Amazon Wants To Curb Selling 'CRaP' Items it Can't Profit On, Like Bottled Water and Snacks: Report (wsj.com)
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.
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.
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.
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.
Lando Calrissian: That wasn't part of the deal! You said the $6.99 six-pack of Smartwater was the default order on my Dash button!
Darth Bezos: I am altering the deal. Pray I don't alter it any further.
Taking guns away from the 99% gives the 1% 100% of the power.
Wasn't Amazon trying to get into the grocery delivery business? I can imagine there are lots of items in grocery that would be unprofitable especially when delivery is factored into the cost.
Well, there's spam egg sausage and spam, that's not got much spam in it.
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
Lewis Black on bottled water
but Amazon's the #1 place for odd ball snacks and assorted dry goods. Plus there's bulk. I buy curry mix from them because it's 1/3 the price I pay in town, but I buy it bulk. I can't imagine they don't make profit on that. Maybe they mean a generic thing of pretzels. Are folks actually buying that?
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Amazon should use their other playbook and just start selling their own Smartwater (TM) forcing the Coke Dealers out of business. And even when they sell it at a tenth of the price, they'll still finally make money on something else besides AWS.
Of course news about a fake are Fake News.
Just what Amazon needs, more profits. How long before Amazon gets too big and bloated seeking more and more profits that an upstart comes in doing what Amazon used to do and steals all the business thus restarting the cycle?
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Are you really this stupid? PROFIT is the money the business EARNED. Exactly how do you think a business can EARN money without making a profit?
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.
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But they, like Google have got to be broken up. Sorry Microsoft, Apple is more of a monopoly than you.
I can hear Bill Gates crying over that.
Corporatism != Free Market
I think it’s been pretty obvious for years that a lot of what Amazon sells is crap.
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Amazon is weaning themselves off of the USPS. I expect the post office's finances will look a lot worse when Amazon is out of the picture.
It's insane to use Amazon logistics to deliver beverages. That shit is all shipping costs, and Amazon will never compete with large scale grocery deliveries.
In a lot of places the tap water can taste funny even if perfectly safe - lots of people canâ(TM)t be bothered to filter their own. Bottled water is at least usually consistent in taste... so a lot of people buy it for various things (like travel or events).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I realize its not exactly the CRaP issue but it might be what shoves some products into that category. I use Prime alot because even Walmart means a 25 mile round trip here. So having stuff delivered is usually great value proposition for me in terms of my personal time and my own costs in driving to go get stuff.
Some of Amazon's packaging choices however are atrocities. I have lost count of the number of times I have got a shoeboxed sized or larger carton packed with bubble wrap when a padded envelope would have been fine. Padded to keep the product from puncturing the envelope not protect the product it from damage.
That and Amazon always uses bubble wrap, never paper? Why not paper Amazon - cheaper and more environmentally friendly (and I could use it for kindling like I already use your boxes!)
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The post office cannot make a profit because what they owe to the previous retirees is too much.
If the post office raises prices such that the can make a profit and pay for the retirees then the lose all of the business to UPS/Fedex because the price is too high compared to their competitors. The reality is they undercharged 20-30 years ago and did not pay for benefits they promised as they were going. If they attempt to pay for the retirees and make a profit, they *WILL* go out of business and will cease to exist or end up getting bailed out by the US government.
It is really the same problem most of the big US corporations have, they promised benefits/pensions in the past and never worried about paying for it then, but now when it comes time to pay for it they cannot as they promised too much and did not save anything for the future costs.
What kind of idiot would spend $1.55 for a bottle of water - especially when purchased by the case? The original price of $1.17 per bottle in the 6-pack was already overpriced.
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A business is organization, providing efficiency, lowering the total cost to supply something. Some people think a business is overhead and that artisan, hand-made everything would somehow be cheaper.
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I used to get 40 lb of cat litter with amazon prime for around $15. but a year or so ago, they stopped selling my brand for about 6 months (presumably coming to their senses) but then started selling again. I never understood how they made any money off that after paying for shipping. maybe this is what Trump was talking about -- maybe the USPS made some kind of weird deal where they delivered for a fixed rate no matter how much the thing weighed ...
