Amazon Wants To Curb Selling 'CRaP' Items it Can't Profit On, Like Bottled Water and Snacks: Report (wsj.com) 222
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.
Bottled water... (Score:5, Interesting)
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Bottled water even in places where tap water is perfectly drinkable to the point where water being bottled is taken straight from the tap and ran through a simple filtering system that doesn't really do anything is extremely profitable because of marketing.
So it's sold.
That said, in places where tap water is of too low quality to drink, there's a genuine market for bottled water.
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Pretty sure you are wrong on the cloud margins; it might not be cash-flow positive due to reinvestment, but I understand it generates significant and growing profit in absolute terms.
As for bottled water... they should push for water filters and refillable bottles. Filtering things like heavy metals is very easy, and RO will get just about anything else out. Add a mineral bed for post-treatment and you have great water with minimal shipping costs. (Pump your concentrate/reject water from the RO system ba
Re:Bottled water... (Score:4, Insightful)
Most of the "very green" people are ideological. In my experience, to the point where there's no real differentiator between "ideology" and "godless religion" like Buddhism.
(Referring to actual Buddhists in Asia rather than the hip Buddhists in the West).
It's the moderately green people that are reasonable and can be convinced via logic and facts. Because they arrived at their position not because they looked for something to replace what seems to be the void in them that would be filled with traditional religious belief throughout most of history of humanity as species. But because they looked for something that would explain changes around them, and how they could be affected by their actions, as individuals or on a collective level.
Unfortunately like on most topics, it's the religious ones that will scream over everyone, making themselves heard and everyone else silent.
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I too find bottled water very confusing. We have potable water being pumped into our homes, and here (in Ireland) there were riots when the Government introduced water charges (which the Government eventually backtracked on). Yet people here still buy bottled water!
To put this in context, the water charges were something like 3.3c (that's €0.033) per 1000 litres of water.
A 500ml bottle of water is typically about €1. So for the cost of buying a single 500ml bottle of water you would have paid f
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I need you to send written expert testimony to my State legislature, as I'm proposing we eliminate the water and sewage charge. We've been force-selling people's houses as the charge increases, and I believe a 0.11% income tax would cover the reasonable use load. I need information about anywhere already doing this.
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So, yeah, the mind boggles when I see people so every so casually spending money on bottled water.
I know right! Last time I went hiking people looked at me like some kind of weirdo when I simply held my backpack under the tap so I could take some with me.
Ok that post was only 50% sarcasm, my backpack had a water bladder inside it.
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Why they Buy (Score:3)
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).
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It's not always about health. Sometimes it's literally a matter of taste.
At least where we live now, we have a large quantity of naturally occurring sodium in our ground water. When combined with the chlorination of the water treatment system, the result is tap water with an excessively salty taste. As in, it ruins what would otherwise be perfectly good tea or coffee and can affect cooking recipes to a lesser degree. Put simply, it isn't at all pleasant to drink by itself unless it's been filtered several a
Re:Bottled water... (Score:5, Informative)
Re: Bottled water... (Score:2)
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Instead of trying to support your ideas, attack them: that is the scientific way.
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Tap water that tastes like crap is a good reason for buying bottled water.
And it won't make a "tremendous amount of environmental damage" if disposed of properly.
The problem with bottled water is that because of aggressive marketing, some people are persuaded that bottled water is healthier when it is not. It is indeed a problem. But blaming someone for drinking bottled water after making a personal choice is going too far.
What's next? Criticizing people for taking daily showers. Latest research seem to con
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And of course, each of those water bottles that you use is going to be around on the planet for thousands of years. That's a tremendous amount of environmental damage you're creating for no good reason.
If a desire to drink something that doesn't taste like salt water isn't a "good reason" to you, I'd suggest that you've valued dogmatism more than you've valued having a proper regard towards your fellow man.
I'm not a "I don't get what the big deal is" person. I'm not a "I simply must have water from a spring-fed river" person. I'm a "I hate getting bottled water, but see no reasonable alternative" person, which should have been clear from my previous post. I'm already avoiding bottled water where I can (e.
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They used their leverage as a soda company to create a market for bottled water.
I remember in the 80s every grocery store used to have an entire aisle of soda, one side was two liters and the other 6 packs of cans. Now you go into a store and it's maybe 1/4 soda and 3/4 bott
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Trucking it in via tiny bottles is very silly, but I drink mostly "bottled" water.
Where I live the water is extremely gross to drink, even though I'm fairly sure it's safe to drink. We use our tap water freely in any situations where taste doesn't matter, like cooking (the taste of the water is overwhelmed by the taste of the food), showers, washing things, etc. It's so bad tasting that I am willing to pay extra to get less terrible tasting water.
