|Thu Dec 20 2018 23:51:41|
Amazon Sheds CRaP Products and So Should You
By: Ina Steiner
Amazon doesn't want to sell unprofitable products itself, which it refers to as CRaP ("Can't Realize a Profit"). On the other hand, it has no qualms about competing with its own merchants for profitable products, according to reports published this week.
The Wall Street Journal
said Amazon doesn't want to sell "CRaP" products anymore. "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." So it's asking manufacturers and vendors to repackage or fulfill those goods themselves.
But while it's using various techniques to shed its portfolio of unprofitable items, how it selects profitable
items to sell is coming under fire. This week, Bloomberg (via the LA Times
) reported that Williams-Sonoma is suing Amazon for copying West Elm furniture designs. The newswire wrote, "Amazon's Rivet line includes products that are "strikingly similar" to Williams-Sonoma's West Elm brand, including a $300 orb chair the household goods maker introduced two years ago, according to Williams-Sonoma's complaint."
Whether or not Amazon violated the intellectual property of Williams-Sonoma, the case gives ammunition to those who claim Amazon unfairly competes with its third-party merchants. This week retail industry analyst Sucharita Kodali pointed to research
from an HBS professor that she said "proves what many already knew: Amazon cannibalizes its best 3rd party sellers."
The report says
Amazon targets successful third-party sellers' product spaces, and that sellers with successful products "are pushed out of markets because platform owners enter their product spaces and compete directly with them."
Amazon has the clout to push its weight around, but third-party sellers of all sizes should do the same kind of analysis Amazon does when it comes to the products they sell.
Are you guilty of selling CRaP products?
Now is a good time to evaluate profit margins on your products, especially with shipping costs going up. And don't forget to take into account USPS expansion of dimensional weight pricing
, which can provide sellers with an unwelcome surprise when it comes time to ship large, lightweight items.