Amazon is Reportedly Tired of Selling Low Cost Items

AlphaAtlas

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According to "major brand executives and people familiar with the company's thinking," Amazon is allegedly moving away from selling low cost, low profit items. "CRaP," as they call it, simply isn't worth the effort, and Amazon is either removing the "Can't Realize a Profit" items from their online store or working with suppliers to make them more profitable. For example, Coke bottle listings shifted from $7.00 6-packs to $37.20 24-packs, as Amazon worked out a deal to ship bottles directly from Coca Cola's warehouses. The report mentions that Amazon has the critical mass it needs to get away with this, as the company accounts for the majority of e-commerce, and keeping merchandise off Amazon "is not an option anymore."

Amazon is trying to boost profitability in its core retail business after years of focusing on growth, according to the people. The company's profit has risen sharply in the past couple of years, helping its stock price soar, although its market value has fallen again recently. But most of that profitability has stemmed from its growing cloud business and advertising unit. Brand executives privately say Amazon’s push for profitability can be a double-edged sword. Amazon has pressured them to lower prices and change packaging, both of which can be costly. And eliminating or changing what they sell on Amazon can hurt sales. Some executives, however, say it can help both companies.
 

GNUse_the_force

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Most the stuff outside of electronic items on Amazon (and most of that too) is complete CRaP. Got tired of returning faulty or just plain low quality items on Amazon and only buy verified manufacturer goods now. Shopping on Amazon feels like the worlds largest car boot sale.
 
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nightfly

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Wonderful. Bezos made billions by creating a very easy to use shopping site, and because that's not enough, he's going to ruin it? What a dick move. I guess he wants to join the asshole club with Gates. Not that amazon is perfect, but it's been pretty good. The tiny 'add on' items that were difficult to find pretty much anywhere, were one of the great things about it.
 

Darunion

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Welp just means more people are going to turn to Walmart. Low profit is better than no profit. I'm very close to dropping prime, as they can barely manage to get 2 day shipping right anymore.
PRIME SHIPPING
(4-5 day)

Always in that little text or once you are almost at submit order does it show you it will show up in 2 weeks.
 

OFaceSIG

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Welp just means more people are going to turn to Walmart. Low profit is better than no profit. I'm very close to dropping prime, as they can barely manage to get 2 day shipping right anymore.
Where do you live? I live in a northern suburb of Dallas, surrounded by fulfillment centers. I sometimes get two day items in one day. I agree that Amazon isn't nearly as amazing as it used to be, but I am no where near leaving prime. Their TV package alone is nearly worth it.
 

Lifelite

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Where do you live? I live in a northern suburb of Dallas, surrounded by fulfillment centers. I sometimes get two day items in one day. I agree that Amazon isn't nearly as amazing as it used to be, but I am no where near leaving prime. Their TV package alone is nearly worth it.
Central Arkansas.

Walmart is much more present here, and a lot of the time can get you something same day.

Plus, it's not just the shipping speed. Their packing quality has really sucked lately. 2 day shipping doesn't mean shit if your item arrives broken, and this year alone I've sent back 6 items that were damaged because they threw something in a box with MAYBE some packing bubbles on one side (definitely not adequate)
 

Shoganai

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If they get rid of Prime benefits by forcing me to buy a minimum cost of items, I’ll happily shop elsewhere. I haven’t had a personal issue with fake items, but they should really focus on that.
 

AlphaAtlas

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Welp just means more people are going to turn to Walmart. Low profit is better than no profit. I'm very close to dropping prime, as they can barely manage to get 2 day shipping right anymore.
Bingo. Seems like taking a tiny hit on low-cost items would be worth shutting out competitors (like Walmart) from a big niche. It's not like Amazon is short on the infrastructure it needs.
 

Dead Parrot

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Don't see how Amazon was making any money on shipping $7 six packs of drink via a 3rd party shipper. The cost of shipping was probably higher then the sales price of the drink. This is an area where Walmart has a huge advantage as long as customers will accept ship to store as a viable alternative. Walmart already has the infrastructure in place to ship a 6 pack of drink to a specific store as part of normal operations.
 