However, individually packaged bottled water is still extreme
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Where I live we have PFOA leaking into our water system, even well water is affected. While the state has put in water purifiers the population still really doesn't trust it.
That and a lot of the water from wells, has a lot of minerals smells like rotten eggs (sulfer) and tastes like crap.
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if you've ever tried to bottle your own water you'll know that:
1. it doesn't keep fresh that long
2. TSA won't let you take filled bottles past the security checkpoint
Packing a bottle of water in a gym bag or sack lunch is about convenience. It has nothing to do with the perceived safety of tap water.
Re: Bottled water... (Score:2)
I wish I lived in one of those places.
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What happens is that you get used to the taste when you are drinking it constantly. You go to a different city with different tasting water--and that tastes funny.
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The last time I was in Europe, the tap water tasted horrible. Then I hopped on a train to a different part of Europe, and suddenly the tap water tasted fine. I, like you, had assumed that all water in a large region tastes exactly the same. Imagine my shock to discover that the water in one place tastes different than the water in a different place!
</sarcasm>
Likewise, given that the US is several thousand miles across, and that depending on where you're located you may be dealing with deserts, glacier
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Chlorine is not very appealing, but I like the taste of cholera and legionnaires' disease less.
Fun fact, charcoal filters can harbor legionnaires' disease if left in warm conditions for long periods of time. You can change them more frequently than every year, or keep the filter in the fridge. (dying the filter between uses tends to ruin its effectiveness, so it's not a practical option)
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Can't you just boil the filter every now and then to kill anything growing in it?
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Maybe you could, if the plastics holding the filter are heat safe. I'm not sure it's worth while to try.
If you bake it in a hot oven and completely dry it, it will drive off volatile compounds the carbon has absorbed and extend its life further while at the same time making it sterile.
FYI water pipes have pressure - water comes out (Score:2)
Don't you hate it when you open the tap and all the stuff in the room gets sucked into the faucet?
Of course that's not what happens, water pipes are under pressure, so when there is a leak water seeps OUT, "stuff" doesn't seep in.
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1) Seeping is not the same as leaking. it's absolutely possible for a hairline crack in a pipe to let contamination in without letting water out, or for some chemicals that aren't water to diffuse through the pipe itself if it has become porous.
2) Not all water pipes are under positive pressure all the time. It's very possible that some portions can end up under negative pressure, or are constantly under negative pressure. Think Bernoulli effect and/or siphoning action.
3) It's also possible that there can b
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Well I live in an area where PFOA have been polluting the water supply for decades. And this Highly Regulated system, just ignored it. Until a citizen realized that a lot of his neighbors were getting cancer, and did the study himself.
I ordered a "pallet" of soda (Score:5, Interesting)
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.
Re:I ordered a "pallet" of soda (Score:5, Funny)
Sounds like you, alone, maybe the sole reason for this change! LOL.
Re:I ordered a "pallet" of soda (Score:5, Interesting)
That reminds me of a (probably urban legend) story about a guy who was building a masonry building in a remote location. It was fantastically expensive to ship the masonry in. The location did have postal delivery, and the guy figured out he could flat-rate ship individual blocks for a total amount that was much less than regular shipping, so he wound up mailing them.
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A town wanted a brick bank, the railroad cost too much, but they found out they could ship 50 pound of bricks via USPS for cheap. So every household in town got 50lbs of bricks so they could build the bank.
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It was a building supply company shipping them to Alaska, not "a guy", but it was a real story: https://www.apnews.com/281d3e6... [apnews.com]
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Re:I ordered a "pallet" of soda (Score:5, Funny)
Spent $400 to get 1200 cans of grape soda? And Amazon is the sucker in the story?
Re: I ordered a "pallet" of soda (Score:2)
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You would agree with him after the 1200th can of grape soda.
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I would cry uncle after about two sips...
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I bought some kind of washer (small part for something) it came in one of those big amazon boxes with bubble wrap etc. So incredibly wasteful.
Eh, maybe, maybe not.
The cardboard is obviously renewable. They usually use inflatable plastic stuff that once the air is out is very low volume.
The question is whether it's any worse than driving all over town looking for the washer would be.
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So incredibly wasteful.
It was packed in the smallest box the packing guy had at his station. The "air fill" (what they use instead of bubble wrap) is spit out by computer at the station, calculated to fill the box.
It was a huge step forward at distribution centers when Amazon discovered padded envelopes. It cost millions to change their systems to start using them, of course, but they got 20% less silly in their packing.
