Amazon’s price war with Walmart and other large retailers has led the e-commerce giant to raise transportation fees for companies supplying beverages, diapers and other heavy products that are expensive to ship, according to Bloomberg.
While Amazon is well-known for its quick and convenient delivery, its fulfillment expenses rose 43% in 2017 to $25 billion, swallowing the company’s 31% growth in revenue.
The online retailer is also limiting the number of single, low-price items customers can purchase to keep shipping costs low. These items can include toothbrushes, soap, lipstick and other inexpensive items. Many of these items do not result in a profit for Amazon when bought alone.
Amazon already sold select health and personal care items as part of a packaged-deal-only order of at least $25 for several years. This recent move means that list will now encompass more items. The move could lead to fewer sales of less expensive health products, which could in turn hurt suppliers such as Kimberly-Clark, Johnson & Johnson and Procter & Gamble, Bloomberg reports.
The full implications of the move are still unclear, but it does prove that Amazon’s resources are not unlimited. If Amazon customers find it more difficult to buy cheap health items online, c-stores may see those consumers more willing to purchase them in-store.