sell. If it’s anything like their baby line, the products might fizzle out fairly quickly, but only time will tell. For the time being, Amazon is only releasing four products on their website: Calcium Complex, Turmeric Root Extract, Vitamin D2, and Vitamin K2. These products are only available to my knowledge through the Amazon Prime program.
The packaging of the product is pretty basic, but I’d assume that is on purpose to make it look like a mass type of product versus anything hardcore like some brands in the market, and yes, there are plenty of brands out there who have “hardcore” vitamins and minerals which is kind of laughable. But, the Amazon Element labels are black with a transparent smoke colored bottle and black lid. There’s some color on the label dependent on the product, but other than that, the labels are fairly bland.
What does this mean for the sports nutrition and supplement market?
Right now, while some should be worried, I wouldn’t say there is a need for panic. We saw what happened to their baby line of products, and the same could happen to their supplement line. While the products released aren’t going to hurt most of the big players in the supplement industry, it will surely hurt some of the online retailers who sell similar products.
For years Amazon has dabbled with minimal margins and have quickly realized that the supplement industry carries some great overall margins on privately labeled products. Amazon has also done their homework and knows that the online market over the past several years has exploded and brick and mortar locations are hurting across the nation. More and more people are going online in search for their vitamins and supplements. It’s convenient to not have to leave your house to pick up your favorite supplements. Look at one of the most recognized retailers out there—GNC. They completely re-positioned their business model in hopes to regain some of their customers they lost to the internet. Will they succeed? I don’t think so, but they could prove me wrong.
Amazon has a HUGE customer-base already and with this addition of a supplement line, they are looking to pick away at some of the low hanging fruit out in the marketplace and see what share they can steal with the customers who already shop on their website. Let’s be honest, if you are new to the supplement industry and are looking to pick up some products based off of your doctor’s recommendation, would you trust company XYZ that you never heard of or Amazon? If you’re a loyal shopper to Amazon, the choice is an easy one.
Is the line what the industry needs?
In case you were living under a rock, let me fill you in on something. The supplement industry has been under the microscope lately and lawyers as well as the FDA have had their finger on the pulse here of late. With lawsuits spreading like wildfires throughout the industry, many consumers have been complaining about the lack of transparency with products, manufacturing processes, and ingredients (or lack thereof in products).
Amazon has taken their private label brand to new heights by putting a QR code on all of their labels. These codes will direct consumers to a website that will give them information about the product, where each ingredient came from, when it was manufactured, a certificate of analysis (COA) that no one really supplies in the industry, a FAQ area, along with images and graphs further showcasing the product and it’s benefits and many other tidbits of information.
Again, while much of this is good for the consumer, most of Amazon’s competition is not going this far to show transparency in their own lines of products. Could Amazon’s move for transparency be a hit? Honestly, I think so. But, it’s also a double-edged sword. Some companies don’t necessarily “play by the rules” and pushing transparency across the industry will ruffle some feathers if some brands refuse to comply—which could hurt their sales and potentially put them out of business. So, will Amazon’s transparency legitimize their products? Absolutely. People want to know what’s in their products these days and what Amazon is putting out there is exactly what the consumers want to see. But, with Amazon only playing in the vitamin/mineral space currently, the supplement industry has some time to rethink their strategy and potentially make the move to be more transparent or potentially be left in the dark if their competition makes the move first. It’s a fine line that brands will be walking. Do they start planning ahead, or do they hope the new Amazon line will have them falling on their face before it truly takes off? Time will tell.
Will this move piss off Amazon’s current partners?
I can’t speak on their behalf, but if I were a brand and was selling to Amazon to get my products out there and I found out they started a brand to compete with mine, I’d be a little pissed off. While it might create more of an interest in general and potentially help the brand’s sales, it could go in the opposite direction and Amazon could convert the customers over to their own private label line.
There are many unknowns left to be seen with Amazon’s new private label brand and the impact it will have on the industry as a whole. I, for one, will be sitting back watching this very carefully to see how it plays out.
I think it’s clear to say that Amazon has become the elephant in the room lately when it comes to supplements. Not only are they stealing share from ecommerce supplement retailers across the globe, but now they decided to dabble with their own supplement line and put a full court press on the industry. What does this mean for their website, the competition, and the market?
Cannonball!
Amazon is jumping into the deep end to see if they can create a bigger splash than the competition. They obviously have the name, but is that enough to carry the sales on their back? Bodybuilding.com has been known as the big gorilla of the industry in terms of online sales, yet their numbers seem to keep slipping and their executives keep bailing out. Could the writing be on wall for their website and is it true that Amazon is truly putting a hurt on the competition? The answer is YES!
When I was with MET-Rx, a topic of conversation that seemed to be regular was how they can compete with the likes of Amazon in the space. Bodybuilding.com just never seemed to get a grasp or understanding as to how Amazon could consistently crush them on price and then offer free shipping on orders. It was almost like Amazon was using the supplement industry as a lost leader on their site. If they could engage the supplement user, and have them purchase other higher-margin products on the site, it might work out in their favor. Or, maybe they are smarter than we thought and had a plan to get into the supplement industry all along and wanted to build their customer-base first before they started their own line? Either way, if I were ecommerce sites or supplement brands, I’d keep a very close eye on what Amazon is doing over the next several months and plan their strategy moving forward accordingly before it’s too late and they’re shuffling to quick make a change.