But it was never wasteful: Amazon is optimizing for the labor cost of sending that item. As that's the domin
The Empire Strikes Back! (Score:5, Funny)
Darth Bezos: I am altering the deal. Pray I don't alter it any further.
What does this mean for Amazon Grocery? (Score:5, Insightful)
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Are you really this stupid? PROFIT is the money the business EARNED. Exactly how do you think a business can EARN money without making a profit?
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A business is organization, providing efficiency, lowering the total cost to supply something. Some people think a business is overhead and that artisan, hand-made everything would somehow be cheaper.
The Truth? (Score:5, Interesting)
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
Re:The Truth? (Score:5, Funny)
If I’m driving to a brick and mortar grocery store, I’m going to the Winco that’s 4 minutes away - and a lot cheaper than Whole Paycheck.
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Prime isn't worth it, and this just makes it an even worse deal. Items eligible for Prime delivery cost more anyway, i.e. they already have the cost of expedited shipping added in. Amazon isn't all that cheap anyway for most things, it's only the free super-saver delivery that saves it.
Being able to get basic stuff delivered added a lot of value to Prime, in terms of convenience. They are really trying to make it unattractive.
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Remember to use your qualifiers kids.... Prime isn't worth it if all you use it for is free shipping....
Prime is worth it if you borrow Kindle books for free (vs buying), use Amazon's streaming service, etc. Like any other subscription plan, the more features that you use, the more of valuable it is.
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As someone who lives in the UK afaict UK prime is better than us prime. AIUI US prime only gives free 2-day delivery while UK prime gives free next day or if you prefer nominated day on most Amazon-stocked items (some items seem to have more restrictive options, probablly as a result of being in different warehouses). Also unlike most next-day and nominated day services Amazon offers weekend deliveries at no extra cost.
Prime is great when you are doing something like preparing for an event when you want to
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As someone who lives in the UK afaict UK prime is better than us prime. AIUI US prime only gives free 2-day delivery while UK prime gives free next day or if you prefer nominated day on most Amazon-stocked items (some items seem to have more restrictive options, probablly as a result of being in different warehouses). Also unlike most next-day and nominated day services Amazon offers weekend deliveries at no extra cost.
Prime is great when you are doing something like preparing for an event when you want to order a bunch of stuff over a short period (but not all at once because you inevitablly find you need more stuff as the preperations proceed). I haven't yet found motivation to stay subscribed all the time though, I just buy a month when I want it.
I know amazon UK has a video service, but I dunno if it's better or worse than the US one, I haven't tried it personally.
I live in the US and can get free same day delivery on many items. If its a common item that is ordered a lot in my metro area they will deliver it the same day for free, up until noon. If I order after noon then I will get it the next day. Rarer and more expensive things typically come next day - though again this depends on popularity.
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I used to live in the UK where you could get the TV and I think some music. There is some good stuff on the TV, like The Man in the High Castle, but after about a month you have exhausted the original content and it's not worth renewing.
In Ireland you can't seem to get the TV. At least my smart TV tells me it's not available in my region. There is no Amazon Ireland per-se, they have a distribution centre in Dublin but you use the .co.uk domain and pay in Sterling.
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Depends where you live. Outside of s metropolis Amazon lets you get stuff that's not available locally and at a certain point in life you have all the hard goods you need that local places sell. Amazon lets you get things that city people can get at niche specialty stores without living a city life. We probably average three Amazon deliveries a week and the gas savings alone are worthwhile, even if the labor cost of trying to find obscure items is set at zero.
Bottled water makes sense (Score:2)
Re: Bottled water makes sense (Score:2)
The other playbook (Score:2)
Just what Amazon needs (Score:2)
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I'm not convinced a start up is going to want to start selling things that cost too much to ship online.
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South Park did it (Score:2)
https://en.wikipedia.org/wiki/... [wikipedia.org]
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If Amazon, with its incredible logistics and economy of scale, cannot profitably sell these goods online for a reasonable price... why do you think anyone else can? They will face the exact same challenges, probably without some of the advantages that Amazon has.
They're competing with bulk delivery at supermarkets, which has a tremendous cost advantage.
Supermarkets will offer lower prices for the foreseeable future. If people aren't willing to pay a hefty premium for the delivery of (some) household goods,
Remember the 2nd rule of acquisition (Score:5, Interesting)
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.
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Correct. You are paying more, but less likely to realize it. Covering the increased shipping cost as well.
It's insane (Score:2)
It's insane to use Amazon logistics to deliver beverages. That shit is all shipping costs, and Amazon will never compete with large scale grocery deliveries.
