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, that were damaged during shipping, that expired, and all the other streams that aren't the 'happy path' of New product from manufacturer -> Amazon warehouse -> End user for lifetime of product. (Edit: or returned with no defects other than a lack of assured quality and possibly damaged packaging, but still not economically viable to ship back, verify, repackage, and relist as new and unused).
How much money, time, and energy would it take to ship them back to manufacturers where expert technicians could refurbish them to like-new condition if they're broken and fixable, to mark them down and sell them as blemished if they're cosmetically unacceptable but still functional, or to otherwise rescue them from destruction? As an industrial controls engineer in the manufacturing sector, I expect it's a lot more than just discarding it and fabricating a new one from raw materials on an automated production line.
I try to make my lines as flexible as possible, but there's an economy of scale problem that won't be put back into Pandora's box by shaming people with articles containing big numbers. Economics are immune to guilt, you have to find another way to penalize the behaviors you dislike or incentivize the behaviors you want. The reality is that it's really cheap and fast to build new things with low-touch mass production, making them easily diagnosed and repaired is less efficient, and the math says that it's cheaper to make 98% of your parts cheaply and write of 2% to waste than it is to spend 10% more per unit and have zero waste. I expect that the solution has to come either from technology that makes repair, self-diagnosis, packaging, and/or shipping cheaper, or from regulation that makes the 2% write off more expensive than 2%. Regardless of the solution, moralizing is ineffective.
> 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 goodness of their hearts, nor was it technology or government action that caused them to reform their practices. It was pure, simple public pressure that did the job.
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).
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 quality of life.
From what I've seen, bad PR forces a company to make some bullshit changes that rarely, if ever, address the actual issue.
"Due to the allegations of sexual misconduct, we have forced everyone in the company to go through mandatory training"
"Sorry for polluting the river, we've donated a fraction of our annual profits to a non-profit and we'll do a half-assed job of cleaning up the mess even though the damage has already been done"
"In response to the recent report of terrible worker conditions, we are making changes at these locations to offer mental health services and an additional day off each year, we will continue to evaluate the needs of the employees and make changes where necessary"
People get outraged, they see an apology and some half-assed attempt to put the issue to rest and then people forget about it.
"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?"
If you read the article you might have caught some context:
"Many vendors choose to house their products in Amazon’s vast warehouses.
But the longer the goods remain unsold, the more a company is charged to store them. It is eventually cheaper to dispose of the goods, especially stock from overseas, than to continue storing the stock."
and
""Overall, 50 percent of all items are unopened and still in their shrink wrap. The other half are returns and in good condition. Staff have just become numb to what they are being asked to do.”"
> The report would be a lot more useful if there were some context for this data.
I disagree with this, or at least the implication that there should have been more information gathered before publication.
If the data is surprising against a common-sense set of expectations, it's Amazon's burden to provide a context for interpretation where the surprising information makes sense, not the report.
Assuming the report's facts are in order, reporting accurate facts and leaving "contextualization" to someone else is good journalism, especially if the facts themselves are not widely known or actively hidden.
> reporting accurate facts and leaving "contextualization" to someone else is good journalism
How is that good journalism? If you're writing a piece about something that you feel people should be outraged about, you need to provide context. Otherwise, any number will seem absurd when talking about operations at an industrial scale. People have zero grasp of how much garbage and waste is created. Providing that context is key to the story.
It would be useful but it would probably require Amazon’s cooperation. I agree that it doesn’t mean the reporter did anything wrong to run the story with the info they could gather. Maybe someone from Amazon will explain in response to this story?
But there is a mystery at the heart of this story. Amazon’s decisions seem hard to explain. We should let it remain a mystery until we learn more, without either assuming they’re evil villains or speculating that there must be a logical explanation.
(And it might have been good for the story itself to say this.)
> 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?
Enormous amounts of all, and everything. I worked for most of my life in the cheaper side of electronics industry.
Brands themselves often destroy huge amount of unsold stock.
