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Seeking to increase its already huge profits, Amazon would touch the sellers of unprofitable items where it hurts: their commercials.
Citing emails sent to Amazon vendors in addition to conversations with people familiar with the subject, CNBC announced Wednesday that Amazon had recently begun to inform some of its brands that it would no longer allow them to pay to promote their products on the platform if these products were not available. t make a profit for the e-commerce giant.
An email from CNBC informed the vendors that they needed to reduce Amazon's costs for unprofitable products if they wanted to continue selling these products through the company. An Amazon spokesman told the site "that it decides which products to market and promote in our stores based on various factors, such as relevancy, availability, profitability and price." other factors ".
According to the company, the practice is not new, but a spokesperson did not immediately return a request for comment on the duration of the implementation of the policy.
The ban on these ads is the latest in a series of actions by Amazon aimed at improving its bottom line. The Wall Street Journal had previously indicated in December that the company was targeting internally known items under the name of CRaP, or "not making a profit" products. According to the newspaper of the day, Amazon's growth initiatives included pushing suppliers to update the packaging of items that did not sell well in its online marketplace and that worked with suppliers for update the prices of underperforming products or items that cost money to Amazon.
A spokesman for Amazon told Gizmodo at the time that his operations had not changed, although he acknowledged that he could stop selling an article that would not be profitable over an extended period of time, although not specified. Amazon has developed some unprofitable products through its Prime Pantry development program, the spokesman said, and initiatives to make product packaging providers more attractive to online shoppers have been announced by Amazon.
Amazon's advertising practices unveiled by CNBC this week underscore once again the impact this can have on vendors trying to exploit its considerable market share – with little or no warning – even if it affects the respective results of these marks. But we need to ask ourselves how much more Amazon can do by being flexible enough to increase profits before Washington comes in and does something.
Updated on the 20/03/19 9:15 pm ET: Adding the company's clarification on the policy is not new.
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