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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 $6.99 six-pack of Smartwater was the default order on my Dash button!
Darth Bezos: I am altering the deal. Pray I don't alter it any further.
Taking guns away from the 99% gives the 1% 100% of the power.
Wasn't Amazon trying to get into the grocery delivery business? I can imagine there are lots of items in grocery that would be unprofitable especially when delivery is factored into the cost.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Dear Amazon, How about, for Prime Customers especially since you now have Whole Foods and other local brick and mortar stores, just tell customers when they are better off driving over to Whole Foods. If you know who we are, where we are shopping from then how about give us a break and straight up tell us when we can find a better price local without the overhead of curbside shipping.
Some things will likely always be cheaper to ship bulk and then pick up local.
Thanks,
Pat
Rule of acquisition #2: "Never spend more for an acquisition than you have to."
Amazon used to have a six-pack of Smartwater for 6.99$.
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
I think it’s been pretty obvious for years that a lot of what Amazon sells is crap.
#DeleteChrome
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.
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
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.
That and Amazon always uses bubble wrap, never paper? Why not paper Amazon
I have a small bit (about 2 years) of experience on this one. I used to pack boxes for a company that shipped all sorts of hardware. (Hardware store kind of stuff, not like computer hardware.) Paper is a HUGE pain in the ass. It certainly is an effective packing material, but I can't stress enough how much overhead is involved.
We had two types: 30" wide rolls and 2'x3' sheets. (like this and this) The first problem, shit's heavy. 30-50 lbs per roll/bundle. It takes a lot of work to just move it around, it takes up a lot of space to stack it and store it. Likely Amazon's biggest problem with it, the labor costs to shove it into a box. A small-ish (6x8x4) box that's half-full of whatever takes about 3-5 feet off a roll, or 2-3 sheets off a stack. And it goes up fast for bigger boxes. I realize that doesn't sound like a lot, but if your job is to stuff 100 boxes/hour (probably more, for Amazon) that's a whole lot of paper you have to pay someone to shove into a box.
From a labor perspective, the air pillow are amazing. The rolls of feed-stock are lighter. The pillows themselves are essentially weightless. It takes a lot less effort to pull them out of the hopper than to unspool/crumple up kraft. And they take less time to shove them into a box. Their downfall, and why we quit using them, they didn't hold up well enough for the type of stuff we were shipping... They don't do well with heavy/pointy things. But I can see why Amazon would use them, a lot of the stuff they ship is already in a box.
Destroy the people that were selling it at a profit and then when they are gone raise prices.
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.
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!