Apple famously quietly buys their iStuff from industrial refurbishers for destruction, to reduce the number of second hand iphones going around, and intentionally made engineering choices to make refurbishing very hard before.
"Luxury" brands often mandate their retailer to always destroy unsold stock, and set goals like "no more discount for you if you let stock to hang on the shelves longer than 3 months"
The entity that throws these things away is called something like "Amazon Warehouse 123", and its business is to accept goods that belong to others in bulk, keep them for a while, and finally either ship them singly to regular buyers, in bulk to the owner or someone else, or throw the away. The discarded goods are ones for which the owner either has told Amazon Warehouse 1234 to discard, or the owner has stopped paying or otherwise relieved the warehouse of its obligation to… warehouse those goods.
Would you regulate the owner (which is often another Amazon subsidiary, but may also be someone else)? The warehouse? And what would you make them do?
There may be a portion of these items that is excess or obsolete and cannot be otherwise disposed of.
There are accounting rules (which are both reasonable and justified) which force companies to write down this kind of inventory (i.e. it hits the P&L). Additionally, there are real costs associated with keeping these items in the warehouse which justify their disposal.
I once worked on an E&O project at a large public company, and finding reasonable ways to dispose of this type of inventory was very difficult. Most ended up in the trash.
In any event, the reporting on this subject is, once again, pretty inadequate and reads as borderline advocacy in the media's opposition to all things Amazon.
Shh! You're destroying the narration! Who would otherwise find it shocking? /s
Media outlets suck at providing context to numbers. It's ironic they always measure every goddamn thing with football fields and olympic swimming pools, but can't be bothered with percentages.
The data was gathered by an undercover reporter who presumably had limited access to systems and reported on what they could. Amazon were free to provide the context, but chose not to. They are also virtually alone in the scale of their business, so context stops really having any meaning: even if they actually destroy ten times less (as a percentage of items sold) than other smaller retailers, a single Amazon warehouse in a single country destroying ~20,000 items a day is still noteworthy.
No Amazon definitely destroys most returns. I was informed that anything you can take to a Kohl’s is destroyed after return. That’s why sometimes it’s not available as an option.
That's not true -- you were informed wrong, sorry.
Tons of items on Amazon list "Amazon Warehouse" as a cheaper buying option, which are literally the returned items they're reselling, with a listed condition determined from inspection. This includes items that were returned at Kohl's.
Amazon destroys some returns, but that happens after the inspection process, if they determine the specific item was damaged enough that it's not profitable to resell.
For 5 years now I've actually been receiving Amazon returns at my office for some reason, and only for Raspberry Pi sound card components. I've tried contacting Amazon every way, including emailing the personal address of Jeff's (which led me to priority support), but they still keep shipping me these returns.
I’m pretty sure I just saved a previously returned item from this fate. I bought something just yesterday from Amazon labeled as “new, but with a damaged box”. The item was heavily discounted, I think around 40% off. I could care less what the box looks like or if the individual parts aren’t wrapped perfectly if the item is in good working condition.
First of all, "130K" is a meaningless number except as a percentage of items sold/returned. Curiously, the article neglects to mention this. Plus, you need to compare that percentage with other retailers.
Second, this happens with any business.
For new products, it's stuff Amazon has determined simply isn't selling and is unprofitable to continue storing in the limited warehouse space. Better to chuck it and make space for products that are actually selling.
While for returns, they're going to be items that are similarly unprofitable to sell. "Amazon Warehouse" is the seller on Amazon that sells returned items -- and they resell a ton of the returns -- but there isn't always a price point that is both low enough that people are willing to buy the cheaper returned item, but still high enough that it's profitable for Amazon to continuing stocking it and ship it.
Now a lot of businesses (e.g. BestBuy I'm assuming) sell certain types of returned items, particularly electronics, in bulk to eBay resellers. That's where you can people selling things like a single model of webcam in "open box" condition for ~50% off retail, they've got 100 units for sale that "may have cosmetic scratches but 100% functional" and the photograph is "representative". Which is great. But since Amazon has its own internal "Amazon Warehouse" reseller, I'm not sure it ever does this.
