Amazon.com has been quietly building a private label strategy for the last couple years, creating house brands around kitchen tools (Pinzon), outdoor furniture (Strathwood), bed and bath products (Pike Street) and power tools (Denali). Now the online retail giant is adding consumer electronics to the mix, with the launch of a new brand called AmazonBasics.

So far, AmazonBasics' selection is fairly modest, consisting of a small number of cables and blank DVDs and CDs. But presumably Amazon will continue adding items to the mix. Amazon, in embracing private labels, is following the path of such brick-and-mortar chains as Wal-Mart and Costco, which offer their own discount house brands. Private labels have the potential for higher margins, since they eliminate the middleman in the supply chain. They also appeal to bargain-hunting shoppers in the recession.

House brands also create competition with third-party retailers who sell products on Amazon, which could become an issue for Amazon.

I ran across a series of Amazon trademarks for the term "Amazon Basics" this summer, and speculated at the time that it might have something to do with the company's private label business, so it's interesting to see Amazon launch the brand today.

In a sign of how seriously Amazon is taking its private label products, the company recently patented the design for a kitchen chopping block that is now part of its Pinzon line.

Update: Amazon just put out the official press release on AmazonBasics, confirming it plans to add other items to the brand "in the coming months." The company will ship AmazonBasics products with frustration-free packaging, its service that packs products in smaller, easy-to-open cardboard boxes.

The New York Times explores Amazon's private label business, and its steady expansion into new product categories, in a story that asks, "Can Amazon Be Wal-Mart of the Web?" The Times notes that Amazon's worldwide sales of general merchandise may be soon be bigger than its sales of books, CDs, and other media products -- a sign that the company is becoming "the world's general store."

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