U-238

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Bingo. Seems like taking a tiny hit on low-cost items would be worth shutting out competitors (like Walmart) from a big niche. It's not like Amazon is short on the infrastructure it needs.
Expect Walmart to follow suit. Commerce has been in a race to the bottom for years and they may finally have hit that bottom (or are at least getting close to it). If Walmart can turn a bit of extra profit while still remaining "competitive" with Amazon they will definitely do it.
 

whatevs

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Bingo. Seems like taking a tiny hit on low-cost items would be worth shutting out competitors (like Walmart) from a big niche. It's not like Amazon is short on the infrastructure it needs.
Costco, BJ,s and Sam's Club would be that niche. Not really Walmart.

Also, dont know when last time you shopped at Walmart, but they don't generally sell cheapest. And even then, they have spot pricing on everything, prices of milk/cereal, you name it, changes on weekly basis. And different stores, only 15+ minutes apart, but in different neighborhoods, have massively different prices for same "staples"...

Walmart already one upped Amazon.

Amazon's problem is that they just dont give a shit about what they sell. They only see revenue/profit numbers.
 

OnceOver

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So you destroy the competition by selling everything fast and cheap... then decide you don't want to sell low cost items fast and cheap because now you're better than that? OK cool.
 

katanaD

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i have wondered why they were even bothering with certain "grocery" store items, like coke. where its really cheap and probably costs more in shipping then the product itself.
 
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Amazon is about dominance, not nickels and dimes. It would be a massive change in policy for Amazon to start penny pinching in its retail revision, I have my doubts about the article.
 

Shoganai

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I guess you can always go to wish.com for your CRaP needs.
I bought a hoodie from their once and they said to buy two sizes higher than you would normally buy. So I ordered an XL and it wouldn’t even fit my 8-year-old nephew. Looked like a cheap hoodie for a doll.
 

Danny Dawg

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What Amazon- being a junk drawer supplier does not work? Where I come from, if you take the meat, you take the potatoes as well.
 

PantherBlitz

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Don't see how Amazon was making any money on shipping $7 six packs of drink via a 3rd party shipper.
Because they don't. Amazon most likely is losing money on items like these. It would be irresponsible to their shareholders to not trim the CRaP.
Not everything under the sun is suitable for online purchases.
 

Darunion

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Because they don't. Amazon most likely is losing money on items like these. It would be irresponsible to their shareholders to not trim the CRaP.
Not everything under the sun is suitable for online purchases.
But these loss leaders are useful as it gets more customers purchasing through you. Amazon ditches these and someone else will pick them up and once half of your stuff is bought somewhere else, you will migrate.

I don't see this working out in the long term, you could start to hemorrhage customers to another service and have to do some kind of incentive to gain them back.

Now as far as the low quality and fake items on their store, that is another topic of discussion.
 

Grimlaking

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What about all the grocery items with the grocery store chain they just purchased. Are they going to back out of the grocery delivery. A Pack of gum is a low cost low profit item. Perhaps relegate the low cost items to cheap add on items?
 

Absalom

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Watch Amazon solve this by making everything under $10 an Add On Item.

Which basically means spend $20 or stop wasting our time.
 

OFaceSIG

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Central Arkansas.
I can totally see this. I have a Walmart locally like many folks in the center of the country and I go there for many items that are similarly priced to Amazon and I don't have to wait two days. Anything over the counter pharmcy wise and common for sure, I go to Walmart first usually.

Don't see how Amazon was making any money on shipping $7 six packs of drink via a 3rd party shipper. The cost of shipping was probably higher then the sales price of the drink. This is an area where Walmart has a huge advantage as long as customers will accept ship to store as a viable alternative. Walmart already has the infrastructure in place to ship a 6 pack of drink to a specific store as part of normal operations.
In cases like this Amazon is merely a portal conducting the sale for them. Amazon is getting a few points off the transaction and that's it. They're merely acting like a broker. They are making money for pre-existing website. It's genius really.

Monoprice says hello.
Yup... I always check monoprice first if all I'm ordering is cables. It's still very hard to beat monoprice's quality and price for run of the mill cables.
 

ConnerLeo

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Market share was part of the Amazon growth formula. Now that they have some breathing room in this space, they are going to try to push other boundaries. Turbo capitalism at its worst.
 

mt2e

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Today is the day somebody realized they could start a company that will one day compete with Amazon.
 
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