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Report: Amazon blocking ads for unprofitable products to boost profits


Report: Amazon blocking ads for unprofitable products to boost profits

Amazon.com Inc. has been "aggressively" blocking unprofitable products from advertising on its online marketplace as the e-commerce giant works to reach record profits, CNBC reported March 20, citing emails sent to vendors.

The company has, for months, been notifying merchants or brand owners who sell their goods wholesale that they will not be able to promote their items if those products fail to rake in sales, the report said.

CNBC said Amazon is targeting ads run by vendors, not those by third-party sellers, who account for more than half of products sold on Amazon.

The company is asking brands to "lower the product's cost" in order to become eligible for advertising again, the report said.

The reported move comes as the company targets an 18% growth in sales in the first quarter of 2019.

An Amazon spokesperson told CNBC that the retailer is doing what retailers have done for decades.

"Like all retailers, Amazon decides which products to market and promote in our stores based on a variety of factors, such as relevancy, availability, profitability and other factors," the spokesperson reportedly said.

The Wall Street Journal reported in December 2018 that the company has been eliminating unprofitable items, known internally as "Can't Realize a Profit," or CRaP, for months in a bid to boost profits.