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Amazon destroying millions of items of unsold stock in one of its UK warehouses

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Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#91

Post by fallinghawks »

slownews45 wrote: post #84
fallinghawks wrote: post #80

Trashing returns of perfectly good products is unfortunately nothing new. I had a friend who worked at a transfer station in the early 2000s that got sent returns from PetSmart. The return reason was written on a label. Some stuff was defective of course, but others, it was some trivial reason like the customer didn't like the color. The item was in otherwise perfect condition and going to the landfill. I name PetSma…

One issue is the liability risk. Especially food type products, retailers are really worried about putting something back on the shelf that has been out of their control. What's the brand damage if returned petsmart food kills 20 animals because someone was tampering with it? For most folks it's not worth the risks.

I'm not talking food, but items like automatic watering bowls, nail clippers, pet carriers, still in package, some sealed in that plastic that is really hard to cut open.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#92

Post by oasisbob »

londons_explore wrote: post #38
JCM9 wrote: post #20

This is not ideal, but par for the course in the CPG sector. You’d be shocked how much food your local grocery store throws out each week too. Also the quality of the reporting is very poor and mostly seems intent at just making Amazon look bad. How much do others destroy? It’s a lot. There’s no ability for the reader to understand if this is bad (relatively speaking) or not.

Grocery stores in the UK have shrinkage rates of 2% or so. That includes theft, damaged items, and expired/unsellable food. 2% really doesn't sound bad, and I would guess is substantially lower than Amazon sees - especially considering estimates I could find suggest that the vast majority of that 2% is theft.

One thing which makes 2% seem much worse for a grocery store is their thin margins.

The gross profit for just about anything at Amazon is going to astronomical compared to just about any food category.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#93

Post by romwell »

msg wrote: post #4

Amazon warehouses are shelters for things. Either someone pays the fee and adopts the thing, or it goes to the farm upstate. There are lots of thing mills breeding special things that wind up in the shelter. It's a cold and cruel business, but that's humans trying to make a buck for you. If things don't get adopted, they don't always get killed though. Sometimes they get adopted for pennies on the dollar, and move el…

>Either someone pays the fee and adopts the thing, or it goes to the farm upstate.

Yeah, and everyone else (but not Amazon!) will pay the "upstate farm" fee, aka environmental damage, for eternity.

Aren't externalities great?

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#94

Post by z77dj3kl »

lotsofpulp wrote: post #90
CarelessExpert wrote: post #65

Earlier quoted context omitted.

> Economics are immune to guilt ... Regardless of the solution, moralizing is ineffective. I'm just gonna quickly point out: This is simply not true and I'm surprised you'd make the claim. PR is a huge deal for most companies, and public shaming through press coverage is a very effective way to raise awareness of issues and push for change. Nike, for example, didn't address issues of sweatshop labour out of the goodn…

Did Nike address anything? I assumed everyone was still manufacturing in poorer countries due to more lax labor and environmental laws. They might run some ads how they changed suppliers or something, but people are not going to pay double or triple for clothing so a factory worker in Bangladesh can get a better quality of life at work. People will not even pay more so their neighbors and countryman can have a better…

No, but they will pay 2% more to fix something if it means 5% of customers don't write them off as "awful, unethical, big corp" and not buy stuff from them.

There are plenty of examples of companies that did or did not react to negative PR, but the effect is in the statistics, not the individual anecdata.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#95

Post by crazygringo »

kevincox wrote: post #87
crazygringo wrote: post #66

Earlier quoted context omitted.

> Thats why you rarely see discounts >30% in amazon warehouse I think it's more that, if an item is in genuinely resellable working condition, lots of people are willing to pay 70% for it, so there's no reason to go lower. Heck, stuff in excellent condition is usually around 90% the original price, because people will pay it. The fact that Amazon permits third-party sellers to sell used items in the first place seems…

> I think it's more that, if an item is in genuinely resellable working condition, lots of people are willing to pay 70% for it That isn't the author's point. If it cost 20% of the price to produce and ship a product to the end user (AKA 400% markup, which isn't unreasonable for many items) then providing a discount >20% is less profitable than selling a new item at full price. Obviously it isn't an exact formula (yo…

See my second paragraph. I addressed precisely that.

