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Amazon Wants To Curb Selling 'CRaP' Items it Can't Profit On, Like Bottled Water and Snacks: Report (wsj.com)

Posted by ryuzaki0 on from the tough-luck dept.

Amazon is rethinking its strategy around some items it sells which it calls internally "Can't realize a profit" -- or "CRaP" for short, according to the Wall Street Journal. From the report: Inside Amazon, the items are known as CRaP, short for "Can't Realize a Profit." Think bottled beverages or snack foods [Editor's note: the link may be paywalled; alternative source]. The products tend to be priced at $15 or less, are sold directly by Amazon, and are heavy or bulky and therefore costly to ship -- characteristics that make for thin or nonexistent margins. Now, as Amazon focuses more on its bottom line in addition to its rapid growth, it is increasingly taking aim at CRaP products, according to major brand executives and people familiar with the company's thinking.

In recent months, it has been eliminating unprofitable items and pressing manufacturers to change their packaging to better sell online, according to brands that sell on Amazon and consultants who work with them. One example: bottled water from Coca-Cola Co. Amazon used to have a $6.99 six-pack of Smartwater as the default order on some of its Dash buttons, a small device that allows for automatic reordering with a single press. But in August, after working with Coca-Cola to change how it ships and sells the water, Amazon notified Dash customers it was changing that default item to a 24-pack for $37.20.

6 of 222 comments (clear)

  1. Bottled water... by b0s0z0ku · · Score: 4, Interesting

    I don't get it -- much of the US outside of places like Flint, MI already has a reliable water delivery system. Trucking it in via tiny bottles is pretty silly.

  2. I ordered a "pallet" of soda by Anonymous Coward · · Score: 5, Interesting

    During cyber week, I found 12 packs of Fanta Grape on sale for $3.99 on prime pantry. I ordered 100 of them just to see what would happen.

    Amazon is so inefficient that they actually sent 100 individually-boxed 12-packs. Plus I got free shipping.

    Talk about "can't realize a profit." Their own stupidity probably cost them well over $1000 in shipping on a $400 order of soda.

    1. Re:I ordered a "pallet" of soda by LostMyAccount · · Score: 5, Interesting

      That reminds me of a (probably urban legend) story about a guy who was building a masonry building in a remote location. It was fantastically expensive to ship the masonry in. The location did have postal delivery, and the guy figured out he could flat-rate ship individual blocks for a total amount that was much less than regular shipping, so he wound up mailing them.

  3. The Truth? by bigpat · · Score: 4, Interesting

    Dear Amazon, How about, for Prime Customers especially since you now have Whole Foods and other local brick and mortar stores, just tell customers when they are better off driving over to Whole Foods. If you know who we are, where we are shopping from then how about give us a break and straight up tell us when we can find a better price local without the overhead of curbside shipping.

    Some things will likely always be cheaper to ship bulk and then pick up local.

    Thanks,
    Pat

  4. Remember the 2nd rule of acquisition by DontBeAMoran · · Score: 4, Interesting

    Rule of acquisition #2: "Never spend more for an acquisition than you have to."

    Amazon used to have a six-pack of Smartwater for 6.99$.
    Now it's going to be a 24-pack of Smartwater for 37.20$.

    So either the size of the bottles has changed or each bottle of Smartwater will now cost 1.55$ instead of 1.17$, which is a 32.5% price increase.

    --
    #DeleteFacebook
  5. Locally optimal is ultimatly bad for business by WaffleMonster · · Score: 3, Interesting

    Most stores don't have the luxury of selling only items that make them the most money. They have enough sense to understand if they did that the buyer will just go somewhere else where they can get everything they want and end up buying NOTHING at the store giving the customer a hard time.

    But this is Amazon we're talking about. The same company that intentionally slows down shipping to uncompetitive levels (2-day is Free @ Walmart, most eBay purchases arrive before Amazon even ships) imposes minimum purchase requirements, prevents non-members from purchasing certain items commonly available elsewhere (e.g. Star Wars DVDs). Perhaps the rules don't apply to Amazon today but eventually they will.