In recent months, Amazon has been eliminating unprofitable items.
In an effort to improve its bottom line, Amazon is getting rid of products employees dubbed as “CRaP” - or “Can’t Realize a Profit”, according to a Wall Street Journal report.
Profit Experts CEO Fred Parrish said every company looks to increase its profitability to survive for the long run, while small company business owners are mostly focused on revenues and sales.
“What it appears they are doing, is taking a very close look at the pennies on a large volume of products,” said Parrish.
Some of Amazon’s sales, like bottled beverages or snack foods, aren’t making the e-commerce giant money—and they want to change product packaging and quantities to improve earnings and make transactions more efficient.
Parrish said from a cost accounting perspective, some of what Amazon is doing, is genius.
“They’re managing the supply chain, which is making their process more efficient either from an operational perspective, or more efficient from a cost perspective,” said Parrish.
He said the consumer shouldn't notice any difference, especially when it comes to costs because Amazon won't have to raise prices directly.