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News > Technology
Amazon trims offerings
February 2, 2001: 1:55 p.m. ET

Online retailer plans to stop selling unprofitable products to aid profitability
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NEW YORK (CNNfn) - Online retailer Amazon.com confirmed reports Friday that it will eliminate unprofitable items from its large selection of offerings.

The move, first reported in Friday's edition of the Wall Street Journal, is being made as part of Amazon's effort to post an operating profit by the fourth quarter of this year, according to Bill Curry, a company spokesman.

"We are absolutely committed to being profitable by the end of this year, and one way to do this is to make sure that every item contributes to profitability," Curry told CNNfn.

The program – which CEO Jeff Bezos dubbed "Get the Crap Out," in an internal memo, according to the Journal report – is a detraction from the company's previous strategy of selling nearly anything people want to buy, including patio furniture and beauty products.

"We'll ferociously manage the products we carry so that we sell only products that are profitable,"  Bezos wrote, according to the Journal report. "The thirty-pound box of nails isn't long for our world."

graphicCurry explained that the idea is not a wholesale pruning of Amazon's lower-margin online offerings, noting the company's existing marketing arrangements with other online retailers such as Drugstore.com, Greenlight.com, and ToysRus.com to sell their products on Amazon's e-commerce platform. But he would not provide any specific examples of products that will no longer be available.

"What we are doing is a broad initiative to make sure that every product we sell contributes to profitability," Curry said. "But we have not changed one bit our mission to provide people a place where they can find and discover anything on the map."

The Seattle-based company reported a fourth-quarter loss Tuesday that was slightly smaller than Wall Street's expectations and said it will lay off 1,300 workers as part of its effort to achieve operating profitability.

Curry also confirmed that Amazon plans to end its controversial effort to get former employees from its customer service center in Seattle, which is being shuttered as part of the company's restructuring plan.

A unit of the Communications Workers of America, WashTech, had been attempting to unionize that customer-service center, and Amazon had asked laid-off employees to sign a "nondisparagement" agreement requiring them not to speak ill of the company in return for a more generous severance package.

"Every severance agreement with anyone has always had a number of provisions that you won't disclose trade secrets, remain employed until a certain time, et cetera," Curry said. "Another was not poormouth the company. But listening to employees, it was causing them concern, so we decided that the right thing to do is to make that concern go away."

Amazon (AMZN: Research, Estimates) shares were down $1.50, or 9.2 percent, in afternoon Nasdaq trade. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.