Amazon bans vendors advertising “CRaP” unprofitable products

Ben StevensEcommerce News

Amazon has begun preventing vendors and wholesalers from advertising any products which struggle to turn a profit.

According to a report from CNBC, Amazon has been ramping up efforts to increase its profits by blocking advertisements of items which it cannot make money on.

It has reportedly been telling vendors and wholesalers on its platform that if a product sells for less or as much money as it costs to store, pack and ship, it will no longer allow them to advertise it.

This move, the latest in a string of measures aimed at driving up profitability, will only affect direct vendors and not third-party merchants, which now account for over half the products on the platform.

READ MORE: Amazon to scrap all 87 pop-up stores

It is understood that these products are referred to by Amazon as “can’t realise a profit” or “CRaP” for short.

An email sent to an Amazon vendor, seen by CNBC, read: “One or more of your products no longer qualifies for advertising because the sale of this product on Amazon.com currently results in a loss to Amazon”, adding that they needed to “lower the product’s cost” to become eligible.

In response an Amazon spokesperson said: “Like all retailers, Amazon decides which products to market and promote in our stores based on a variety of factors, such as relevancy, availability, profitability and other factors.”

Advertising is one of Amazon’s fastest growing and most profitable arms, seeing its revenues more than double last year to $10.1 billion (£7.65 billion), a figure expected to grow another 50 per cent this year.

Click here to sign up to Charged‘s free daily email newsletter


Ben StevensEcommerce News

1 Comment. Leave new

Avatar
Ashray Mutha
March 22, 2019 5:15 am

A larger share of profits comes from advertising on amazon and this could reduce the profits as not all products have a large demand.

Reply

Leave a Reply

Your email address will not be published. Required fields are marked *