Amazon pushes brands to be less boxy

The new standard Amazon packaging is more compact.
THE WALL STREET JOURNAL

Amazon is pressuring brands to make their packaging more efficient, which has prompted vendors to make costly changes to their businesses or face fines.

Since last fall, Amazon has told companies they must make packaging for thousands of larger products more compact by Thursday. Eventually, Amazon wants every product it ships to meet similar standards, according to the company and its suppliers. In a letter to vendors, Amazon said the requirements will make packages more environmentally friendly.

The new packaging requirements are the latest example of Amazon’s power to get vendors to change the way they do business. The company has also been pushing brands to sell products in quantities and at prices that best fit its storage and delivery systems; brands that don’t comply are being cut from Amazon. In addition, the e-commerce company is asking makers of consumer products to develop brands for Amazon to sell exclusively rather than creating its own private-label products from scratch.

Consumer-product companies say they have little choice but to meet the requirements. Manufacturers of items from soup to garden rakes say they have to sell through Amazon to reach more customers.

Philips Norelco OneBlade, owned by Koninklijke Philips, said it cut the components in its razor packaging to nine from 13 and reduced the volume of packaging by 80% to meet the new standard. Hill’s Pet Nutrition said it decreased the packaging volume of its Science Diet premium dog food by 34% and the amount of wasted space, or air shipped, by 82%. Newell Brands, the maker of Rubbermaid FreshWorks, said it cut the components used to ship its containers to two from seven.

“Some brands tell us they plan to negotiate with Amazon, but we don’t see that happening,” said Matt Reddington, a director at packaging-testing consulting firm Veritiv. Reddington said while some companies could remove products from the retail giant’s platform, he expects Amazon to keep pushing brands to change packaging in ways best suited to its own evolving strategy.

Amazon has been trying to make packaging more efficient for more than a decade. Its expanding e-commerce is consuming more cardboard and plastic. Now, Amazon is trying to address consumer calls to cut back on waste while reducing excess weight and volume to generate savings on shipping as well.

(Source:gazette)