Amazon too big for its own satellite sites, Quidsi cast aside

30 Mar 20172 Shares

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Amazon is shutting down Quidsi and its websites. Image: pixinoo/Shutterstock

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Amazon is never afraid to gamble despite the risk of failure. Its purchase of Quidsi was ill-fated, with news of a closure five years after the move.

Claiming that it just cannot run a profit on the likes of Diapers.com and Soap.com, about five years after it purchased them for around $545m, Amazon is shutting up shop.

Having shifted its focus towards groceries and perishables, a far cry from Amazon’s original calling, the company feels now is the time to close down Quidsi, the unit that ran the websites.

Amazon

Calling it a failure is perhaps too strong a stance to take though, considering that the purchase –  for what was a small sum in Amazon terms –  eliminated a successful rival and increased the company’s market share.

Quidsi’s New Jersey HQ will shut, with its 250-plus employees set to lose their jobs, though Bloomberg reports that some will be able to apply for other roles in the Amazon structure.

Quidsi’s moment in the sun was at the turn of the decade, when single-theme retail sites became more and more popular, and its baby products and household goods were attractive through simple URLs and easy marketing.

However, Amazon isn’t the e-commerce giant it is because it made one decision in the 1990s and stuck to it – the Jeff Bezos-led company is a master of evolution.

From its early-days status of book retail disrupter, the business has evolved into that of a provider with an endless inventory. The last piece of the jigsaw is fresh food and produce, coincidentally explored around the time of the Quidsi purchase.

AmazonFresh emerged into the public’s conscience in 2013, with news of plans to roll out an online grocery business following years of planning, tweaking and waiting. What started as a Seattle test, aided by warehouses of flowers in one of the more colourful toe-dipping exercises, was now in the wild.

Amazon’s broad retail expertise consequently meant that singular sites became less relevant. Its own limited sites – Diapers.com, for example – faded. It ate its own.

Amazon increased its overall revenues by 22pc in Q4 of 2016, the company’s most recent figures.

This is amid an ever-evolving landscape, with delivery methods now its latest focus.

In February, the company revealed it will build an enormous $1.5bn cargo hub in Kentucky, creating 2,000 jobs. These new roles will support a growing fleet of up to 40 aircraft that will deliver its goods across the country.

This followed another announcement that it was planning to create 100,000 jobs across its US warehouses in order to meet e-commerce demands.

Despite Amazon refuting suggestions that it plans to go solo in terms of package delivery, a logistics expert speaking with SFGate said these moves could seriously threaten companies such as UPS and FedEx.

It is amid this level of multifaceted success that decisions on the likes of Quidsi are made.

Amazon is shutting down Quidsi and its websites. Image: pixinoo/Shutterstock

Gordon Hunt is senior communications and context executive at NDRC. He previously worked as a journalist with Silicon Republic.

editorial@siliconrepublic.com