What's beyond me is why they can't find a minimal effort solution that still nets them a minimal profit or at least costs them less than disposal. I'm sure they're paying to dispose of this stuff.
Around the US, Goodwill has what it calls "outlet stores", where anything that didn't sell at Goodwill (a low bar to clear) gets sent and dumped into giant bins to be sold as-is by weight, as a last chance at redemption before the landfill. Despite the low quality of the goods, the stores are usually packed, and even Goodwill rejects have value. Before the pandemic my wife and I enjoyed the cheap entertainment of picking stuff up for a song and reselling it on eBay for fun.
I for one would gladly sift through bins of Amazon returns and buy them by weight. If you have "valuable" waste like this there's no need to ship it, people will come to you.
> isn't always a price point that is both low enough that people are willing to buy the cheaper returned item, but still high enough that it's profitable for Amazon to continuing stocking
I don't think this is how the prices on Amazon Warehouse are set... I suspect Amazon or Amazons third party sellers consider most warehouse sales to be a lost sale of the 'new' item. That means it's better to destroy the item than sell it at a discount greater than the production cost of a new item.
Thats why you rarely see discounts >30% in amazon warehouse, despite the fact any price over a few dollars probably pays for the storage and shipping costs.
Remember destroying items costs money - in many countries there is a tax on landfill, which for many items can work out about the same cost as shipping it to someone at amazons scale.
> 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 to be evidence that Amazon isn't worried about them cannibalizing sales of new items. And after all, Amazon knows buyers interested in used items might buy elsewhere anyways, so Amazon prefers to make that profit itself. That's why "Amazon Warehouse" exists in the first place.
On eBay, when you find items that are akin to "open box" but are only 40% or 30% of the original price, there's usually something seriously defective -- the screen doesn't work, it's missing a required accessory, etc. They're basically being sold for parts. That's just not the business Amazon's in.
> there isn't always a price point that is both low enough that people are willing to buy the cheaper returned item, but still high enough that it's profitable for Amazon
This doesn't seem to match what the article is listing:
> There's no rhyme or reason to what gets destroyed: Dyson fans, Hoovers, the occasional MacBook and iPad; the other day, 20,000 Covid (face) masks
Any MacBook or iPad will sell for more than the cost of shipping. Dyson fans will as well. There are other reasons it's not done.
The article is cherry-picking for sensationalism. Those aren't representative, obviously. And the "there's no rhyme or reason" is the author's (entirely unsupported) opinion, not a fact.
Amazon is a for-profit business. It's not intentionally dumping MacBooks it can resell profitably.
Obviously neither of us knows in this particular circumstance, but one would assume they were damaged enough to not be resellable, that a mistake was made somewhere, or a third-party seller using FBA requested them disposed of for some reason (e.g. an ancient used model there was no more demand for).
> First of all, "130K" is a meaningless number except as a percentage of items sold/returned.
No, it's not. 130k of _anything_ is a stupidly high amount. It may be 0.1% of items sold, it's still 130 000 perfectly good items destroyed. In many countries, supermarkets are obligated by law to give away unsold food as long as it is not perished. The exact same thing should happen to Amazon.
I'm not sure why you are being downvoted: 130k is a lot, specially when you consider this is just one warehouse in the UK. Extrapolate this number (including other retailers) and we might be talking about millions of products being destroyed daily on this planet just to increase profit margins for a few people.
The negative externalities from this must be tremendous.
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.
Newpapers / books etc used to get pulped regularly. Seriously - back when your local newsdealer sold papers the way it worked is you'd tear off the front page of paper and pulp the rest. You'd be credited unsold copies based on the torn off front page. This was national - and daily.
Books used to have print runs, after 2 years or even less, anything excess got pulped (millions of items).
