Dec 16, 2018 - Technology

Amazon rethinks bulky, hard-to-ship products with thin profit margins

Axios

AmazonFresh warehouse. Photo: Monika Skolimowska/picture alliance via Getty Images

Amazon has trained us "to buy everything from major appliances to daily staples online. Now it is having second thoughts about some of those sales because they don’t make money," according to the Wall Street Journal's Laura Stevens, Sharon Terlep and Annie Gasparro.

"Inside Amazon, the items are known as CRaP, short for 'Can’t Realize a Profit.' Think bottled beverages or snack foods. 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: "Coca-Cola will start shipping [some Smartwater] orders directly to consumers, sparing Amazon the expense of shipping from its warehouses."

Go deeper: Amazon takes on UPS shipping prices for sellers ahead of holidays

Add Axios on Google

Amazon rethinks bulky, hard-to-ship products with thin profit margins

What to read next