Why is Amazon cutting back on its in-house clothing brands?

Amazon once dominated private-label fashion, but now it's scaling back. Many brands are leaving, and private labels are struggling. What happened?

Amazon is cutting back on its in-house clothing brands due to weak sales, increased competition, and regulatory pressure. Customers prefer well-known brands, and Amazon’s private-label strategy has failed to gain traction.

Amazon’s plan to control fashion retail backfired. Now, it’s focusing on third-party sellers instead. Let’s explore why brands are leaving and why private-label fashion struggles.

Why are brands leaving Amazon?

Amazon once seemed like a goldmine for fashion brands. But now, many are pulling out. Why?

Brands are leaving Amazon due to high fees¹, strict policies, counterfeit issues², and lack of control over their brand image. Many companies prefer to sell directly to consumers rather than relying on Amazon.

Stacked Delivery Packages

Rising Fees and Profit Margins

Amazon charges sellers listing fees, fulfillment fees, and advertising costs. These eat into profits. Many brands realize that selling directly through their websites or other retailers is more profitable.

Counterfeit and Unauthorized Sellers

Fake products flood Amazon, damaging brand reputation. Unauthorized sellers list products at lower prices, undercutting official brand stores.

Brand Control and Customer Relationships

Selling on Amazon means limited customer data. Brands can’t build relationships, send marketing emails, or upsell directly. Many opt for Shopify or direct-to-consumer (DTC) websites instead.

What is the issue with Amazon private-label?

Amazon launched many private-label clothing brands to compete with retailers. But they’re now cutting back. Why?

Amazon’s private-label clothing³ struggled due to weak branding, low consumer trust, and competition from well-established brands. Customers don’t seek out Amazon fashion the way they do for Nike or Levi’s.

Lack of Brand Recognition

Amazon’s private-label brands have generic names like "Goodthreads" and "Daily Ritual." Customers don’t recognize them, and they don’t build loyalty.

Algorithm Overload

Amazon relies on data-driven product launches. But clothing isn’t just about data—it’s about style and brand identity. Amazon failed to create a strong fashion image.

Third-Party Seller Competition

Many independent brands on Amazon offer better styles, quality, and branding. Customers often choose these over Amazon’s in-house brands.

Why don’t big brands sell on Amazon?

Amazon has a massive customer base. So why do major fashion brands avoid it?

Big brands don’t sell on Amazon because they want to control pricing, branding, and customer experience. They also worry about counterfeits and unauthorized resellers undercutting their prices.

Price Control and Discounting

Amazon encourages discounting, which hurts brand value. Luxury brands, in particular, avoid Amazon to maintain exclusivity.

Knockoffs and Counterfeits

Nike left Amazon in 2019 due to counterfeit issues. Many brands prefer selling through their own stores, where they can guarantee authenticity.

Customer Data and Loyalty

Selling directly to customers allows brands to collect data, personalize marketing, and build brand loyalty—things Amazon doesn’t allow.

Is private label on Amazon worth it?

Many entrepreneurs try to launch private-label brands on Amazon. But is it a good business strategy?

Private-label selling on Amazon can be profitable, but it requires strong branding, excellent product differentiation, and a solid marketing strategy. Without these, success is unlikely.

Challenges of Private-Label Selling

• High Competition – Thousands of sellers launch private-label brands every year.
• Amazon’s Own Products – Amazon competes directly with sellers in many categories.
• Rising Ad Costs – Without ads, products get buried in search results.
• Low Brand Loyalty – Customers often buy based on price, not brand name.

When Private-Label Can Work

• Unique Products – Differentiation is key. Generic products fail.
• Strong Branding – Logos, packaging, and marketing should build customer trust.
• Off-Amazon Sales Channels – A website or social media presence helps avoid total reliance on Amazon.

Conclusion

Amazon’s private-label clothing struggled due to weak branding, high competition, and shifting market trends. Brands are leaving because of fees, counterfeits, and lack of control. While Amazon is still a major e-commerce platform, its private-label fashion experiment didn’t work out.