In the latest of a long line of astounding announcements, Amazon has unveiled its latest intent: to begin chipping away at the market shares of bulk stores like Sam’s Club and Costco by targeting consumers of bulk items known as “center isle items.” This includes items such as toilet paper, paper towels, and dog food, which consumers often buy in bulk. Through the new initiative, called Amazon Pantry, Amazon Prime customers would be charged a small fee for as many items as could fit in a standard sized box under a specific weight, which is yet to be determined. As of yet, it is unclear whether Amazon would use the USPS, UPS, FedEx, or its own delivery trucks to deliver the items.
Currently, Costco Wholesale sells $105 billion in merchandise annually, with Sam’s Club coming in at second among bulk wholesalers at $56 billion. Together, the two bring in $160 billion in revenue. If Amazon can take over just a portion of these sales, their current $80 billion revenue could skyrocket considerably.
The Amazon Pantry is a separate project from the Amazon Fresh grocery order and delivery service, which is already in full swing in some parts of the country. It is also different from other Amazon projects in that it offers bulk buying in addition to the concept of the standard box.
Currently, the cost of joining Amazon’s Prime service is $79 per year, and includes free 2-day shipping all year long. Amazon founder and CEO Jeff Bezos has been clear that he intends to turn the company into a one stop shop for all consumer goods. He is the twelfth richest person in the United States, with an estimated worth of $25 billion. Amazon recently purchased Soap.com and Diapers.com as part of this “buy everything at Amazon” initiative.