Amino Z's CEO on winning big in the private label industry and brand reputation

In recent years, private labels have been winning over consumers as they tighten their purse strings due to the global economic recession. A Capgemini report showed 65% of consumers now prefer cheaper private-label products over national brands as the demand for cost-saving options surges.

But will this private-label boom be a short-lived one? Are consumers shifting over only because of cost factors and once the crisis abates, will they go back to buy their preferred brands?

Amino Z, an information-based health and fitness website founded in 2006, has evolved into a prominent retailer and manufacturer of sports supplements- offering many private label products, supplemented with national brands. Jay Bonaretti, its founder shares the secrets for private label product success when competing with other powerhouse brands – the rights, the wrongs and the opportunities in Australia.

As a retailer, find out how you can continue to focus on your areas of expertise and enjoy the myriad benefits private labeling has to offer! Bonaretti tells us how to become a trusted brand and gain the loyalty of customers in this exclusive interview.

Having been awarded one of the Top 50 Small Business Leaders in 2022 - what was it specifically that gained you this title, how are you doing things differently from your competitors?

Honestly, it was as a result of what me and our team are accomplishing together through Amino Z. As a company, we’re all about challenging the norms, remaining agile and continual innovation. Remaining agile has allowed us to pivot our business from major challenges (COVID being just one of them) and being quick to adapt to a changing landscape. Change brings about opportunity and this is a strong belief from within our organisation.

More specifically with our current business, since COVID hit, we have repositioned ourselves as a direct-to-consumer manufacturer of sports supplements, while also selling national branded products. We were previously exclusively a retail reseller of sports supplements. The heavy investment into manufacturing did bring about substantial risk and strain on our resources, but it has allowed us to differentiate with our own unique product offering and has facilitated aggressive growth in the last few years.

Vitamins and dietary supplements is an area of consumer health that boomed since the pandemic. In an ultra-competitive eCommerce landscape, how are you getting your customers to purchase through your channel of choice as competition increases continue to rise?

We have a very strong brand reputation and we’ve been able to leverage the trust in our brand to offer an exclusive line of quality Australian made sports supplements.

Differentiating ourselves as a brand is also key. We’re certainly not alone in this space and we are up against some fierce competition. While we certainly keep a pulse on the market, our core focus is on innovation and continual improvement on what we offer our customers. Importantly, we are continually asking ourselves how we can provide more value in a different way to everyone else.

What are you doing to capture one of the biggest spending groups in history - gen Z and millennials and how are you building brand loyalty once you have them?

Core to this is our brand strategy of offering a high-quality product at an affordable price point. As we manufacture our own product, we can eliminate distribution costs and attract a more value-oriented shopper. We supplement our private label offering with national brands, many of which have strong demand from these age categories.

We have also begun to put more emphasis on various social media platforms, which honestly is a bit of a work in process. Social media is a personal weakness of mine so we’re doing a lot of experimentation in this space to figure out what works and what doesn’t.

Can you tell us about your growth strategy, why you chose to build the business from Australia (the benefits of doing so) and which other markets in Asia you’re looking to break into and why?

We’ve been operating in Australia for almost 17 years, and it is the market I am most familiar with. It naturally made sense to leverage prior existing retail-only operations and expand vertically.

While I cannot comment on our strategy with other markets, I do believe that it represents substantial risk to expand too quickly. The Australian market is strong and represents substantial growth opportunities. Our focus is on Australia and providing Aussie’s with the best value Australian made sports supplements.

How does marketing of private-labelled products differ from marketing brand-name products - what specific examples can you share with us?

Both have their benefits and drawbacks.

We’ve been marketing national branded products for many years now. While it’s far more cost effectively to acquire a customer that is already familiar with another brand (but not necessarily your company), they do tend to be less loyal to you as a retailer.

Conversely, it costs more to acquire a private label purchaser, yet they will have a higher likelihood to repurchase your brand.

These are very general guidelines and rely on the assumption that you have all the basics covered (fulfilment, customer service, product quality, UX etc).

Probably the largest key differentiator with private label marketing is that you need to focus heavily on marketing your brand, whereas the brand owners of national brands would otherwise take care of this. This is an expensive exercise and we have seen many brands in our space fail as a result of overlooking this critical aspect to their branding.

What are the challenges with private labelling as a result of the supply chain crisis and/or inflation?

Private labelling adds a great deal of complexity to your operations, especially in procurement. We have experienced significant price fluctuations in raw materials which represents substantial risk to this area of the business.

Further, supply chain challenges and product availability have presented major forecasting challenges. When both the supply chain and consumer behaviours are unpredictable, you are forced into making many assumptions. Being a data-oriented person, having so many unknowns make me extremely uncomfortable!

Frankly, we’ve had some wins and setbacks with the unpredictability of the supply chain and inflation. This has meant ordering too much (or not enough) stock and paying too much, or grabbing a bargain. It was far simpler when we were dealing only with national branded finished goods, but I love a challenge!

What do you find most valuable about being a part of eTail Australia?

For me, it’s all about the content and networking opportunities. eTail is a platform where I have the opportunity immerse myself in eCommerce to connect and learn from some extremely talented and passionate individuals.

Join Jay at eTail Australia Day 2 on the Case Study sharing “How to choose the right private label products for your business and turn it into powerhouse brands – the rights, the wrongs and the lessons” on the 16th February at 4:10pm, Sheraton Grand Sydney Hyde Park.