Amazon Mulls Opening Stores To Move Unsold Electronics Inventory At Steep Discounts
Amazon has grown leaps and bounds since Jeff Bezos ran the operation out of his garage in Bellevue, Washington. Moving beyond just book sales, Amazon is a massive outfit that dominates the e-commerce space, and one of the challenges is finding room for all of its inventory. One possible solution is to sell overstocked items in brick and mortar stores at reduced prices.
While nothing has been decided, Amazon moving into physical retail spaces for this kind of thing would not be a stretch. The company already operates over 100 physical locations, including stores and over half a dozen pop-ups in malls. And of course it bought Whole Foods Market for $13.7 billion in 2017, which itself has a footprint of more than 500 physical locations.
This is a bit of a different concept, though. Citing people familiar with Amazon's plans, Bloomberg says the retailer got the idea of selling surplus inventory at steep discounts after holding an employees-only sales event at a warehouse near its Seattle headquarters. Amazon was trying to clear space at one of its facilities.
"It’s a way to be able to clean out warehouses, and get through inventory without having to destroy it," stated a source who claims to have been briefed on Amazon's plans. "It is keeping with the value proposition of Amazon, keeping price at the forefront and allowing customers to get access to products at low cost."
The most likely scenario is that these discount outlets would stock things like various electronics, home goods, toys, and various products that would not take up a whole lot of floor space at these stores. It's said there might not be much clothing, because stocking various sizes would require a larger footprint.
It's not clear how many stores Amazon is mulling, and where they would be located. Amazon operates a whole bunch of fulfillment centers across the United States, and it seems logical to us that any discount outlets that materialize would be in close proximity. That would make it easy to shuffle overstocked items to a storefront without absorbing unnecessary shipping costs.