10 ms·

Amazon destroying millions of items of unsold stock in one of its UK warehouses

158 points by pedro-guimaraes 5y ago

Brendinooo 5y ago
Why? The article seemed to focus more on the "what" and "how".
- float4 5y ago
  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.
  - bombcar 5y ago
    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.
    - Cu3PO42 5y ago
      > 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.
      - bombcar 5y ago
        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.
      - fallinghawks 5y ago
        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.
    - londons_explore 5y ago
      It's curious to me that used items in amazon Warehouse sell for very high prices... For example, I randomly picked a 24V power supply: https://www.amazon.co.uk/-/dp/B07P4N3H1F/ 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. [1]: https://www.ebay.co.uk/itm/191620564194 https://www.ebay.co.uk/itm/191620564194
      - bombcar 5y ago
        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.
      - makomk 5y ago
        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.
  - Brendinooo 5y ago
    >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. They're destroying new products too!
    - chrisseaton 5y ago
      'In good condition' and appearing to still be in original shrink-wrap isn't good enough to sell as new to a consumer though. 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.
    - TheAdamist 5y ago
      Counterfeit, recalled, hazardous, unlicensed, etc items can all be "new". And need to be destroyed. 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.
  - soheil 5y ago
    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?
  - romwell 5y ago
    >Finding out exactly which items are and are not good enough is expensive, and therefore the items are just discarded. Correction. It's expensive in comparison to the cost of discarding (including disposal/environmental damage fees). Which is something we can actually change.
- londons_explore 5y ago
  It's due to the way amazon prices '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.
- duiker101 5y ago
  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 https://www.itv.com/news/2021-06-21/amazon-destroying-millions-of-items-of-unsold-stock-in-one-of-its-uk-warehouses-every-year-itv-news-investigation-finds https://www.itv.com/news/2021-06-21/amazon-destroying-millio...
- godtoldmetodoit 5y ago
  Tons of 3rd party sellers use the Fulfilled by Amazon program where they have Amazon store and handle all logistics on their items. 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.
  - cosmie 5y ago
    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. [1] https://sellercentral.amazon.com/gp/help/external/G5FKTA8LXU4TZPD5 https://sellercentral.amazon.com/gp/help/external/G5FKTA8LXU... [2] https://sellercentral.amazon.com/gp/help/external/help.html?itemID=3EDYEF6KUCFQTNM https://sellercentral.amazon.com/gp/help/external/help.html?... [3] https://sellercentral.amazon.com/gp/help/external/help.html?itemID=JQNPA23YWVA4SBD https://sellercentral.amazon.com/gp/help/external/help.html?...
- libertine 5y ago
  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).
  - croon 5y ago
    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.
    - trynumber9 5y ago
      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?
    - libertine 5y ago
      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. But I guess it's the price of globalization.
    - semanticist 5y ago
- deleted 5y ago
  [deleted]
dboreham 5y ago
Saw this first on the last season of "Shameless".
msg 5y ago
Amazon warehouses are shelters for things. Either someone pays the fee and adopts the thing, or it goes to the farm upstate. 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.
- romwell 5y ago
  >Either someone pays the fee and adopts the thing, or it goes to the farm upstate. Yeah, and everyone else (but not Amazon!) will pay the "upstate farm" fee, aka environmental damage, for eternity. Aren't externalities great?
VectorLock 5y ago
Presumably there is a reason these products are being destroyed, safety recalls etc., but the article doesn't seem to have any mention of that?
- deleted 5y ago
  [deleted]
- londons_explore 5y ago
  it's just cheaper for the manufacturer to make a new product than to check returns, due to the way amazons fees and policies work.
float4 5y ago
This has been known for years, at least in Europe. German article from 2018: https://www.wiwo.de/unternehmen/handel/das-ist-ein-riesengrosser-skandal-amazon-vernichtet-massenhaft-neuware/22658544.html https://www.wiwo.de/unternehmen/handel/das-ist-ein-riesengro... 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.
- ajross 5y ago
  ALL retailers destroy unsellable inventory. Items can be defective, counterfeit, damaged, under legal injunction like a trade dispute, incorrectly licensed, or just plain unwanted. If you trade in any item anywhere eventually you're going to end up with something in stock you can't sell. I mean, what do we want to happen? These things to sit idle forever in a warehouse taking up space?
  - silicon2401 5y ago
    Give them away for free. we should incentivize under-production, not over-production. charge more for waste disposal
    - kleiba 5y ago
      No producer can predict with absolute accuracy the number of items they are going to sell. If you produce too many items that you don't end up selling, you overspend on production costs. If you produce too few, you cut your revenue. Optimizing the balance between these two extremes is part of running a successful business.
    - nradov 5y ago
      Charging more for waste disposal results in illegal dumping.
    - ajross 5y ago
      You can't give counterfeits away, you'll be sued. You can't give unlicensed or embargoed products away, you'll be fined. Give away damaged or defective goods and you'll see even worse PR than this story. 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!
TonyTrapp 5y ago
I very rarely return stuff I have bought but don't end up liking (and I try to only buy stuff I know I want), and stories like this make it even more likely that I will instead resell them on local auction websites instead. Might get a little less money out of it but at least I can be more certain that the product is actually going to be used.
JCM9 5y ago
