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.
Amazon does this - in the UK there's companies like John Pye who do 'remaindered goods auctions'. There's a John Pye warehouse less than half an hour from this specific Amazon warehouse.
But they've not been able to do their normal auctions during the pandemic, and I expect remainder auction places have full warehouses and staffing issues. So if they're not able to take the excess stock from Amazon, Amazon's next easiest option is to dump it in the landfill.
(Source: I've bought a lot of stuff from that John Pye warehouse, including Amazon returns, and live locally to the Amazon warehouse in question.)
Amazon does sell/auction pallets of products, but it's probably their own inventory (not sure).
So most likely they won't do it for legal/logistical reasons.
Remember that Amazon doesn't move a finger if you don't pay them.
I don't see people paying amazon to have their products auctioned and amazon profiting from it. Neither I see how Amazon would split the bid between sellers. Who would be liable for that item?
You're not naive, you have products being mande and shipped from China to be destroyed in Amazon Fulfillment Centers. It's absurd.
I'm not clear on the terms of the contract. If your inventory is stranded, then does Amazon have the right to donate it or resell it themselves? It seems plausible they wouldn't have that. If it's a product they don't list, would Amazon even want to assume the extra liability for selling it directly?
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.
Yet From ebay an equivilent item, inc shipping, is [1] costing GBP 4.43 (brand new). From Aliexpress the item costs GBP 4.87. On Google, there are 10+ companies all offering this device for similar prices.
There is some kind of market failure going on that is allowing Amazon to be substantially higher priced for the same items even when the item is in non-new condition.
The price at Amazon Warehouse is entirely based on some Amazon formula relative to the current "new" price at Amazon - which can result in weird price effects such as the one you noted.
It can also result in very good prices when the "new" item drops with a coupon or similar.
That's a 24 V AC power supply with a 8 meter cable, which requires a lot more copper and iron than a little switch-mode DC plugpack with as little cable as they can get away with. They're very different products.
> but if you go to return some small value items Amazon tells you to just keep it/throw it away.
Anecdotally, this isn't always true. I have only returned a handful of things over the years, but among them was a microphone windscreen that didn't really fit. It cost maybe €6 or so and they did have me send it back.
I think in the past it was more likely they would have you keep an item. It seems to me (also anecdotally) now they don't want to take back just food items.
I think there's a correspondence between the COVID-19 reduction of their real-human chat line and having us return everything except food now.
I don't know what triggers the "keep it" option but I suspect there's a formula involving shipping price, whether it is a shipped/sold by Amazon or a marketplace vendor, account standing, etc.
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.
> 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...