It is indeed what you say -- "you may capture sales that you would have otherwise lost" -- and that Amazon prefers to capture those rather than having another site capture then. Remember, people who are highly price-conscious compare sites.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#96

Post by BobbyJo »

CarelessExpert wrote: post #65
LeifCarrotson wrote: post #27

The report would be a lot more useful if there were some context for this data. How many items do comparable places like Wal Mart warehouses destroy each week? What's the reason for these items being marked for destruction? What percentage of the products are these; how many items go through the warehouse per week that are not destroyed? I expect these are products returned with defects, that have been issued recalls…

> Economics are immune to guilt ... Regardless of the solution, moralizing is ineffective. I'm just gonna quickly point out: This is simply not true and I'm surprised you'd make the claim. PR is a huge deal for most companies, and public shaming through press coverage is a very effective way to raise awareness of issues and push for change. Nike, for example, didn't address issues of sweatshop labour out of the goodn…

Those are exceptions, not the rule. PR's importance is very variable. Nike, as a luxury brand, has to care what people think about it. People seeing it as a 'good' brand is the core of their business. This is simply not true for 99% of companies. Most companies on the planet could get all the bad PR in the world, and even if, by some miracle, you remembered their name, you wouldn't even know when you buying their products.

Even when you only consider public brands, doing bad things, more often than not, is just ignored, especially if they aren't a luxury brand trying to sell based on perception (Nestle).

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#97

Post by romwell »

ajross wrote: post #71
silicon2401 wrote: post #26

Earlier quoted context omitted.

Give them away for free. we should incentivize under-production, not over-production. charge more for waste disposal

You can't give counterfeits away, you'll be sued. You can't give unlicensed or embargoed products away, you'll be fined. Give away damaged or defective goods and you'll see even worse PR than this story. You can only give away the stuff you "could" sell but can't find a buyer for, which (1) pretty much means no one wants it and (2) will poison your relationship with the people who sell you the stuff you *can* resell!

Yes, that's why we need to removing the externality of destroying goods (and all of us enjoying the environmental damage) by making it cost more to destroy something than to give it away (which may include refurbishment, repackaging, etc).

What, you tried selling a made-for-landfill thing that works half the time? Should've done your research. Choose your loss.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#98

Post by djbebs »

oasisbob wrote: post #92
londons_explore wrote: post #38

Earlier quoted context omitted.

Grocery stores in the UK have shrinkage rates of 2% or so. That includes theft, damaged items, and expired/unsellable food. 2% really doesn't sound bad, and I would guess is substantially lower than Amazon sees - especially considering estimates I could find suggest that the vast majority of that 2% is theft.

One thing which makes 2% seem much worse for a grocery store is their thin margins. The gross profit for just about anything at Amazon is going to astronomical compared to just about any food category.

Amazon's margins are in line with most supermarket chains.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#99

Post by romwell »

float4 wrote: post #5
Brendinooo wrote: post #2

Why? The article seemed to focus more on the "what" and "how".

A lot of products are returned in used state, or have very slight use marks like scratches, tiny dents, protective foil that's been removed, etc. These items therefore can't be resold as new. Finding out exactly which items are and are not good enough is expensive, and therefore the items are just discarded.

>Finding out exactly which items are and are not good enough is expensive, and therefore the items are just discarded.

Correction. It's expensive in comparison to the cost of discarding (including disposal/environmental damage fees).

Which is something we can actually change.

Re: Amazon destroying millions of items of unsold stock in one of its UK warehouses

#100

Post by twiddling »

ajross wrote: post #19
float4 wrote: post #10

This has been known for years, at least in Europe. German article from 2018: https://www.wiwo.de/unternehmen/handel/das-ist-ein-riesengro... Edit: people replying seem to think that I'm saying that: 1. only Amazon does this; 2. it can be prevented but Amazon just chooses not to. I didn't say any of those things.

ALL retailers destroy unsellable inventory. Items can be defective, counterfeit, damaged, under legal injunction like a trade dispute, incorrectly licensed, or just plain unwanted. If you trade in any item anywhere eventually you're going to end up with something in stock you can't sell. I mean, what do we want to happen? These things to sit idle forever in a warehouse taking up space?

I worked in an electronics store in the '80s. Once a month we would have "TV day", where all the warehouse guys would smash old TVs and other gadgets. Great way to relieve stress...
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