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A little off topic (Score:2)
I realize its not exactly the CRaP issue but it might be what shoves some products into that category. I use Prime alot because even Walmart means a 25 mile round trip here. So having stuff delivered is usually great value proposition for me in terms of my personal time and my own costs in driving to go get stuff.
Some of Amazon's packaging choices however are atrocities. I have lost count of the number of times I have got a shoeboxed sized or larger carton packed with bubble wrap when a padded envelope w
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They probably want to sell you the kindling as well.
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What do you get when you order a carton of bubble wrap?
Re:A little off topic (Score:5, Informative)
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 [uline.com] and this [uline.com]) 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.
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Thanks for providing a bit of useful analysis.
Idiots deserve it (Score:2)
What kind of idiot would spend $1.55 for a bottle of water - especially when purchased by the case? The original price of $1.17 per bottle in the 6-pack was already overpriced.
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what? (Score:2)
Can't profit on a trillion dollar market cap (Score:2)
How You Make A Monopoly (Score:3)
Destroy the people that were selling it at a profit and then when they are gone raise prices.
sayanara, Everything Store (Score:2)
In Amazonian lore, the long tail is the killer Godzilla of lost leaders.
You come for the long tail, you leave with a flying carton filled with All the Usual Retail Suspects (AuRS).
And now here comes Bezos all in a huff, treading on his own tail after a sharp 180, having finally nosed his way to the realization that dragging a long, flashy appendage along in the dirt behind the poop orifice was never a genius design in the first place.
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"Sayonara", of course, but I guess my spelling checker (i.e. typo extractor) doesn't reliably activate in the subject line.
I hesitate to call it a spelling checker straight up, because my typo extractor sure doesn't spell any better than I do, if you count half the valid words it still doesn't know. I've been patiently training it for ten years, and just now I had to add "irreproducibility" despite it knowing both "reproducibility" and "irreproducible". Dumb as a bag of hammers, truth be told.
File under thi
Grocery store will be more expensive (Score:2)
Isn't that the point of Prime Pantry? (Score:2)
The story here seems to be that Amazon's employees who are supposed to categorize which items go into Prime Pantry are doing such a poor job, that they're letting some items slip into their regular delivery system.
Locally optimal is ultimatly bad for business (Score:4, Interesting)
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.
Bottled water in my neighborhood (Score:2)
The tap water in my area isn't bad, just water: I assume if I don't notice flavor it's OK.
Certainly not unhealthy.
Yet I constantly see families from the poor part of town hauling off large water bottles from those machines in front of laundramats selling "non ionized/alkaline water".
They would appear to be the last people who could afford to buy water, but there they are standing in line doing it.
Unless their house/apartment water is godawful, I don't get it. The places they're living aren't more than 20 ye
Books? (Score:2)
Are heavy or bulky?
But profitable to grow brand on?
Cat litter (Score:4, Funny)
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!
Re:I wish Amazon published a list of CRaP items (Score:5, Funny)
I think it’s been pretty obvious for years that a lot of what Amazon sells is crap.
Re:The Post Office Should Do the Same (Score:5, Informative)
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.
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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.
very true. Analysts belive the USPS actually makes a profit off of Amazon. Losing Amazon will remove a revenue source without a simialr drop in cossta s they still will drive by every house every day. It's not just USPS that will be impact, FedEx as well since FedEx is the airline that carries US Mail. Amazon, once it has its delievry sysetm and logistics all in place, will probably start shipping services as well. After all, they'll have the hubs, trucks, and planes in place, why not move stuff both ways.
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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 cea
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At least for the bottled water part. Maybe this will push some people to use a filter (where necessary, Flint I'm looking at you) and just begin to reduce the amount of plastic in our toilet...I mean the Pacific ocean.
Not sure how much its improved but Flint was waaay past end-consumer water filters at the worst.
The plastics waste in the Pacific is due more to Asian countries than the US: https://www.cnn.com/2016/07/06... [cnn.com]
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ust begin to reduce the amount of plastic in our toilet...I mean the Pacific ocean.
Don't throw your plastic into the ocean. Problem solved. It's not like plastic migrates from the landfill to the ocean for the winter.
Destructive criticism? Par for Slashdot (Score:2)
Yours [WCMI92's] comment is one of only two that mentions the most insightful word on this topic: "monopoly". Nothing substantive to merit a mod point, even if I ever saw one to give. Mostly replying here from curiosity. Your sig suggests insight, but the Subject: suggests sucker. Perhaps it's a reversed satirical Subject:?
However, I'll throw out a rehash of my suggested solution approach: Change the tax system to make it pro-freedom, anti-greedom. What we have now is a system where the best bribers pay off