Amazon is weaning themselves off of the USPS. I expect the post office's finances will look a lot worse when Amazon is out of the picture.
very true. Analysts belive the USPS actually makes a profit off of Amazon. Losing Amazon will remove a revenue source without a simialr drop in cossta s they still will drive by every house every day. It's not just USPS that will be impact, FedEx as well since FedEx is the airline that carries US Mail. Amazon, once it has its delievry sysetm and logistics all in place, will probably start shipping services as well. After all, they'll have the hubs, trucks, and planes in place, why not move stuff both ways.
I'm a consultant - I convert gibberish into cash-flow.
I thought bottled water was bad enough, but mail ordered bottled water?
What's the shipping cost of the words tiniest violin?
Wish I had mod points. You are so right about the plastic. Last time I was at a baseball game, I bought one bottled water. But I then kept filling up that bottle through out the game. I also know that the baseball park that I was at is very huge into recycling. Food for the homeless, recycling, part of their energy is solar.
Anonymous comments are as pathetic as the anonymous "sources" that contaminate gutless journalism from the New York Time
???? the USPS is the only company forced to account for pensions this way.
if the workforce remains stable in size there is no problem. since the USPS has to physically drive by every house every day their workforce will remain stable unless its function is positively gutted.
USPS also charges far less than postal services from similar countries like Australia, Japan or the UK. however the USPS is not allowed to raise rates. the USPS could easily pay for whatever bullshit pension accounting charges if it could raise its own rates.
the USPS is pretty much engineered to go out of business to serve republican interests.
Find a grocery store, value the newfound savings. Perhaps you are homebound, at least around here in the suburbs the major grocery stores will also deliver the same day to your door or kitchen.
Destroy the people that were selling it at a profit and then when they are gone raise prices.
At least for the bottled water part. Maybe this will push some people to use a filter (where necessary, Flint I'm looking at you) and just begin to reduce the amount of plastic in our toilet...I mean the Pacific ocean.
Not sure how much its improved but Flint was waaay past end-consumer water filters at the worst.
The plastics waste in the Pacific is due more to Asian countries than the US: https://www.cnn.com/2016/07/06...
In Amazonian lore, the long tail is the killer Godzilla of lost leaders.
You come for the long tail, you leave with a flying carton filled with All the Usual Retail Suspects (AuRS).
And now here comes Bezos all in a huff, treading on his own tail after a sharp 180, having finally nosed his way to the realization that dragging a long, flashy appendage along in the dirt behind the poop orifice was never a genius design in the first place.
After cherry-picking all the profitable items, if you leave only the CRaP to the grocery stores, it will be expensive there too.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
To get free shipping for items in Prime Pantry, you have to order more than $35 worth of stuff. Or pay $5.99 in shipping if you order less than $35 (even with Prime membership).
The story here seems to be that Amazon's employees who are supposed to categorize which items go into Prime Pantry are doing such a poor job, that they're letting some items slip into their regular delivery system.
Both is and is not see the blurb from wikipedia. The USPS is often mistaken for a government-owned corporation (e.g., Amtrak) because it operates much like a business. It is, however, an "establishment of the executive branch of the Government of the United States", (39 U.S.C. 201) as it is controlled by Presidential appointees and the Postmaster General. As a government agency, it has many special privileges, including sovereign immunity, eminent domain powers, powers to negotiate postal treaties with foreign nations, and an exclusive legal right to deliver first-class and third-class mail. Indeed, in 2004, the U.S. Supreme Court ruled in a unanimous decision that the USPS was not a government-owned corporation, and therefore could not be sued under the Sherman Antitrust Act
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.
Yours [WCMI92's] comment is one of only two that mentions the most insightful word on this topic: "monopoly". Nothing substantive to merit a mod point, even if I ever saw one to give. Mostly replying here from curiosity. Your sig suggests insight, but the Subject: suggests sucker. Perhaps it's a reversed satirical Subject:?
However, I'll throw out a rehash of my suggested solution approach: Change the tax system to make it pro-freedom, anti-greedom. What we have now is a system where the best bribers pay off the cheapest politicians to rig the game in favor of the biggest corporate cancers. What we need is a system that encourages competition and choice and freedom.
My proposal (but I'd be glad to hear if you have a better one) would be a progressive tax on corporate profits based not on size, but on market share. Any company that eliminates the other choices would get taxed accordingly, with part of the bonus taxes going (1) to regulating the monopoly and (2) for research into ways to break the monopoly.
Enough time spent for now, but ADSAuPR, atAJG.
