Amazon reportedly explored opening discount stores to offload unsold electronics

From Yahoo Finance:

Amazon has been examining the idea of opening discount stores or outlets selling unsold electronics and home goods at steep discounts, Bloomberg has reported. The products would reportedly be sourced from inventory in its warehouses, and the company has weighed opening permanent locations and pop-up stores in malls and parking lots. The stock would consist of smaller items that don’t take up a lot of space, like home goods, toys, kitchen items and electronics, but not clothing.

A 2019 report detailed how Amazon destroys millions of items it can’t sell, ranging from TVs to diapers — though Amazon later pledged to donate unsold goods. “It’s a way to be able to clean out warehouses and get through inventory without having to destroy it,” one of Bloomberg’s sources said.

Link to the rest at Yahoo Finance

PG says there are plenty of large empty retail spaces around the US which would be available for this sort of operation.

OTOH, Amazon receives so much attention from its critics for its warehouse working conditions (despite $15 per hour wages (more than double the US minimum wage) plus a set of employee benefits much broader than most hourly workers receive that it might think discount stores (which often pay low wages) would attract more negative attention.

9 thoughts on “Amazon reportedly explored opening discount stores to offload unsold electronics”

  1. Why doesn’t Amazon just drop the online prices of unsold electronics to the floor and put them in a special section?

    ‘despite $15 per hour wages (more than double the US minimum wage”

    Such largesse was only instituted by Amazon after being publicly shamed by Senator Bernie Sanders.

    • At a time they were paying $11 an hour. So they went from 50% over to 100% over.
      Meanwhile Walmart, Target, and, ahem, bookstores, all ran lower. Without the employee perks.
      The whining was because of Amazon’s success, not them being chintzy.

      There’s always more to the story than the masses hear. Every story.
      Life is complicated. Politicians aren’t.

    • I’m not sure that’s the case, P. As I recall, for at least a long time, maybe forever, Amazon has paid good wages compared to other warehouse operators.

      I just checked ZipRecruiter for average warehouse worker pay broken out by state.

      Washington (which includes a bunch of Amazon warehouse workers) is the highest at an average of $14.84 per hour.

      The 10th highest warehouse pay is in Massachusetts with $13.11 per hour.

      #20 is Texas with $12.10 per hour.

      #30 is Wisconsin at $11.64 per hour.

      #40 is Kansas at $11.29 per hour.

      #50 is North Carolina at $9.66 per hour. (North Carolina has no Amazon warehouses.)

      If anyone knows any source that breaks out what non-Amazon warehouse workers make in the various states, I’d be interested in seeing that info.

      Here’s the link to warehouse salaries by state: https://www.ziprecruiter.com/Salaries/What-Is-the-Average-Warehouse-Worker-Salary-by-State

      Here’s a link to a list of Amazon warehouse locations, broken out by state – https://forestshipping.com/amazon-fulfillment-usa

      Kentucky, a state which currently has the fourth-highest poverty rate of the 50 states, has the highest number of Amazon Warehouse locations. Kentucky also has the sixth lowest median household income. (I’m not aware of any online info that lists Amazon warehouses by the number of employees in each warehouse).

      PG did a little quick and dirty calculation and determined that, if two household members were working at an Amazon warehouse at the starting salary of $15 per hour (that salary goes up the longer you’re working at the warehouse) the household income would be a little lower than the 50% percentile of households (including both high-income and low-income states). And that’s without any overtime pay which Amazon pays a lot of during busy seasons.

      That’s for a job that requires the employee be 18 years or older, have the ability to read and speak English for safety and Have a high school, GED, or equivalent diploma. No prior work experience is necessary.

      What other jobs can a HS grad pick up that pay that much? And which include a full benefits package, beginning on Day 1, including health insurance, parental leave, paid holidays, 401(k) plans with 50% company match, and enroll in paid life and accident insurance. Financial counseling and estate planning services are also available, plus paid short-term and long-term disability coverage. Amazon also provides 20 weeks of leave to birth mothers and six weeks for parents who adopt. The company also offers childcare and eldercare benefits.

      Hourly workers are entitled to an educational benefit that pre-pays 95% of the cost of tuition, textbooks, and related fees for approved programs. Amazon won’t pay for you to attend Princeton, but gives medical technicians, paralegals, robotics engineers and solar panel installation professionals as examples of training programs that qualify for 95% prepayment of costs. You’ll note that most of the listed programs will involve the employee leaving the Amazon warehouse job and going to work somewhere else.

      How does that match up with working at McDonalds or a convenience store or a tire repair shop or similar jobs open to high school graduates?

      • Or bookstores?
        Warehouses are entry level work. People are supposed to move past those jobs after a while; that’s what education benefits are for. That’s what the quitting bonuses are for.
        They are not supposed to be Industrial age lifetime jobs ala UAW.

        Like most of the gerontocracy in power, Sanders is re-fighting last century battles, a rear guard fight against the future. Whether it be warehouse salaries, worker unionization looking to raise Amazon costs, delivery driver schedules, or some other retro-cause, it’s all moot. Because robo-trucks and Dark Warehouses are coming.

        For the warehouses, the name to know is STRETCH:

        https://www.wired.com/story/boston-dynamics-new-robot-has-a-warehouse-job/

        As the linked piece shows:
        —-
        IT CAN’T DO back flips like Atlas the humanoid robot, nor can it dance or open doors for its friends, like Spot the robotic dog can. Instead, Boston Dynamics’ new robot, named Stretch, is going straight to work in a warehouse. Rolling around on a wheeled base, it’s basically a large robotic arm that grabs boxes using vacuum power, and it’s designed for tasks like unloading trucks or stacking pallets.

        If Spot and Atlas are the show-offs in the family, Stretch is the straight-up workhorse. But while these machines all look and move in wildly different ways, they actually share a lot of DNA.
        —–

        More and a cool video at the source.
        (Also Youtube. BOSTON DYNAMICS STRETCH.)

        Think of STRETCH as a self driving forklift for starters.
        Pallet unpacker.
        Empty pallet remover.
        All the other sweaty, backbreaking work.
        And it doesn’t need potty breaks, health care, education benefits, paternal leave…
        (Oh, and there are already robot rental/lease companies out there that buy robots and rent them out to farms and small business. It won’t be just the big boys running dark warehouses.)

        Those warehouse folks had better use those education benefits fast.
        Because the world moves fast.
        One might say it moves on “Internet Time”. Or as they said ages ago; “When it’s time to railroad the rails will roll out.” While some fight over boosting the number of undereducated laborers to exploit, the smart folks buy robots.
        Welcome to the 21st century.

      • PG, what other companies are paying their employees is irrelevant. ADS screeds are always the highest priority, ignoring reality.

  2. Like Woot?
    Or Amazon renewed?
    https://www.amazon.com/Certified-Refurbished/b?node=12653393011

    I think the idea now is for B&M to supplement the online.
    Amazon has been doing pickup at some of their warehouses/distribution centers for new merchandise for some time. This sounds like a way to clear out “stale” inventory.
    Sort of like BIGLOTS, where people see the grab bag of stuff before buying.

    The bigger problem is likely to be branding more than activists. Associating the Amazon brand with lower grade product. Because people aren’t good with distinctions. They may be better off dumping the stuff on places like BIG LOTS that specialize in remnant merchandise.

  3. They would prefer visitors bought normally priced goods. Putting them in a liquidation outlet achieves the same end without diluting the normal flow of purchases. That’s what lots of companies do.

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