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.
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.
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.
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.
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.
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.)
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.
This isn't much different than a product being rejected during manufacturing due to something like failed quality control, etc. If you're going to be outraged by this please apply that outrage consistently starting by studying how manufacturing works and then boycotting basically all factories that make anything.
This directly results in wasted labour, wasted resources, wasted money, and extra environmental damage. And all because amazon doesn't have any serious competition to force them not to waste those resources.
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.
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.
The negative externalities from this must be tremendous.
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.
> 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?...
Some items, especially for third parties, disposal is determined by the third party. This means if the item is not selling well and the third party (amazon has lots of these) doesn't want to or is not big enough to go through the liquidation approach, and doesn't want to pay storage fees and penalties for slow sales.
Other products are not selling well.
A retailer may go through a liquidator if the quality of returns is high (mostly new in box). You'll see people flipping this stuff on ebay all the time.
For premium brands there may be restrictions on resale to avoid devaluing the retail brand. Or they'll only sell in store for physical pickup (outlet style etc).
In the end calculation are made, cost to process, sort, return, restock, liquidiate etc. For items $25 or less it can quickly be not worth it to cycle the product. Especially if there ends up being scuffs and dings on the instore product etc (shoppers are rediculously picky sometimes).
That said, if this is hard to find items, they usually find a good market (returned AMD processors etc).
surveillance economy? www.google.com
Probably the scarcity by waste leads to more profits than trying to recycle, as the environmental costs of waste aren't paid by Amazon.
You can try to offload it via a box of junk auction, and they do do that, but I'm not sure how tractable it is at scale.
The article is heavy on implication and light on facts.
They are destroying things for a reason, which isn't given. It could be a bad reason of course, but probably isn't.
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.)
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.
But I guess it's the price of globalization.
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.
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.
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.
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.
There are plenty of examples of companies that did or did not react to negative PR, but the effect is in the statistics, not the individual anecdata.
Nike chooses not employ any laborers for a reason. I do not see them advertising that the people making the clothes badged with the Nike symbol are working maximum 8 hour days, or maximum 40 hours per week, or getting vacation days.
It is all prose. The sweatshop conditions and disparities in quality of life at work between developed and developing countries have been known for 30+ years. The only thing causing improvements for the laborers in developing countries is increased demand for their labor, not some unverifiable PR response by Nike.
You can only give away the stuff you "could" sell but can't find a buyer for, which (1) pretty much means no one wants it and (2) will poison your relationship with the people who sell you the stuff you *can* resell!
What, you tried selling a made-for-landfill thing that works half the time? Should've done your research. Choose your loss.
...and that's how you end up with shortages.
Also, individual employees don't get to "play it safe" in either direction. There are expected rates for grading returned items. An employee will be penalized or lose their job for wrongly marking resellable items as non-resellable (destroy), just as much as the opposite.
This gets back to what I disagree with. If Amazon's decisions seem hard to explain, the decisions should be brought to the public's attention and Amazon should explain them. There is no reason for it to remain a mystery. And they'll never explain it unless there is a price to be paid for not explaining, e.g. being perceived as wasteful.
We can hope this story blows up enough that someone else, perhaps at Amazon, reveals some interesting information. But we’re not in control of whether that happens.
Case in point: Budget Airlines.
Ryanair does everything short of punch you in the face. O'Leary literally laughs at his own customers.
And he can. Because what they going to do?
>I could care less
Why can so many otherwise seemingly intelligent Americans not grasp this simple grammatical concept?
For example, I randomly picked a 24V power supply:
https://www.amazon.co.uk/-/dp/B07P4N3H1F/
Cost: GBP 16.99, non-new + GBP 4.99 shipping.
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.
It can also result in very good prices when the "new" item drops with a coupon or similar.
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 there's a correspondence between the COVID-19 reduction of their real-human chat line and having us return everything except food now.
Thanks for your feedback. However, I’m going to stick with Webster on this one. Let’s also not forget that English has always been a hodgepodge of language mashups and slang.
https://www.merriam-webster.com/words-at-play/could-couldnt-...