Behind the scenes, the winding down of Quidsi had been quietly underway for over a year. Unlike shoe seller Zappos, which Amazon acquired in 2009 and has flourished as an established independent brand, Quidsi’s commodity products play right into Amazon’s core business.
In the fourth quarter of 2015, Amazon started redirecting inventory from Quidsi’s three fulfillment centers — in Nevada,
Quidsi’s facilities were running out of capacity. The robots that ran through Quidsi’s fulfillment centers, pulling goods from shelves and efficiently boxing them up, were owned by Amazon through the 2012 acquisition of robot maker Kiva Systems. Amazon was investing in improving the robots but directing those upgrades primarily to its own facilities, not Quidsi’s, sources said.
Furthermore, from a customer perspective, Amazon preferred to keep buyers on its own website rather than on Quidsi’s network of sites like Diapers.com and Soap.com. With its inventory fleeing to Amazon’s warehouses and the Quidsi sites being de-emphasized, there was no longer a strategic reason to have a separate Quidsi operation.
“They didn’t buy service with Quidsi, they bought domain names and customer lists,” said Michael Pachter, an analyst at Wedbush Securities who has a buy rating on Amazon. “It was inevitable that both diapers and soap would be absorbed into Amazon’s overall business, as there is no competitive advantage given up by doing so.”
An Amazon spokesperson declined to comment.