If you work in a western grocery store - the expiration date thing used to be ridiculous (perfectly good food in my view going out door). They wouldn't let workers take it home either because of potential conflicts. Inventory management has improved significantly here though I think (still an issue of course).
Amazon charges enough to cover the costs of the returned products. I've even been asked to throw away items myself (I returned something, they credit me the funds and asked I dispose of the item myself).
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.
It's important to have the article properly framed, though. If you didn't organize and get rid of (sell or toss) unused things at your place, you're eventually going to end up under piles of garbage nobody wants unless you somehow anticipated all your own needs perfectly.
At some point you buy something you thought you'd need that you didn't. The same goes with businesses trying to sell. The difference from cleaning up your software project is that getting rid of physical product is not just deleting a few lines of code. It has to go somewhere.
What if the article is written as follows:
"Before Amazon came along, a store of its kind would routinely dispose of 1 million perfectly good products each year. Now thanks to a series of complicated quantum neural artificial inteligence robots, matching an army of bargain hunters with stock destined for landfill an 87% reduction in waste has been achieved this year alone. Thanks Jeff for saving the world, again!"
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 elsewhere in the system.
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...
> Germany's largest online retailer also offers external providers who use the “Dispatch by Amazon” logistics service the opportunity to dispose of unsold inventory.
This implies those providers can dispose of the unsold inventory how they see fit, possibly by selling it wholesale or for parts, etc. This doesn't seem like a huge crime.
I've watched a couple of giant-box openings on youtube where people buy unsold/returned stuff (and feeling my soul draining through my eyeballs) and decided that the landfill is just exactly where most of this stuff needs to go.
Perhaps that can be the model of the New Economy. All of the 'knowledge workers' can design/manage surveillance and all of manufacturing can provide piles of things that go immediately to the dump.
In the UK a lot of the Amazon returns end up on John Pye auctions, which haven't been running at the same volume during the pandemic.
I wonder if Amazon are having to dispose of more items this way because their usual liquidation disposal chain is massively backlogged? If people like John Pye have all their warehouses already full, then there's nowhere for Amazon to send the stuff they'd normally dispose of that way, so it ends up at the local dump.
(Which, as an aside, is my local dump, as I live ~5 minutes drive from this specific Amazon warehouse, and the pictures in the piece match the local landfill site.)
This article doesn't but the original itv article mentions it:
> Why are hundreds of thousands of products being destroyed in this way? The answer is Amazon’s hugely successful business model. Many vendors choose to house their products in Amazon’s vast warehouses. But the longer the goods remain unsold, the more a company is charged to store them. It is eventually cheaper to dispose of the goods, especially stock from overseas, than to continue storing the stock
My guess would be about inventory space, shipping costs, returns, and stranded inventory.
Amazon has been fiddling with sellers inventory space on Amazon fulfillment centers for some years, and they keep reducing it, and penalizing sellers who don't sell enough (either by increasing their inventory fees, or reducing their storage volume).
For some sellers destroying inventory is probably the best option. Some product returns can't be sold, so you pay to have them destroyed.
So it's not just Amazon decision (I mean, if you leave stranded inventory and you don't move it, Amazon will warn you, and if you don't do anything then they'll destroy it).
What's stopping them from doing a lot auction (a la storage wars). Is it brand damage to whatever products are in it?
I mean, the naive idealist in me just want stuff that has already been produced to at least get used for a bit, even if it ends up being sold on ebay or craigslist.
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.
>About half of the items marked for destruction were still in their shrink-wrap, while the other half were returned items in good condition, they said.
Amazon Warehouse attempts to get some value out of things that are easy enough or worth it to do a cursory inspection - but if you go to return some small value items Amazon tells you to just keep it/throw it away.
The amount of retail "wastage" that occurs would be surprising to many - one you may have seen is the "book without cover has been reported destroyed" you sometimes see - it's not worth it for publishers to have booksellers ship back unsold inventory.
