Amazon is rethinking its commitment to being "the everything store" by refocusing on profitability, according to a Wall Street Journal report.
- Amazon is rethinking its strategy for items it sells that it refers to internally as "CRaP," which stands for "Can't Realize a Profit," according to a report by The Wall Street Journal.
- These items — which include things like bottled water, paper towels, and snack foods — are usually sold for less than $15 and are heavy or bulky to ship, leading to slim or no profit margins, The Journal said.
- Amazon is trying to focus on more profitable items and wants to get rid of some CRaP items, according to the report.
Amazon wants customers to buy less "CRaP" online.
The e-commerce giant is rethinking its strategy for some items it sells that internally it describes as "Can't Realize a Profit," or CRaP for short, according to a new report from The Wall Street Journal.
The items — which include things like bottled water, soda, and snack foods — are usually sold for less than $15 and are expensive to ship because they're heavy or bulky, meaning their profit margins are much worse than other items the website sells, The Journal said.
Amazon is eliminating some of the items and working with manufacturers or vendors to repackage others so they're more profitable to sell online, The Journal reported. In the case of Coca-Cola bottled water, for example, Amazon worked out a deal where the packages are shipped directly from Coca-Cola rather than an Amazon fulfillment center.
Amazon is doing this now, according to The Journal, because it can rely on third-party merchants to pick up the slack in offering a wide selection, which customers now expect from the "everything store." Items from third parties have grown to account for more than half of all sales on Amazon's website.
The move to eliminate or alter unprofitable items on its site shows that Amazon is not afraid to throw its weight around with vendors, likely because of its dominant position online. Amazon is expected to account for almost half of the US e-commerce market this year, according to analysts, and eMarketer recently said that nearly half of all online product searches start on Amazon. Many consumer-packaged-goods brands don't see a choice of whether to sell on the website anymore.
Amazon did not immediately respond to Business Insider's request for comment.