Amazon explored opening discount stores to clear out unsold products
Amazon Inc. has been exploring an idea of opening physical stores to offload the unsold inventory at heavy discounts, reveals Bloomberg. The information was disclosed by two people familiar with the plan. Amazon has reportedly thought of opening discount stores in parking lots and pop-up locations in malls. The plan was to sell smaller items at discount stores that don't take up much space.
Plans for discount stores are on hold due to pandemic
However, the company has put a hold on its plans to open discount stores, for now, reveal sources. According to them, Amazon's employees are currently occupied with handling increased demand for online orders due to the pandemic, and managing the newly-launched Fresh grocery chains. However, Amazon will most likely resume planning for discount stores once the pandemic situation gets under control.
Amazon would destroy unsold products in the past
A report that came out in 2019 revealed that Amazon destroyed millions of unsold goods to clear its warehouses. The company used to dump the unsold goods in sprawling landfill sites or incinerated them. According to reports, it was cheaper and easier for the company to destroy the unsold products rather than returning them to the brands.
Amazon has pledged to donate the unsold goods
Naturally, the business mammoth was criticized for destroying millions of products. Owing to the backlash, the company quickly announced that it would be donating unsold goods to people in need rather than destroying them. Currently, Amazon distributes unsold goods with the help of non-profit organizations. However, it may decrease the amount of donations once it opens the discount stores.
Discount stores would be a viable option in the future
Opening discount stores would be a perfect way for Amazon to get rid of unsold goods. On one hand, consumers can get products at heavy discounts. On the other hand, Amazon will neither have to destroy the unsold goods nor give them for free. However, not all products can be sold through discount stores. Amazon will still have to donate some of them.