This is not ideal, but par for the course in the CPG sector. You’d be shocked how much food your local grocery store throws out each week too. 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.
- byandyphillips 5y ago
  I don't think this is a good argument that just because x industry does this that it's ok another y industry does it to justify it.
  - outside1234 5y ago
    I don't think he is making that argument -- which is why he prefaced it with "This is not ideal" -- just setting context,
  - trynumber9 5y ago
    Is it a different industry? Any customer-focused retail that readily accepts returns will inevitably have returned items that are difficult to resell.
    - jliptzin 5y ago
      And in that situation the retailer is just throwing away the product for the consumer who returned it; otherwise the consumer would probably have just thrown it away.
  - andrewstuart2 5y ago
    It's important to have the article properly framed, though. If you didn't organize and get rid of (sell or toss) unused things at your place, you're eventually going to end up under piles of garbage nobody wants unless you somehow anticipated all your own needs perfectly. 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.
itsmenow 5y ago
CBC Market place did a bit on that in Canada: https://www.youtube.com/watch?v=W1yqcagavfY https://www.youtube.com/watch?v=W1yqcagavfY
bdcravens 5y ago
A significant amount of items don't get destroyed however; many are sold on the liquidation market. https://www.liquidation.com/c/sourcedfromamazonliquidations https://www.liquidation.com/c/sourcedfromamazonliquidations
- semanticist 5y ago
  In the UK a lot of the Amazon returns end up on John Pye auctions, which haven't been running at the same volume during the pandemic. 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.)
- kingsuper20 5y ago
  I've watched a couple of giant-box openings on youtube where people buy unsold/returned stuff (and feeling my soul draining through my eyeballs) and decided that the landfill is just exactly where most of this stuff needs to go. 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.
  - RichEO 5y ago
    Link?
    - kingsuper20 5y ago
      for returns unboxing? first one on a youtube search. https://www.youtube.com/watch?v=7fDMcWYg2wU https://www.youtube.com/watch?v=7fDMcWYg2wU surveillance economy? www.google.com
LeifCarrotson 5y ago
The report would be a lot more useful if there were some context for this data. How many items do comparable places like Wal Mart warehouses destroy each week? What's the reason for these items being marked for destruction? What percentage of the products are these; how many items go through the warehouse per week that are not destroyed? 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.
- jschwartzi 5y ago
  No Amazon definitely destroys most returns. I was informed that anything you can take to a Kohl’s is destroyed after return. That’s why sometimes it’s not available as an option.
  - 5y ago
londons_explore 5y ago
This is what people should really be angry about, not the 'peeing in bottles' working conditions. 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.
- deleted 5y ago
  [deleted]
NKosmatos 5y ago
Ok, I can understand that this is how capitalism and consumerism work, it's a lot cheaper just to trash the item and manufacture a new one instead of to check returns, but why don't they donate them to schools, communities, churches (or even better gift them to low paying amazon warehouse workers)??? Out of ~130k items per week they only donated ~30k items.
- jschwartzi 5y ago
  A lot of what gets returned is plastic garbage that doesn’t even do what it says it does
soheil 5y ago
I'm not sure if this is missed or brushed aside on purpose in the article. There is a crucial difference between destroying something and burning it to the ground vs removing something from circulation in a product chain and reusing any raw materials left by third party services. 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.
crazygringo 5y ago
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.
- londons_explore 5y ago
  > 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 5y ago
    > 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.
TazeTSchnitzel 5y ago
Is the motivation similar to shoe retailers that intentionally slash unsold stock apart with knives — they don't want to discount too much?
josefresco 5y ago
I used to sell physical products on Amazon. They told me once some of my products were damaged “in shipment” and unsellable. I had to pay to return them to me, or they could just trash them.
3minus1 5y ago
I wonder if clothing returns often get destroyed. I know a lot of people will bulk order like 10 bathing suits with the intention of only keeping one or two.
fallinghawks 5y ago
Trashing returns of perfectly good products is unfortunately nothing new. I had a friend who worked at a transfer station in the early 2000s that got sent returns from PetSmart. The return reason was written on a label. Some stuff was defective of course, but others, it was some trivial reason like the customer didn't like the color. The item was in otherwise perfect condition and going to the landfill. I name PetSmart only because my friend was on the lookout for pet stuff; it would be no surprise if other retailers had the same policy.
- TylerE 5y ago
  What about infection? There many transmissible diseases amongst animal species.
  - fallinghawks 5y ago
    Some items were new in box and sealed. It's the same situation as Amazon, except Amazon is at a vastly larger scale. The manufacturer isn't going to repair it and doesn't want it back.
    - TylerE 5y ago
      How do you really verify that though? Many types of seal are pretty easy to fake, or at least replace with something that will LOOK factory to someone that doesn't see the same packaging repeatedly.
      - fallinghawks 5y ago
        Hol'up, why would Petsmart fake seal items that are going to the dump?
- slownews45 5y ago
  One issue is the liability risk. Especially food type products, retailers are really worried about putting something back on the shelf that has been out of their control. 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.
LatteLazy 5y ago
Another day, another "Amazon did a thing" story...
2OEH8eoCRo0 5y ago
It's okay guys, I don't use plastic straws so I've saved the planet.

