It is said to be in the works that Amazon.com is going to buy Quidsi Inc., the owner of Diapers.com and Soap.com, for $540 million. The deal may be made as early as today.Quidsi, which expects to ship 500 million diapers this year, will help Amazon cater to new parents and gain expertise in warehouse management and low-cost shipping.
It seems to me that when Amazon.com isn't the best online retailer in that particular sector, they will step in and buy the company. “It’s a business Amazon was in, but one they weren’t a leader in,” said Colin Gillis, an analyst at BGC Partners LP in New York. When they see a specialty company dominating a category, “they’ll step in and buy it.” It seems like a good plan to me if you can accomplish it. You eliminate competition while simultaneously growing your business. Amazon Chief Executive Officer Jeff Bezos, 46, bought Zappos.com Inc. last year for $1.2 billion to expand sales of shoes and clothing and gain share against other e-commerce providers such as EBay Inc.
It has also been reported that Quidsi also received a purchase offer from Wal-Mart Stores Inc., according to Fortune, which reported the Amazon deal on Nov. 6. Personally, I hope Amazon beats Wal-Mart out on the purchase. I don't think that Wal-Mart needs to get any bigger than it already is.
Very interesting post Ashley!
ReplyDeleteI have also been keeping track of Amazons progress and expansion over the past few years. Although it is easy to say that Amazon is simply buying up the competetition, I believe that there is much more to their growth strategy.
Amazon excutives are very careful in their practices, and they spend millions on researching their business ventures. It is true that they are expanding quickly and there are literally dozens of companies that have been bought by Amazon. But, it is not by chance that Amazon continues to increase profits and remains an industry leader. They are one of the best companies in todays market at identifying the competition, and acting on it accordingly.
Good insight!