One of the most recognizable elements of an Amazon product page is the recommendations section, which is chock-full of items that other "customers also bought." This is usually where people find other items to add to their cart, a boon both for retailers and Amazon.
However, the retail company might be moving away from selling people cheap items, apparently called "CRaP" — which stands for "Can't Realize a Profit" — inside Amazon's headquarters. CRaP items are typically priced $15 or below, and they range from snack foods to bottled beverages to many other things.
Amazon will apparently be pushing brands to overhaul their packaging and will be raising its prices to jack up revenue, according to a report from The Wall Street Journal, citing "executives and people familiar with the company's thinking."
Amazon Removing 'CRaP'
The report adds that in recent months, Amazon has been slowly getting rid of unprofitable CRaP items and encouraging retailers to make adjustments for their products to sell better. All this because Amazon wants to stop selling CRaP, which the report describes as "heavy or bulky and therefore costly to ship — characteristics that make for thin or nonexistent margins."
One name-dropped brand is Coca-Cola, which will apparently begin shipping Smartwater packs from its own warehouses instead of Amazon's at the company's request. The move will save Amazon costs, and it's apparently something the company has been asking other brands to do to further raise profits.
The Trillion-Dollar Line
Amazon has yet to comment on The Wall Street Journal's report. However, the notion that it's seeking new ways to boost its bottom line should come as no surprise, especially considering how bullish Jeff Bezos, its CEO, has been at maximizing profits. Whatever the company has done and is doing, it's certainly working — Amazon just crossed the trillion-dollar valuation line earlier this year, a feat achieved only by a select few in the tech industry, including Apple.
Amazon's move also demonstrates that it's not afraid of making big changes involving vendors, likely because it's the biggest online store right now and brands can't make Amazon adjust for them — rather, they must adapt to the company's whims.
Amazon has grown to account for almost half of all e-commerce transactions, according to analysts. More startling yet, nearly half of all online search queries start on Amazon, according to eMarketer. This, of course, explains why brands are left with no choice but to succumb to Amazon's demands.