But then why waste resources on shipping back the items if they are going to be destroyed? Is it because if customers find out this is happening there'd be a spike in returns?
If a customer returns an item they don't like the color of, Amazon will see the package has been opened, and mark it unsellable.
If the manufacturer wants to get the item back to sellable condition (for example, by refurbishing it, and selling it as such), they have to pay for return shipping from the customer (~$6) and a "cross border removal order", costing ~$10 per item. Then they get the item back, and have to have staff to check and refurbish it, and then need to resell it (paying all of Amazons fees again, up to 40% of the retail price)
For most items, it's cheaper just to trash the item and manufacture a new one.
Amazon also charges for the disposal itself[1]. Although they're likely not going to receive payment from delinquent accounts, it's something sellers in good standing have to account for.
Amazon charges a monthly storage fee[2]. If your inventory hasn't moved within a year, you'll start getting charged a supplemental long-term storage fee[3] on top of that.
If you want Amazon to ship the inventory back to you, there's a removal fee[4] for that. Or Amazon can get rid of it for you, but there's a disposal fee[1] for that. And the fees for both options are actually the same, the deciding factor is really just whether you want to keep control over it (and have the capacity to receive/store it somewhere) or you want to pay Amazon to take it off your hands entirely (at which point they can do what they want with it).
... thinking about it, I wonder if this is how counterfeits end up working their way into the official "Sold by Amazon" supply chain.
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 PetSmart only because my friend was on the lookout for pet stuff; it would be no surprise if other retailers had the same policy.
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.
Some items were new in box and sealed. It's the same situation as Amazon, except Amazon is at a vastly larger scale. The manufacturer isn't going to repair it and doesn't want it back.
Readit News
I expect these are products returned with defects, that have been issued recalls, that were damaged during shipping, that expired, and all the other streams that aren't the 'happy path' of New product from manufacturer -> Amazon warehouse -> End user for lifetime of product. (Edit: or returned with no defects other than a lack of assured quality and possibly damaged packaging, but still not economically viable to ship back, verify, repackage, and relist as new and unused).
How much money, time, and energy would it take to ship them back to manufacturers where expert technicians could refurbish them to like-new condition if they're broken and fixable, to mark them down and sell them as blemished if they're cosmetically unacceptable but still functional, or to otherwise rescue them from destruction? As an industrial controls engineer in the manufacturing sector, I expect it's a lot more than just discarding it and fabricating a new one from raw materials on an automated production line.
I try to make my lines as flexible as possible, but there's an economy of scale problem that won't be put back into Pandora's box by shaming people with articles containing big numbers. Economics are immune to guilt, you have to find another way to penalize the behaviors you dislike or incentivize the behaviors you want. The reality is that it's really cheap and fast to build new things with low-touch mass production, making them easily diagnosed and repaired is less efficient, and the math says that it's cheaper to make 98% of your parts cheaply and write of 2% to waste than it is to spend 10% more per unit and have zero waste. I expect that the solution has to come either from technology that makes repair, self-diagnosis, packaging, and/or shipping cheaper, or from regulation that makes the 2% write off more expensive than 2%. 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 goodness of their hearts, nor was it technology or government action that caused them to reform their practices. It was pure, simple public pressure that did the job.
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).
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 quality of life.
"Due to the allegations of sexual misconduct, we have forced everyone in the company to go through mandatory training"
"Sorry for polluting the river, we've donated a fraction of our annual profits to a non-profit and we'll do a half-assed job of cleaning up the mess even though the damage has already been done"
"In response to the recent report of terrible worker conditions, we are making changes at these locations to offer mental health services and an additional day off each year, we will continue to evaluate the needs of the employees and make changes where necessary"
People get outraged, they see an apology and some half-assed attempt to put the issue to rest and then people forget about it.
If you read the article you might have caught some context:
"Many vendors choose to house their products in Amazon’s vast warehouses. But the longer the goods remain unsold, the more a company is charged to store them. It is eventually cheaper to dispose of the goods, especially stock from overseas, than to continue storing the stock."
and
""Overall, 50 percent of all items are unopened and still in their shrink wrap. The other half are returns and in good condition. Staff have just become numb to what they are being asked to do.”"
