Amazon, a company valued at $1 trillion earlier this year, is reportedly sick of selling you cheap shit that isn’t making it more money.
The Wall Street Journal reported Sunday that Jeff Bezos’ e-commerce behemoth is moving away from selling products apparently known internally as known as “CRaP,” or Amazon-speak for “Can’t Realize a Profit.” These are products typically tagged at $15 or under, like snack foods and bottled drinks, the Journal said. Citing sources familiar with the matter, the report claimed the company is pushing brands to overhaul their packaging and is raising prices in order to bolster its already massive revenue:
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.
Items characterized as “CRaP,” the Journal reported, are typically “heavy or bulky and therefore costly to ship—characteristics that make for thin or nonexistent margins.” One brand it named as among this group of products is Coca-Cola Co., which it said will begin shipping Smartwater packs from its own warehouses rather than Amazon’s at the company’s request. It’s a move that saves Bezos’ company money and is reportedly “something Amazon has asked more brands to do to cut its own costs,” the Journal reported.
Amazon said in an email to Gizmodo that it had not changed how it operates but added that it may phase out products that are unprofitable over time. In some cases, the company said, it moves products to programs like Prime Pantry, which allows users to fill a box with smaller items.
That Amazon is looking for new ways to boost its bottom line should perhaps come as little surprise, given that it crossed the trillion-dollar valuation line earlier this year, hot on the heels of its longtime rival Apple. And, as the Journal noted, it’s something that Amazon can pull off in part because of the significant slice of market share that it holds hostage by way of its platform. While it may ultimately cost brands money, Amazon has the power to dictate the terms of the sales on its site.
Anyway, it’s nice to know that the company is focused on increasing its incredibly bloated bottom line as its own employees continue to protest for humane working conditions and union contracts.
Update 12/17/18 2:00 p.m. ET: Added comment from Amazon.