Amazon is one of the largest e-commerce companies in the entire world and it is obvious that the company would rarely see a 100% sale of goods from its warehouses and each month, the company is looking out for a fresh inventory. It does not work that way! There is a significant percentage of products and items that are not sold each month and Amazon destroys them to clear out their warehouses.
Recently, Amazon has announced that it is planning to open a few discount stores or brick and mortar outlets where they would display all unsold items for sale at a significantly discounted price, as reported by Bloomberg.
According to a report from 2019, detailed information is mentioned how Amazon destroys thousands of unsold products every month to clear out its inventory. Products range from Television sets, household items, furniture, diapers etc., although later on, Amazon pledged to donate unsold products as an effective way to clean out their warehouses and clear their inventory, according to the 2019 report.
Keeping the uncertainty in mind, Amazon plans to open discount outlets to display these items for sale at a significantly cheaper price to attract customers attention. The company has been examining the concept to sell its electronics and home-based products with a cheaper price tag, according to Bloomberg.
The company will most likely source these products from its inventory to warehouses and is looking forward to opening its stores in permanent locations such as shopping malls, parking lots etc. As mentioned in a report by Engadget, Amazon says that it will keep items in its pop-up stores that take significantly smaller space such as toys, kitchen items, electronics and home goods essentials. The company refused to keep clothing items in these stores as it would take up a lot of space in the store.
Amazon is holding back the execution of this idea because of the COVID-19 pandemic and its impact on retail business. The -commerce company has an already existing retail presence with its Fresh grocery store chain. Other than this, Amazon is operating more than 500 whole food stores- Amazon Go, 96 Amazon Fresh and other pop-up stores. The COVID-19 pandemic has significantly impacted these businesses where people were forced to shut inside their houses for months and since the induced lockdowns have been lifted, the business is operating in recovery mode.
Amazon says that Black Friday and other sales that are very much popular among the masses would drive in customer attention to its electronics discount stores and it is significantly good for sales, but the plans holds still till the pandemic is declared over.