I have wondered the same thing every time this question comes up. It seems the difference is that the companies that put products in grocery stores are very large companies that spend a huge amount on marketing themselves (e.g. P&G, General Mills). So, the "house brand" is less recognizable to consumers and sells at a discount to the known brand that is often a larger company than the grocery chain. The grocery stores need the name brands because shoppers come looking for them (and Safeway gets the benefit of all the marketing they do). In Amazon's case, they are serving as a distribution channel for many, many small brands, none of which are known as well as Amazon (whereas Kellogg's cereal is better known than Safeway). That changes the power dynamic in favor of Amazon.
I had a friend who worked at a milk factory. They took their 2% organic milk and piped it into cartons with different labels: brand names as well as store brands, off to be sold at various price points.
To his company it didn't matter at the end of the day if people bought the brand name or the store brand, it was all the same stuff.
I think you’re totally right. In addition/corollary, it seems a lot of the things Amazon Basics sells are basically commodities. If you have a million iPad stands, eh, just buy the amazon basics one, it’s probably not crap and the reviews look good. I need my stand, my USB adapter, my cable, my whatever to just, “do the job”, there’s not a whole lot of performance differential within the category beyond works/doesn’t work. If there’s a strong quality differentiator in the product I think they’d do less well and I bet their data scientists have answered that question one way or the other.
This also points to a hidden advantage Amazon has which is totally unethical. Namely, Amazon is perfectly willing to sell counterfeit name-brand goods, and presumably this doesn't extend to their own Amazon Basics products.
I don't think this singlehandedly explains why Amazon is so unwilling to do anything about their huge counterfeit problem, but it's suspicious that the dilemma resolves in their favor.
