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Big items with small prices: Amazon declares war on unprofitable products

The largest online store in the world has tired of not taking advantage of some products. Hence, Amazon has begun to change its strategy to get those economic items where the margin is not enough, they become a little more profitable to not have to remove them from their catalog.

We have known for a long time that Amazon’s profitability is not found in the sale of economic items. So much so that to amortize the logistics of the orders established and subsequently, increased the minimum amount to make a free shipment. A symptom of adjusting costs and compensating for the benefit obtained.

But now this approach goes further. The Wall Street Journal is set precisely in this reality that has been noticed already in drinks and snacks of small amount. If until now, for example, consumers could buy a 6-pack of Coca-Cola cans for $ 6.99 through the Dash button, now the price and quantity are increased; 24 cans for $ 37.20.

And it seems that Amazon has tired of losing money with products called CRaP (Can not Realize a Profit). A catalog that little by little it tries to reduce offering other options of greater volume and therefore, amount. A logical way with which to sell higher value products where it is not positioned so well.

The strategy change is also being worked with the vendors. It was commented at the beginning of the year by Brian Olsavsky, CFO of the house, mentioning the elimination of this type of products “which is a constant work with the resellers”. Some salespeople who continue to press with important commissions that reduce the chances of being competitive, especially in the medium-high range.

A symptom of business maturity

After years of losing money – Spain was a clear example of this – Amazon considers that its business is mature enough to vary certain policies without giving it a reputational problem among customers.

And it is that these changes can be dangerous when the business is not adult. However, when they are done in a staggered way and with the support – although there is no other remedy for the commercial strength of Amazon – from the suppliers, it is much simpler.

What do you think of the Amazon turnaround? Do you think it is a good policy?

Also published on Medium.

Published inE-commerce

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