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.

Comments

It should have been obvious.

[subk]

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.

Re:It should have been obvious.

[freeze128]

Nothing to see indeed! A summary of who Quidsi is and what they do would have been helpful.

Re:Not a surprise for those who sell 3P on Amazon

[Qzukk]

any attempt to abuse market power will lead to Amazon being uncompetitive in the market

As long as you only define "abuse market power" as "charge too much".

Just a minute, I'm getting new orders from Bezos... if I want to keep buying products from Amazon, I need to park my car to block you in whenever possible.