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
It's obvious that bulk shipping some items is more efficient than individually shipping items. If there's enough demand for an item to ship it by train car, boatload or, truck load to an area, the cost of that shipping will be fractional to the cost of UPS / USPS / FedEx delivery. Bulk staple items like bottled water, toilet paper, paper towels, sodas, milk, laundry detergent, etc are just not good targets for Amazon.
With curbside pickup at Walmart, Target, and grocery stores now, it's arguably easier to stop by the store on the trip home and load up those items. Cuts down on packages left outside your doorstep that can be stolen.
Amazon just needs to rebrand this brick and mortar process. Call it 'AI PreShipping', Amazon can leverage their AWS power to analyze regional shopping characteristics and PRE-Ship your items to your convenient PRE-Ship Storage Location (re-branded from Whole Foods). As your Pre-Shipping items will be stored at our facility, rent will be covered by your Prime Membership.
The tap water in my area isn't bad, just water: I assume if I don't notice flavor it's OK.
Certainly not unhealthy.
Yet I constantly see families from the poor part of town hauling off large water bottles from those machines in front of laundramats selling "non ionized/alkaline water".
They would appear to be the last people who could afford to buy water, but there they are standing in line doing it.
Unless their house/apartment water is godawful, I don't get it. The places they're living aren't more than 20 years old.
Don't you hate it when you open the tap and all the stuff in the room gets sucked into the faucet?
Of course that's not what happens, water pipes are under pressure, so when there is a leak water seeps OUT, "stuff" doesn't seep in.
ust begin to reduce the amount of plastic in our toilet...I mean the Pacific ocean.
Don't throw your plastic into the ocean. Problem solved. It's not like plastic migrates from the landfill to the ocean for the winter.
Socialism: a lie told by totalitarians and believed by fools.
Printed. The money stays an "author", "printer" and "publisher".
Are heavy or bulky?
But profitable to grow brand on?
Domestic spying is now "Benign Information Gathering"
Why don't they just dehydrate the bottled water. Saves a lot on shipping...
I am not a robot. I am a unicorn.
Earned can be interpreted as revenue and revenue is not profit. Profit is revenue - expenses. So you could earn money as a business and still overrun your cost and would therefore not make a profit.
That's how a business could EARN money without making a profit.
Amazon is profitable for the USPS. Only a moron would think otherwise. It's actually against the law to lose a profit on USPS parcels.
That is the dumbest definition of earned ever. Earnings are monies received for labor or service. If all of your revenue goes to your expenses then you have earned exactly $0, because you have no money for your labor or service. By definition, earnings and profits are the same thing.
My cat was very picky, wouldn't use the cat box unless the litter was unscented. Our local stores didn't carry any decent unscented litter, so we bought it on Amazon, for $7 for a 40 pound bucket, delivered free in two days.
Amazon eventually figured out that this wasn't working for them, so they changed it to an "add-on item," requiring you to buy $35-worth of stuff for it to qualify for Prime. So I bought 5 buckets. The delivery guy wasn't too happy, but I got my cat litter!
I guess I'm the classic accounting sense, earnings is not specifically revenue, however it is specifically not profit. That is a different number. When companies report "earnings" as part of quarterly/annual reports, it is often understood that to be all the numbers including revenue and profit.
Well, there's spam egg sausage and spam, that's not got much spam in it.
The actual 'earnings' they report ARE the profit (or loss). The earnings report does contain other numbers (such as revenue) that are used to help understand the earnings, but that additional information is NOT 'earnings'. 'Earnings' do not always refer to exactly the same thing (sometimes they are reported as 'after tax', sometimes pre-tax, sometimes 'after interest', etc), but they are ALWAYS some measure of profit, and NEVER revenue.
Among other things I get 6 cases (12 ea) of SoBe LifeWater, and 3 cases of Ocean Spray Pact water delivered, because it's easier than going to the store myself. Getting them brought nearly all the way home, a variety of flavors, and a good price. It's a clear win for me.
Every month I am amazed at what stupid new tricks Amazon comes up with to make sure they lose money on the transaction. Aren't they supposed to be logistics geniuses? The order I get from them is routinely split into multiple shipments, sometimes multiple shipments on the same day, from the same Amazon warehouse 10 miles away. The most recent order included 2 of the cases being shipped via UPS instead of Amazon delivery even. That can't have been profitable.
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