> When a grocery store makes its own novel product and puts it on the shelf, it's taking a risk. If they make those products, but they don't sell, they just lost a bunch of money. Or, if their product is a competing one with an existing product, they know that products like that can sell, but now they have to focus on outselling the original product. When Amazon makes its own product, most of the risk has been removed.

The grocery store's risk on store branded products is about the same as Amazon's risk for Amazon brand products. They have the data to know what sells and what doesn't, they have control of the store layout, and they also have pricing data. There's really no major differentiation besides the physical store front and how manufacturers "rent" space.