I disagree with this, or at least the implication that there should have been more information gathered before publication.
If the data is surprising against a common-sense set of expectations, it's Amazon's burden to provide a context for interpretation where the surprising information makes sense, not the report.
Assuming the report's facts are in order, reporting accurate facts and leaving "contextualization" to someone else is good journalism, especially if the facts themselves are not widely known or actively hidden.
How is that good journalism? If you're writing a piece about something that you feel people should be outraged about, you need to provide context. Otherwise, any number will seem absurd when talking about operations at an industrial scale. People have zero grasp of how much garbage and waste is created. Providing that context is key to the story.
But there is a mystery at the heart of this story. Amazon’s decisions seem hard to explain. We should let it remain a mystery until we learn more, without either assuming they’re evil villains or speculating that there must be a logical explanation.
(And it might have been good for the story itself to say this.)
Enormous amounts of all, and everything. I worked for most of my life in the cheaper side of electronics industry.
Brands themselves often destroy huge amount of unsold stock.
Apple famously quietly buys their iStuff from industrial refurbishers for destruction, to reduce the number of second hand iphones going around, and intentionally made engineering choices to make refurbishing very hard before.
"Luxury" brands often mandate their retailer to always destroy unsold stock, and set goals like "no more discount for you if you let stock to hang on the shelves longer than 3 months"
Aren't articles like this part of that "other way"? The start of the long path to regulation.
The entity that throws these things away is called something like "Amazon Warehouse 123", and its business is to accept goods that belong to others in bulk, keep them for a while, and finally either ship them singly to regular buyers, in bulk to the owner or someone else, or throw the away. The discarded goods are ones for which the owner either has told Amazon Warehouse 1234 to discard, or the owner has stopped paying or otherwise relieved the warehouse of its obligation to… warehouse those goods.
Would you regulate the owner (which is often another Amazon subsidiary, but may also be someone else)? The warehouse? And what would you make them do?
There may be a portion of these items that is excess or obsolete and cannot be otherwise disposed of.
There are accounting rules (which are both reasonable and justified) which force companies to write down this kind of inventory (i.e. it hits the P&L). Additionally, there are real costs associated with keeping these items in the warehouse which justify their disposal.
I once worked on an E&O project at a large public company, and finding reasonable ways to dispose of this type of inventory was very difficult. Most ended up in the trash.
In any event, the reporting on this subject is, once again, pretty inadequate and reads as borderline advocacy in the media's opposition to all things Amazon.
So they are considered perishable almost like food if not sold in season.
The new wave of brands embracing this make near no money on liquidation sales, so they don't even try.
Media outlets suck at providing context to numbers. It's ironic they always measure every goddamn thing with football fields and olympic swimming pools, but can't be bothered with percentages.
Dead Comment
Tons of items on Amazon list "Amazon Warehouse" as a cheaper buying option, which are literally the returned items they're reselling, with a listed condition determined from inspection. This includes items that were returned at Kohl's.
Amazon destroys some returns, but that happens after the inspection process, if they determine the specific item was damaged enough that it's not profitable to resell.
I don't think the existence of a Kohl's dropoff option means Amazon destroys 51%+ of their returns. Examples of people buying pallets of Amazon returns that are not destroyed: https://www.youtube.com/results?search_query=amazon+returns
Like many retailers, Amazon outsources many reverse logistics[1] operations. Some returned product is sold off. Some is destroyed.
[1] https://en.wikipedia.org/wiki/Reverse_logistics
Second, this happens with any business.
For new products, it's stuff Amazon has determined simply isn't selling and is unprofitable to continue storing in the limited warehouse space. Better to chuck it and make space for products that are actually selling.
