In the latest chapter of Amazon’s quest to dominate retail, the company is said to be launching a new wholesale service – similar to what Costco and Sams Club offer – in 2014.¹ The new service, ‘Pantry,’ will focus mainly on consumables – canned and other dry foods, pet supplies, paper goods, cleaning supplies and the like. According to the USA Today report:

The service will be targeted at existing members of Amazon’s Prime shipping program. It will launch with about 2,000 products typically found in the center of grocery stores, such as cleaning supplies, kitchen paper rolls, canned goods like pet food, dry grocery items like cereal and some beverages.

Amazon will let Prime shoppers put as many of these items into a set sized box, up to a specific weight limit. If the products fit and they don’t exceed the maximum weight, Amazon will ship the box for a small fee.²

While you can already buy many household items in bulk from Amazon – things like toilet paper – Amazon and other e-commerce retailers have a hard time turning a profit on ‘Fast-moving consumer goods’ or ‘consumer packaged goods’ as they are generally inexpensive yet are expensive to ship.³ For example, the USA Today article points out that, “The cost of a pack of Coke cans, for instance, is about the same as it costs Amazon to ship the item.”⁴

Amazon’s approach to the ‘Fast-moving consumer goods’ cost vs. shipping problem is truly unique. By, “Encouraging consumers to put multiple items into a single box increases revenue from each order, potentially helping Amazon cover the shipping cost,” Amazon seems to have solved the problem.⁵ Amazon has yet to make any statement on the ‘Pantry’ feature.