[crazygringo]

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.

[Fwirt]

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.

[londons_explore]

> 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.

[crazygringo]

> 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.

[kevincox]

> 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 (you may capture sales that you would have otherwise lost) but the larger the discount the less likely it is to make sense, even if the item is "free" to sell because your profit off of the discounted "free to produce" item is less than the profit off of the new item, even after subtracting the costs.

[crazygringo]

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.

[viraptor]

> 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.

[crazygringo]

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).

[viraptor]

It's not that's obvious to be honest. We already know that expensive brands will destroy their stock rather than lower prices / allow donations.

This happens with electronics (https://www.telegraph.co.uk/environment/2019/06/04/france-ba...), clothes (https://m.huffpost.com/us/entry/us_5bad1ef2e4b09d41eb9f7bb0), food (https://www.nytimes.com/2020/04/11/business/coronavirus-dest...), etc.

[crazygringo]

Amazon isn't a luxury brand.

And if there are any luxury brands Amazon sells (are there even?) where the brands demanded Amazon return returned items to the brand for destruction... well then it's the brand that's responsible, not Amazon.

Again, Amazon's just out there to make money. It's not going to destroy swathes of merchandise it can easily otherwise make money off of. That kind of goes against the whole profit motive.

[ohgodplsno]

> 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.

[pera]

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.