The old Bodybuilding.com model almost seemed prehistoric when Amazon started getting into the supplement market and selling products on their website. It seems like Amazon knew exactly what the consumer wanted and give it to them. Now you can order your favorite protein, use Amazon Prime, and have it at your door in two days or less along with any other household item you could possibly want under the sun. Amazon is becoming a full-blown beast across many industries.
So, not only has Amazon clubbed the competition over the head, but now they want to go after the supplement market with their own private label named Amazon Elements—which actually isn’t new.
Amazon isn’t opening the door, they’re kicking it down
Back in 2014 Amazon started their private label brand when they came out with and launched their own line of baby products—specifically baby wipes and diapers. I only know this because we had a baby the same year which peaked our interest in possibly trying out their new line of products. Unfortunately for Amazon, their baby products didn’t set the world on fire. In fact, the only product that they ended up keeping were the baby wipes. Despite their failed baby line, jumping into the supplement market, while nowhere in the same realm of baby products, seemed like a very good idea for them. Their online supplement sales are growing year over year, and with their new initiative to do more in the space, it only seems reasonable that they would give their own private label line a shot.
As of right now at the time of writing this, Amazon is only dipping their toes in the water to get a feel for how well the brand will sell. If it’s anything like their baby line, the products might fizzle out fairly quickly, but only time will tell. For the time being, Amazon is only releasing four products on their website: Calcium Complex, Turmeric Root Extract, Vitamin D2, and Vitamin K2. These products are only available to my knowledge through the Amazon Prime program.
The packaging of the product is pretty basic, but I’d assume that is on purpose to make it look like a mass type of product versus anything hardcore like some brands in the market, and yes, there are plenty of brands out there who have “hardcore” vitamins and minerals which is kind of laughable. But, the Amazon Element labels are black with a transparent smoke colored bottle and black lid. There’s some color on the label dependent on the product, but other than that, the labels are fairly bland.
What does this mean for the sports nutrition and supplement market?
Right now, while some should be worried, I wouldn’t say there is a need for panic. We saw what happened to their baby line of products, and the same could happen to their supplement line. While the products released aren’t going to hurt most of the big players in the supplement industry, it will surely hurt some of the online retailers who sell similar products.
For years Amazon has dabbled with minimal margins and have quickly realized that the supplement industry carries some great overall margins on privately labeled products. Amazon has also done their homework and knows that the online market over the past several years has exploded and brick and mortar locations are hurting across the nation. More and more people are going online in search for their vitamins and supplements. It’s convenient to not have to leave your house to pick up your favorite supplements. Look at one of the most recognized retailers out there—GNC. They completely re-positioned their business model in hopes to regain some of their customers they lost to the internet. Will they succeed? I don’t think so, but they could prove me wrong.
Amazon has a HUGE customer-base already and with this addition of a supplement line, they are looking to pick away at some of the low hanging fruit out in the marketplace and see what share they can steal with the customers who already shop on their website. Let’s be honest, if you are new to the supplement industry and are looking to pick up some products based off of your doctor’s recommendation, would you trust company XYZ that you never heard of or Amazon? If you’re a loyal shopper to Amazon, the choice is an easy one.
Is the line what the industry needs?
In case you were living under a rock, let me fill you in on something. The supplement industry has been under the microscope lately and lawyers as well as the FDA have had their finger on the pulse here of late. With lawsuits spreading like wildfires throughout the industry, many consumers have been complaining about the lack of transparency with products, manufacturing processes, and ingredients (or lack thereof in products).
Amazon has taken their private label brand to new heights by putting a QR code on all of their labels. These codes will direct consumers to a website that will give them information about the product, where each ingredient came from, when it was manufactured, a certificate of analysis (COA) that no one really supplies in the industry, a FAQ area, along with images and graphs further showcasing the product and it’s benefits and many other tidbits of information.
Again, while much of this is good for the consumer, most of Amazon’s competition is not going this far to show transparency in their own lines of products. Could Amazon’s move for transparency be a hit? Honestly, I think so. But, it’s also a double-edged sword. Some companies don’t necessarily “play by the rules” and pushing transparency across the industry will ruffle some feathers if some brands refuse to comply—which could hurt their sales and potentially put them out of business. So, will Amazon’s transparency legitimize their products? Absolutely. People want to know what’s in their products these days and what Amazon is putting out there is exactly what the consumers want to see. But, with Amazon only playing in the vitamin/mineral space currently, the supplement industry has some time to rethink their strategy and potentially make the move to be more transparent or potentially be left in the dark if their competition makes the move first. It’s a fine line that brands will be walking. Do they start planning ahead, or do they hope the new Amazon line will have them falling on their face before it truly takes off? Time will tell.
Will this move piss off Amazon’s current partners?
I can’t speak on their behalf, but if I were a brand and was selling to Amazon to get my products out there and I found out they started a brand to compete with mine, I’d be a little pissed off. While it might create more of an interest in general and potentially help the brand’s sales, it could go in the opposite direction and Amazon could convert the customers over to their own private label line.
There are many unknowns left to be seen with Amazon’s new private label brand and the impact it will have on the industry as a whole. I, for one, will be sitting back watching this very carefully to see how it plays out.
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