Brendinooo 5y ago

Why? The article seemed to focus more on the "what" and "how".

float4 5y ago
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.
- bombcar 5y ago
  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.
  - Cu3PO42 5y ago
    > 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.
    - bombcar 5y ago
      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.
    - fallinghawks 5y ago
      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.
  - londons_explore 5y ago
    It's curious to me that used items in amazon Warehouse sell for very high prices... For example, I randomly picked a 24V power supply: https://www.amazon.co.uk/-/dp/B07P4N3H1F/ 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. [1]: https://www.ebay.co.uk/itm/191620564194 https://www.ebay.co.uk/itm/191620564194
    - bombcar 5y ago
      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.
    - makomk 5y ago
      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.
- Brendinooo 5y ago
  >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. They're destroying new products too!
  - chrisseaton 5y ago
    'In good condition' and appearing to still be in original shrink-wrap isn't good enough to sell as new to a consumer though. 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.
  - TheAdamist 5y ago
    Counterfeit, recalled, hazardous, unlicensed, etc items can all be "new". And need to be destroyed. 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.
- soheil 5y ago
  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?
- romwell 5y ago
  >Finding out exactly which items are and are not good enough is expensive, and therefore the items are just discarded. Correction. It's expensive in comparison to the cost of discarding (including disposal/environmental damage fees). Which is something we can actually change.
londons_explore 5y ago
It's due to the way amazon prices '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.
duiker101 5y ago
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 https://www.itv.com/news/2021-06-21/amazon-destroying-millions-of-items-of-unsold-stock-in-one-of-its-uk-warehouses-every-year-itv-news-investigation-finds https://www.itv.com/news/2021-06-21/amazon-destroying-millio...
godtoldmetodoit 5y ago
Tons of 3rd party sellers use the Fulfilled by Amazon program where they have Amazon store and handle all logistics on their items. 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.
- cosmie 5y ago
  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. [1] https://sellercentral.amazon.com/gp/help/external/G5FKTA8LXU4TZPD5 https://sellercentral.amazon.com/gp/help/external/G5FKTA8LXU... [2] https://sellercentral.amazon.com/gp/help/external/help.html?itemID=3EDYEF6KUCFQTNM https://sellercentral.amazon.com/gp/help/external/help.html?... [3] https://sellercentral.amazon.com/gp/help/external/help.html?itemID=JQNPA23YWVA4SBD https://sellercentral.amazon.com/gp/help/external/help.html?...
libertine 5y ago
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).
- croon 5y ago
  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.
  - trynumber9 5y ago
    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?
  - libertine 5y ago
    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. But I guess it's the price of globalization.
  - semanticist 5y ago
deleted 5y ago
[deleted]

