Amazon is not just changing the way we shop. It also influences how things look like we buy. The e-commerce giant is urging brands to change the way certain products are packaged to make them easier to ship and more profitable for Amazon, the Sunday's Wall Street Journal reported.
Certain products such as bottled drinks or snacks foods are expensive to ship and have relatively low profit margins. According to the article, Amazon refers to CRaPs, an abbreviation for "Can not Realize a Profit," according to article in this article. In an attempt to boost its own margins, Amazon has reportedly convinced some brands to change their shipping and packaging strategies. In some cases, this means that products are reshaped to be box-shaped or more compact, making them easier to deliver. In other cases, this means that they are shipped directly from the manufacturer's warehouse and not from an Amazon fulfillment center.
While these changes are not of great importance to the buyer, Amazon is a big money saver ̵
Smartwater The company belongs to Coca-Cola and has partnered with Amazon to change the way it bottles and ships its water bottles, the Journal report says. Starting in August, Amazon Dash's standard Smartwater order – a service that allows customers to automatically reorder certain products – has been upgraded from a $ 6.99 six-pack to a $ 37.20 24-pack, which increased the price per bottle from $ 1.17 to $ 1.55.
Seventh Generation, a plant-based cleaning product brand owned by Unilever, also began promoting larger packs of dish soap on Amazon. The price difference can only be a few cents for the buyer, but can lead to higher profit margins for Amazon.
And last month, Tide announced it was launching new packaging and switching from its usual bottle to an "eco-box" that looks like box wine, and the new box contains 60 percent less plastic and 30 percent, according to Procter & Gamble less water than the bottled version, and does not require any additional packaging or bubble wrap, making it more environmentally friendly than a plastic bottle, but Eco-Box's eco-box is not just about sustainability, it's also about e-commerce. 19659007] "For the first time, we've designed an eComm-Back package that starts with the unique challenges and opportunities that come with the ecommerce environment," said Sundar Raman, vice president of North American Textile Care, P & G In a statement last month, it's not clear if the Tide redesign was the result of talks with Amazon, but according to the Journal's report Both Coca-Cola and Seventh Generation have been packaging after discussing with Amazon.
Eco-Box Designed Specifically by P & G Fabric Care's eCommerce Innovation Group is a company-focused industry focused on making products suitable for online shopping and shipping. "We know that the" last mile "in e-commerce is the biggest challenge both economically and ecologically," said Isaac Hellemn, brand manager for e-commerce innovation at P & G Fabric Care. "E-commerce is not a trend more, it's a reality and we look forward to innovating further. "
Some brand managers told the Journal that Amazon's profits were beaten to their detriment. Changing packaging and price reductions may be beneficial to Amazon's bottom line, but not to the brand's own profits. But refusing to adjust can hurt sales, especially as Amazon is making its own brands stronger.
Amazon's brands are not only a way to increase profits – they also leverage the company when negotiating with companies like Unilever or Procter & Gamble, whose own brands could be pulled off the site, CNN reported Business in October.
The fact that brands prefer to spend money on re-designing – and, in the case of Procter & Gamble – developing an entire e-commerce innovation team, shows how much they depend on online sales. And with Amazon controlling nearly half of the ecommerce market, eMarketer Retail reports in July that brands are becoming increasingly committed to Amazon.