With Amazon’s explosive growth, it’s easy to lose sight of the fact that Walmart is still, by a long shot, the world’s largest retailer. In 2017, Walmart WMT recorded sales worth $485 billion and earned a profit of $13 billion. Amazon recorded revenues at $178 billion with profits of $3 billion.
While Amazon’s growth trajectory is aimed at overtaking Walmart sooner versus later, they are still the new kid on the block, and in many ways chasing a low margin, slim profit model that was all but invented by Walmart. And that includes adopting strategies that help them to increase profits without increasing prices. Enter, private-label brands.
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