dboreham 5y ago

Saw this first on the last season of "Shameless".

msg 5y ago

Amazon warehouses are shelters for things. Either someone pays the fee and adopts the thing, or it goes to the farm upstate. 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.

romwell 5y ago
>Either someone pays the fee and adopts the thing, or it goes to the farm upstate. Yeah, and everyone else (but not Amazon!) will pay the "upstate farm" fee, aka environmental damage, for eternity. Aren't externalities great?

VectorLock 5y ago

Presumably there is a reason these products are being destroyed, safety recalls etc., but the article doesn't seem to have any mention of that?

deleted 5y ago
[deleted]
londons_explore 5y ago
it's just cheaper for the manufacturer to make a new product than to check returns, due to the way amazons fees and policies work.

float4 5y ago

This has been known for years, at least in Europe. German article from 2018: https://www.wiwo.de/unternehmen/handel/das-ist-ein-riesengrosser-skandal-amazon-vernichtet-massenhaft-neuware/22658544.html https://www.wiwo.de/unternehmen/handel/das-ist-ein-riesengro... 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.

ajross 5y ago
ALL retailers destroy unsellable inventory. Items can be defective, counterfeit, damaged, under legal injunction like a trade dispute, incorrectly licensed, or just plain unwanted. If you trade in any item anywhere eventually you're going to end up with something in stock you can't sell. I mean, what do we want to happen? These things to sit idle forever in a warehouse taking up space?
- silicon2401 5y ago
  Give them away for free. we should incentivize under-production, not over-production. charge more for waste disposal
  - kleiba 5y ago
    No producer can predict with absolute accuracy the number of items they are going to sell. If you produce too many items that you don't end up selling, you overspend on production costs. If you produce too few, you cut your revenue. Optimizing the balance between these two extremes is part of running a successful business.
  - nradov 5y ago
    Charging more for waste disposal results in illegal dumping.
  - ajross 5y ago
    You can't give counterfeits away, you'll be sued. You can't give unlicensed or embargoed products away, you'll be fined. Give away damaged or defective goods and you'll see even worse PR than this story. 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!

TonyTrapp 5y ago

I very rarely return stuff I have bought but don't end up liking (and I try to only buy stuff I know I want), and stories like this make it even more likely that I will instead resell them on local auction websites instead. Might get a little less money out of it but at least I can be more certain that the product is actually going to be used.

JCM9 5y ago

This is not ideal, but par for the course in the CPG sector. You’d be shocked how much food your local grocery store throws out each week too. 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.

byandyphillips 5y ago
I don't think this is a good argument that just because x industry does this that it's ok another y industry does it to justify it.
- outside1234 5y ago
  I don't think he is making that argument -- which is why he prefaced it with "This is not ideal" -- just setting context,
- trynumber9 5y ago
  Is it a different industry? Any customer-focused retail that readily accepts returns will inevitably have returned items that are difficult to resell.
  - jliptzin 5y ago
    And in that situation the retailer is just throwing away the product for the consumer who returned it; otherwise the consumer would probably have just thrown it away.
- andrewstuart2 5y ago
  It's important to have the article properly framed, though. If you didn't organize and get rid of (sell or toss) unused things at your place, you're eventually going to end up under piles of garbage nobody wants unless you somehow anticipated all your own needs perfectly. 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.

