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Amazon to buy Diapers.com for $540 million

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Re: Amazon to buy Diapers.com for $540 million

#31
post #8

I'd be really interested in seeing how much equity the founders have left in the business. It's definitely not capital light, so I can imagine that they had to raise quite a bit of money to get it off the ground and running.

I actually read an article on how Diapers.com got started. It was a couple folks in a garage. P&G and the other diaper manufacturers wouldn't talk to someone so small, so they got warehouse club memberships and just bought mass quantities to mail out. At times, they apparently bought out the BJs and Sams Clubs within a 100 mile radius. They were doing it all on credit cards in their own cars and rented U-Hauls. Here'…

Two of my cousins own a vending machine business and for certain products they do the same thing (buying out Sam's Clubs). Why? Sam's Club volume is so much higher than theirs that even after Sam's Club tacks on their markup, it's cheaper for them to buy through them than to go to the manufacturer. It's always funny to go on these shopping trips with them, the look on a cashier's face when you have thousands of dollars of candy is priceless.

Re: Amazon to buy Diapers.com for $540 million

#32
post #12
post #9

Earlier quoted context omitted.

I'm surprised, diapers.com should be pretty well known to anyone interested in business or entrepreneurship.

Should it? Why? I have no kids and am in the UK. Is it a famous business case study? Even if it is, I'm a computer scientist not a business guy. The headline makes it sound like they bought the domain name for that figure, which is sensationalist and inaccurate.

Maybe I shouldn't go so far as to say what others should know, but I don't have kids either and I'm aware of Diapers.com, and I'm more developer than business man (or at least I suck at being a business man).

I certainly don't think the title is sensationalist, but for the sake of clarity (given the up/down votes of complaints such as yours) perhaps it should have been made more clear that a company was purchased and not a domain name. On the other hand, would there be any confusion if it was Zappos.com?

Re: Amazon to buy Diapers.com for $540 million

#34
post #13

People seem to love buying office coffee and diapers from amazon: http://www.amazon.com/gp/bestsellers/grocery

Wow, that's kind of awesome. I looked at the first 2 pages and it's literally almost entirely diapers and coffee, sprinkled in between I noticed maple syrup, coconut oil, and wipes for all those diapers and at the end a box of Honey Bunches of Oats.

Re: Amazon to buy Diapers.com for $540 million

#35
oddly enough, i went to a "founders institute" workshop just last night and one of the primary examples involves... diapers.

staple items like diapers are things people like to order without actually seeing. plus, those types of items are easy hooks to get people to buy complimentary items with bigger profit margins.

Re: Amazon to buy Diapers.com for $540 million

#38
post #24
post #20

Earlier quoted context omitted.

Wasn't broadcast.com sold for 5 billion?

broadcast.com was a company, not a domain name alone.

Having been at Y! when broadcast was bought and having seen behind the curtain, I think you are seriously overestimating what was purchased...

Re: Amazon to buy Diapers.com for $540 million

#40
post #13

People seem to love buying office coffee and diapers from amazon: http://www.amazon.com/gp/bestsellers/grocery

My guess is that it has to do with the discount Amazon offers for Subscribe & Save and the fact that diaper and coffee needs are easy to predict. Those are two things that you don't want to run out of, so it's worth buying in bulk.
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