Slashdot Mirror
Amazon Was Sucking in Quidsi's Inventory Over a Year Before Shutdown (cnbc.com)
Amazon's explanation last week that it was closing Quidsi because the unit was unprofitable didn't sound much like Jeff Bezos. The Amazon founder is famous for operating retail businesses at such slim margins that rivals can't compete. Quidsi employees had another reason to be surprised. From a report: As recently as late 2016, at Quidsi's quarterly all-hands meeting in Jersey City, NJ, executives from Amazon headquarters in Seattle spoke to the unit's 250-plus workers and affirmed the parent company's commitment to Quidsi's business, according to multiple people who were in attendance. One of the executives to present was John Boumphrey, Amazon's vice president who oversees baby products, and the direct boss of Quidsi CEO Emilie Arel Scott, said the sources, who asked not to be named because the meeting was confidential. Yet last Wednesday, with the first quarter coming to a close, employees were informed that Amazon was shutting Quidsi down and laying off hundreds of workers, ostensibly because the division was unable to make a profit. The diapers, toiletries, beauty products and pet care items sold by the various Quidsi brands would all be available on Amazon.com, the company said. [...] In the fourth quarter of 2015, Amazon started redirecting inventory from Quidsi's three fulfillment centers -- in Nevada, Kansas and Pennsylvania -- to Amazon's own massive network of warehouses, sources said. That process continued throughout 2016 and is still underway, two people told us. Quidsi's facilities were running out of capacity.
If I were Amazon and I bought a company who sells widgets online, I would do exactly this. It should come as no surprise when Amazon supplants the acquired company's supply-chain with their own and then closes said company. This is pretty much a no-brainer. Nothing to see here, move along.
Now, if you'll excuse me, I have backups to corrupt.
Who???
When a blackhole sucks in a star's gas, the star may well collapse from the lack of fuel and become a white dwarf. After that, it's just a matter of time before the blackhole finishes the white dwarf off.
My wife has been selling as a 3rd-party Fulfilled By Amazon (FBA) merchant since 2011. As a work-from-home mom, this keeps the majority of the items in Amazon's warehouses for quick turn-around, as Amazon mixes the 3rd party items in with their own to provide a larger catalog. As the business expanded, we began to dabble in wholesaling (buy direct from the manufacturer, list on AZ, send it to the FBA warehouse, profit) and life was good.
What we began to notice was that, on the really popular selling products, Amazon started to list their own Sold by Amazon along side the FBA program inventory. Understandable, it's their platform, their listings. Then we started going to tradeshows, and hearing from the manufacturers that Amazon was secretly buying out the same products, and we had to say no, we can't compete against Amazon on Amazon (since they take 15% of the sale when you use their listing service). Over time, we lost the pop lines, and more of our regular inventory sits and sits, waiting for the long tail.
Ultimately, what Amazon is collecting is sales data. The 3rd party sellers take the risk, make the sales, and Amazon takes a slice of the profit. At some point, they calculate if there's enough margin, and they go direct to the manufacturer and cut out the 3rd party sellers, and take all of the profit. They did the same thing with the private labeling, where they calculate which commonly produced products are in demand, and they move them into their Amazon private label system.
So, it is not surprising that Amazon is doing the same thing internally, making divisions within the company compete against one another. With their household divisions, they often deal with manufacturers directly under the Amazon Family brand of private labeling. Quidsi (as Diapers.com) sells 3rd party goods (Pampers, Huggies, etc) through wholesale contracts that Amazon would simply have better buying power over; everything the smaller division does could be managed at higher volumes by the parent company, hence lower costs and higher profitability.
...executives from Amazon headquarters in Seattle spoke to the unit's 250-plus workers and affirmed the parent company's commitment to Quidsi's business...
When high level execs come out to tell you how important you are, they are massaging your ego until they can afford to layoff/fire you. Been there, had that done to me, it sucks and we should all feel sorry for the gullible suckers at Quidsi.
Take this sig and smoke it.
Executives lie all the fucking time.
2 weeks before I was told my workplace was due to shutdown we heard from corporate head office that there are no plans to divest assets in our country.
1 week before I was told my workplace was due to shutdown I joined a project them that had just had a $150million project to build a new splitting tower sanctioned to move into detailed engineering, and I had just finished commissioning a previous $40million project on site.
The day of the announcement I heard about it on the news an hour before we were informed.
Employees are always the last to know.
Who or what the fuck is Quidsi? A quick search showed they sold diapers. Really helpful summary here.
Only the State obtains its revenue by coercion. - Murray Rothbard
Did they at least offfer these people first dibs at jobs at Amazon facilities?
Grab inventory and layout workers: Amazon does not care about workers. This is no news, we already knew that.
I agree. It is awful that Amazon is forcing. Probably at gunpoint, poor local business to list their wares on Amazons ecommerce platform. Wait, That isn't happening? Then you get what you paid for, the same way you undercut local retail shops by going online and FBA.
uhh walmart is a different proposition.
you don't get to go into walmart and put your stuff for sale on the shelves.
however, if you're selling something online now I have just 1 piece of advice: get your own product range direct from the supplier. just buy it branded differently from the factory, buy your own barcode codes - and keep selling on amazon.
if you're just buying wholesale something, how the fuck would you compete against anybody else really? I mean the factory/provider could just list their stuff directly on amazon as well - and why wouldn't they?
world was created 5 seconds before this post as it is.
As anyone who has been through a shutdown can tell you it is S.O.P. for them to tell you that everything is fine and the corporation is dedicated to supporting your business. It is nothing more than loss mitigation to prevent stock prices tanking and office supplies getting stolen.
Same AC, here.
It just seems like Amazon makes it obvious that this kind of thing is the logical conclusion for sellers like Company A, here.
It's the same way companies like Toshiba, Apple, etc. do things: contract-out the design and manufacture of a component, then, to reduce costs, they make their own version and remove the second-party vendor.
Company A makes plenty of money in the meantime. It's just not a guaranteed longtime deal.
I suppose it sucks for Company A but the customer wins (lower prices, presumably) and there is nothing really illegal about what Company B is doing. You can't patent "selling widgets.... ON AMAZON!"