Less than seven years after spending $545 million to acquire Quidsi — home to Diapers.com and Soap.com — Amazon announced Wednesday that it was shutting down the unit because the tech giant can’t get it to make money.
“We have worked extremely hard for the past seven years to get Quidsi to be profitable, and unfortunately we have not been able to do so,” an Amazon spokesperson told GeekWire. “Quidsi has great brand expertise and they will continue to offer selection on Amazon.com; the software development team will focus on building technology for AmazonFresh.”
Marc Lore and Vinit Bharara started Diapers.com in New Jersey in 2005 as a “mom-centric retail technology company.”
A deeper dive on the battle over moms and diapers can be found in Brad Stone’s 2013 book about Amazon, “The Everything Store.” Slate.com summed up Business Week’s excerpt of the book to tell that story, and how, according to Stone, CEO Jeff Bezos didn’t like the competition from Diapers.com.
The story details the price battle between Amazon and Quidsi and how it eventually ate into the growth of Diapers.com. The Quidsi founders were forced to consider selling and began talks with Walmart. Bezos reportedly threatened to eat massive losses and drive diaper prices to zero in order to win. On Nov. 8, 2010, the company was sold to the Seattle-based retail giant.
“I’m not sure which is more unpleasant — changing diapers, paying too much for them, or running out of them,” Bezos is quoted as saying in 2010 following the news of the Quidsi acquisition. “This [acquisition] brings together two companies who are committed to providing great prices and fast delivery to parents, making one of the chores of being a parent a little easier and less expensive.”
Lore went on to start Jet.com as an e-commerce startup bent on taking its shots against Amazon. In August 2016, he sold to Walmart for $3.3 billion to unite the companies in that effort. Lore remains at Walmart, where he oversees the company’s e-commerce division.
In a year-end earnings report in February, Walmart started to see the payoff of its acquisition, as online sales increased 29 percent in the U.S. and 15.5 percent globally.