itsmenow 5y ago

CBC Market place did a bit on that in Canada: https://www.youtube.com/watch?v=W1yqcagavfY https://www.youtube.com/watch?v=W1yqcagavfY

bdcravens 5y ago

A significant amount of items don't get destroyed however; many are sold on the liquidation market. https://www.liquidation.com/c/sourcedfromamazonliquidations https://www.liquidation.com/c/sourcedfromamazonliquidations

semanticist 5y ago
In the UK a lot of the Amazon returns end up on John Pye auctions, which haven't been running at the same volume during the pandemic. 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.)
kingsuper20 5y ago
I've watched a couple of giant-box openings on youtube where people buy unsold/returned stuff (and feeling my soul draining through my eyeballs) and decided that the landfill is just exactly where most of this stuff needs to go. 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.
- RichEO 5y ago
  Link?
  - kingsuper20 5y ago
    for returns unboxing? first one on a youtube search. https://www.youtube.com/watch?v=7fDMcWYg2wU https://www.youtube.com/watch?v=7fDMcWYg2wU surveillance economy? www.google.com

LeifCarrotson 5y ago

The report would be a lot more useful if there were some context for this data. How many items do comparable places like Wal Mart warehouses destroy each week? What's the reason for these items being marked for destruction? What percentage of the products are these; how many items go through the warehouse per week that are not destroyed? 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.

jschwartzi 5y ago
No Amazon definitely destroys most returns. I was informed that anything you can take to a Kohl’s is destroyed after return. That’s why sometimes it’s not available as an option.
- 5y ago

londons_explore 5y ago

This is what people should really be angry about, not the 'peeing in bottles' working conditions. 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.

deleted 5y ago
[deleted]

NKosmatos 5y ago

Ok, I can understand that this is how capitalism and consumerism work, it's a lot cheaper just to trash the item and manufacture a new one instead of to check returns, but why don't they donate them to schools, communities, churches (or even better gift them to low paying amazon warehouse workers)??? Out of ~130k items per week they only donated ~30k items.

jschwartzi 5y ago
A lot of what gets returned is plastic garbage that doesn’t even do what it says it does

soheil 5y ago

I'm not sure if this is missed or brushed aside on purpose in the article. There is a crucial difference between destroying something and burning it to the ground vs removing something from circulation in a product chain and reusing any raw materials left by third party services. 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.

crazygringo 5y ago

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.

londons_explore 5y ago
> 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 5y ago
  > 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.

TazeTSchnitzel 5y ago

Is the motivation similar to shoe retailers that intentionally slash unsold stock apart with knives — they don't want to discount too much?

josefresco 5y ago

I used to sell physical products on Amazon. They told me once some of my products were damaged “in shipment” and unsellable. I had to pay to return them to me, or they could just trash them.

3minus1 5y ago

I wonder if clothing returns often get destroyed. I know a lot of people will bulk order like 10 bathing suits with the intention of only keeping one or two.

fallinghawks 5y ago

Trashing returns of perfectly good products is unfortunately nothing new. I had a friend who worked at a transfer station in the early 2000s that got sent returns from PetSmart. The return reason was written on a label. Some stuff was defective of course, but others, it was some trivial reason like the customer didn't like the color. The item was in otherwise perfect condition and going to the landfill. I name PetSmart only because my friend was on the lookout for pet stuff; it would be no surprise if other retailers had the same policy.

TylerE 5y ago
What about infection? There many transmissible diseases amongst animal species.
- fallinghawks 5y ago
  Some items were new in box and sealed. It's the same situation as Amazon, except Amazon is at a vastly larger scale. The manufacturer isn't going to repair it and doesn't want it back.
  - TylerE 5y ago
    How do you really verify that though? Many types of seal are pretty easy to fake, or at least replace with something that will LOOK factory to someone that doesn't see the same packaging repeatedly.
    - fallinghawks 5y ago
      Hol'up, why would Petsmart fake seal items that are going to the dump?
slownews45 5y ago
One issue is the liability risk. Especially food type products, retailers are really worried about putting something back on the shelf that has been out of their control. 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.

LatteLazy 5y ago

Another day, another "Amazon did a thing" story...

2OEH8eoCRo0 5y ago

It's okay guys, I don't use plastic straws so I've saved the planet.