While for returns, they're going to be items that are similarly unprofitable to sell. "Amazon Warehouse" is the seller on Amazon that sells returned items -- and they resell a ton of the returns -- but there isn't always a price point that is both low enough that people are willing to buy the cheaper returned item, but still high enough that it's profitable for Amazon to continuing stocking it and ship it.
Now a lot of businesses (e.g. BestBuy I'm assuming) sell certain types of returned items, particularly electronics, in bulk to eBay resellers. That's where you can people selling things like a single model of webcam in "open box" condition for ~50% off retail, they've got 100 units for sale that "may have cosmetic scratches but 100% functional" and the photograph is "representative". Which is great. But since Amazon has its own internal "Amazon Warehouse" reseller, I'm not sure it ever does this.
Around the US, Goodwill has what it calls "outlet stores", where anything that didn't sell at Goodwill (a low bar to clear) gets sent and dumped into giant bins to be sold as-is by weight, as a last chance at redemption before the landfill. Despite the low quality of the goods, the stores are usually packed, and even Goodwill rejects have value. Before the pandemic my wife and I enjoyed the cheap entertainment of picking stuff up for a song and reselling it on eBay for fun.
I for one would gladly sift through bins of Amazon returns and buy them by weight. If you have "valuable" waste like this there's no need to ship it, people will come to you.
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I don't think this is how the prices on Amazon Warehouse are set... I suspect Amazon or Amazons third party sellers consider most warehouse sales to be a lost sale of the 'new' item. That means it's better to destroy the item than sell it at a discount greater than the production cost of a new item.
Thats why you rarely see discounts >30% in amazon warehouse, despite the fact any price over a few dollars probably pays for the storage and shipping costs.
Remember destroying items costs money - in many countries there is a tax on landfill, which for many items can work out about the same cost as shipping it to someone at amazons scale.
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 to be evidence that Amazon isn't worried about them cannibalizing sales of new items. And after all, Amazon knows buyers interested in used items might buy elsewhere anyways, so Amazon prefers to make that profit itself. That's why "Amazon Warehouse" exists in the first place.
On eBay, when you find items that are akin to "open box" but are only 40% or 30% of the original price, there's usually something seriously defective -- the screen doesn't work, it's missing a required accessory, etc. They're basically being sold for parts. That's just not the business Amazon's in.
This doesn't seem to match what the article is listing:
> There's no rhyme or reason to what gets destroyed: Dyson fans, Hoovers, the occasional MacBook and iPad; the other day, 20,000 Covid (face) masks
Any MacBook or iPad will sell for more than the cost of shipping. Dyson fans will as well. There are other reasons it's not done.
Amazon is a for-profit business. It's not intentionally dumping MacBooks it can resell profitably.
Obviously neither of us knows in this particular circumstance, but one would assume they were damaged enough to not be resellable, that a mistake was made somewhere, or a third-party seller using FBA requested them disposed of for some reason (e.g. an ancient used model there was no more demand for).
No, it's not. 130k of _anything_ is a stupidly high amount. It may be 0.1% of items sold, it's still 130 000 perfectly good items destroyed. In many countries, supermarkets are obligated by law to give away unsold food as long as it is not perished. The exact same thing should happen to Amazon.
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The negative externalities from this must be tremendous.
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.
Books used to have print runs, after 2 years or even less, anything excess got pulped (millions of items).
If you work in a western grocery store - the expiration date thing used to be ridiculous (perfectly good food in my view going out door). They wouldn't let workers take it home either because of potential conflicts. Inventory management has improved significantly here though I think (still an issue of course).
Amazon charges enough to cover the costs of the returned products. I've even been asked to throw away items myself (I returned something, they credit me the funds and asked I dispose of the item myself).
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.
The gross profit for just about anything at Amazon is going to astronomical compared to just about any food category.
At some point you buy something you thought you'd need that you didn't. The same goes with businesses trying to sell. The difference from cleaning up your software project is that getting rid of physical product is not just deleting a few lines of code. It has to go somewhere.
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 elsewhere in the system.
