While boosting the bottom line sounds great, Amazon risks making its Prime membership less valuable in the eyes of consumers. While Prime offers benefits beyond free shipping, it’s not a stretch to say that free shipping is the main draw. And I would be willing to bet that many Prime members highly value the ability to order heavy, bulky items and have them delivered quickly for free, saving a trip to a big-box store.
Eliminating CRaP items or raising prices to make them profitable could backfire if those changes impact the routine orders Prime members are placing. Prime members that were already on the fence about the membership after the annual fee was raised to $119 may not stick around if the changes are too extreme.
Products that Amazon considers CRaP aren’t necessarily CRaP for other retailers, so Amazon’s shift away from those types of items could be a boon for some of its competitors. Big-box chain Target (NYSE:TGT) may be the biggest beneficiary, because its online business is almost tailor-made for Amazon’s CRaP.
Read More.. Source The Motley Fool