The Symbiotic Relationship of Private Label Amazon Sellers and YouTubers

By Jonathan Timar
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Here’s something you may or may not know about Amazon: there is an absolute tonne of private label stuff on there.

Notice I said “stuff” and not “crap”, which was my first instinct. That’s because a lot of that “stuff” is actually pretty good. But…

It’s only pretty good in relation to how much it costs. It’s pretty good when the price performance ratio remains high. But I have noticed a pattern developing, and it works like this:

  1. Private Label Company X appears out of nowhere selling a much, much cheaper alternative to popular product in a normally expensive niche.
  2. Private Label Company X distributes free product to reviewers, primarily on YouTube, who proceed to offer totally unbiased reviews (“I am not sponsored by Private Label Company X, but they did give me this product for free…”).
  3. As a result, Private Label Company X’s product skyrockets in popularity, and the price does too. And in many cases it ends up costing nearly as much (or even more!) than the name brand product that inspired it.

And that is the point when I start to get annoyed. Because these products, even when they are good, have NO BUSINESS costing as much as the established name brands that manufacture their own products. They just don’t.

Alibaba Private Label
Alibaba Private Label

Another name for private label is “generic”. I’m sure you know about the generic brand at the grocery store. Sometimes it’s just as good as the name brand, sometimes it’s not. But it’s ALWAYS cheaper than the name brand, otherwise no one would buy it.

But that’s not the case on Amazon. For example, products that look suspiciously identical to the one in the picture above are being sold on Amazon under multiple different brand names as “artist grade” coloured pencils for $50 to $100 (Canadian). That’s just ridiculous for a product with a wholesale cost of less than ten bucks.

And how is this possible? Well, to be frank, as near as I can tell it’s almost entirely the result of YouTubers getting free stuff and saying nice things about it.

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    To be perfectly clear about something: I don’t think there’s anything wrong with what YouTubers are doing, as long as they are being honest about their impressions of a product. I have purchased numerous products on the recommendations of YouTubers, and I can’t think of any I’ve been unhappy with; but that’s because the price was in line with what the product was worth, or often seemed like a steal. And I doubt most of them are even aware that they are reviewing a generic product that’s being sold under a dozen brand names or more.

    But I do have a bit of an issue with companies misrepresenting these generic products and their own “premium” items and then jacking up prices to ridiculous levels once their brand gets some notoriety.

    Here are a few signs that you are dealing with a private label generic item that’s been marked up way, way more than is reasonable:

    1. It’s exclusively sold on Amazon (and maybe eBay). This is pretty much a dead giveaway. If you can only find the item on Amazon or the “manufacturer’s” website, it’s almost certainly a private label generic.
    2. The company’s website sucks. This one is not such a dead giveaway. Some of the more popular private label brands have rather slick websites. But a lot of them have very bare-bones websites with almost no product information, no address, no phone numbers, no company history… You get the idea.
    3. There are several other items that look similar if not identical on Amazon. This one is self-explanatory. If point one also applies…
    4. Really inconsistent Amazon reviews. It’s normal for there to be some outliers In Amazon reviews, but if there is a pattern of mostly glowing reviews with a few that basically amount to “WTF?”, start asking questions. I think this happens because when these products are new they attract a lot of inexperienced users who don’t know what they are comparing to, and they reviewed them when they were cheap. Later, more experienced people come along and the price has gone up and they have a different impression. I also think the product quality might actually be very inconsistent. These items can be completely customized, and there’s no guarantee that one batch is the same as the next, or even from the same factory.
    5. You’ve never heard of the brand before, but there are lots of reviews on YouTube. Need I say more?
    6. Shockingly good customer service. What? That’s good, right? Well, yeah, but if it’s too good you should ask why. Here’s what “too good” looks like: You bought an item for $100 bucks, and it has a defect. Solution? They send you an entirely new $100 item and let you keep the old one. What kind of company can afford to do that? Companies selling $10 items for $100.
    7. The brand name does not match the place of where it was “Made In…” Just a totally random example here, but if a product is that is rather similar to a famous name brand that’s made in Germany has a German name but is made in, er, Not Germany, that’s a bit of a hint right there.

    Just to reiterate, even is all of the above is true, that doesn’t mean it’s a bad product, *if* the price is right. But if it’s creeping up, think twice.

    To use coloured pencils (colored pencils for Americans) as an example, one particular brand that gained massive popularity over the past couple of years, thanks to YouTube, is now selling for the same price on as Prismacolor. That’s not reasonable. I’ve tried these pencils. They were great at half the price, and they have a very nice fit and finish. They *look* like a better pencil that Prismacolor, but they aren’t, and they should not cost just as much.

    Amazon Name Brand Versus...
    Amazon Name Brand Versus…

    The old adage “if it sounds to good to be true, it probably is” applies here, but this really dumb adage that I just made up also applies: “If it’s kinda pricey but you’ve never heard if the brand before, just buy the name brand”.

    This article does not contain any affiliate links, mostly because I was too lazy to add them.