Yeah, and everyone else (but not Amazon!) will pay the "upstate farm" fee, aka environmental damage, for eternity.
Aren't externalities great?
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.
I mean, what do we want to happen? These things to sit idle forever in a warehouse taking up space?
This implies those providers can dispose of the unsold inventory how they see fit, possibly by selling it wholesale or for parts, etc. This doesn't seem like a huge crime.
https://www.liquidation.com/c/sourcedfromamazonliquidations
Perhaps that can be the model of the New Economy. All of the 'knowledge workers' can design/manage surveillance and all of manufacturing can provide piles of things that go immediately to the dump.
I wonder if Amazon are having to dispose of more items this way because their usual liquidation disposal chain is massively backlogged? If people like John Pye have all their warehouses already full, then there's nowhere for Amazon to send the stuff they'd normally dispose of that way, so it ends up at the local dump.
(Which, as an aside, is my local dump, as I live ~5 minutes drive from this specific Amazon warehouse, and the pictures in the piece match the local landfill site.)
> Why are hundreds of thousands of products being destroyed in this way? The answer is Amazon’s hugely successful business model. Many vendors choose to house their products in Amazon’s vast warehouses. But the longer the goods remain unsold, the more a company is charged to store them. It is eventually cheaper to dispose of the goods, especially stock from overseas, than to continue storing the stock
https://www.itv.com/news/2021-06-21/amazon-destroying-millio...
Amazon has been fiddling with sellers inventory space on Amazon fulfillment centers for some years, and they keep reducing it, and penalizing sellers who don't sell enough (either by increasing their inventory fees, or reducing their storage volume).
For some sellers destroying inventory is probably the best option. Some product returns can't be sold, so you pay to have them destroyed.
So it's not just Amazon decision (I mean, if you leave stranded inventory and you don't move it, Amazon will warn you, and if you don't do anything then they'll destroy it).
I mean, the naive idealist in me just want stuff that has already been produced to at least get used for a bit, even if it ends up being sold on ebay or craigslist.
They're destroying new products too!
The amount of retail "wastage" that occurs would be surprising to many - one you may have seen is the "book without cover has been reported destroyed" you sometimes see - it's not worth it for publishers to have booksellers ship back unsold inventory.
Correction. It's expensive in comparison to the cost of discarding (including disposal/environmental damage fees).
Which is something we can actually change.
If a customer returns an item they don't like the color of, Amazon will see the package has been opened, and mark it unsellable.
If the manufacturer wants to get the item back to sellable condition (for example, by refurbishing it, and selling it as such), they have to pay for return shipping from the customer (~$6) and a "cross border removal order", costing ~$10 per item. Then they get the item back, and have to have staff to check and refurbish it, and then need to resell it (paying all of Amazons fees again, up to 40% of the retail price)
For most items, it's cheaper just to trash the item and manufacture a new one.
It's not cheap, and iirc cost increases over time. Amazon doesn't want their warehouses full of shit that doesn't move.
If the 3rd party stops paying and doesn't want to pay to have it shipped back to their own facility, then they need to get rid of it.
Amazon charges a monthly storage fee[2]. If your inventory hasn't moved within a year, you'll start getting charged a supplemental long-term storage fee[3] on top of that.
If you want Amazon to ship the inventory back to you, there's a removal fee[4] for that. Or Amazon can get rid of it for you, but there's a disposal fee[1] for that. And the fees for both options are actually the same, the deciding factor is really just whether you want to keep control over it (and have the capacity to receive/store it somewhere) or you want to pay Amazon to take it off your hands entirely (at which point they can do what they want with it).
... thinking about it, I wonder if this is how counterfeits end up working their way into the official "Sold by Amazon" supply chain.
[1] https://sellercentral.amazon.com/gp/help/external/G5FKTA8LXU...
[2] https://sellercentral.amazon.com/gp/help/external/help.html?...
[3] https://sellercentral.amazon.com/gp/help/external/help.html?...
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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.