Amazon.com Inc is closing Diapers.com, Soap.com and other sites it purchased for about US$545 million in 2011 to eliminate a dogged competitor and gain e-commerce customers.
The online retailer said it is shutting Quidsi, the unit that ran the Web sites, because it could not make a profit.
However, e-commerce analysts said Amazon probably intended to eliminate the sites as stand-alone businesses at some point and its renewed grocery push is an ideal time to consolidate brands.
“They sucked out any knowledge that team had and now they’ll put it behind the Amazon brand and steamroll those categories,” said Allen Adamson, founder of Brand Simple Consulting in New York.
More than 260 employees at Quidsi’s Jersey City, New Jersey, headquarters and customer service operation will lose their jobs in June, according to a notification sent to the New Jersey Department of Labor. Some of them will be able to apply for other Amazon jobs, according to the notice.
Quidsi also has warehouses in Kansas and Nevada.
Quidsi specialized in certain categories, like baby products and household goods, while Amazon was trying to offer infinite inventory.
However, the draw of sites like Diapers.com has faded since Amazon has become the go-to source for online shopping.
Quidsi’s share of online baby product sales declined to 2 percent in the first quarter of this year from 9 percent in the same period of 2014, according to data compiled by Slice Intelligence.
Amazon, in a statement, said it “worked extremely hard for the past seven years to get Quidsi to be profitable.”
The company’s brand experts will continue to find inventory to be sold on Amazon and its software developers will focus on AmazonFresh, the company’s grocery division.
Amazon is reinvigorating its push into the US$800 billion grocery market with an experimental convenience store and grocery pickup kiosks in Seattle.
That push made it a good time for Amazon to unify sales of diapers, soap and other products found in supermarkets under one site, Frank N. Magid Associates senior vice president of retail Matt Sargent said.
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