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Why paying $545 million for diapers was a good idea

Paying $545 million for diapers might sounds like a lot of money, but when it for the company Quidsi owner’s of diappers.com you may see it as a good one. In November 2010 Amazon paid this much to buy full ownership of the company. The reason is simple Quidsi is doing something right. The company specializes in selling small items and sending them overnight to customers. This mix has been a nightmare for most e-tailers who find it a logistics nightmare. The problem has always been that shipping individual small orders means a lot of manual labor which eats away any profit margins. Quidsi solved this problem by using sophisticated robots to sort orders. This removes the majority of the manual labor and allows for fast sorting and processing of orders. Also they developed methods to reduce packaging which also reduces the cost of shipping. The other innovatio was the method by which they work with shipping companies. They avoided aligning themselves to just one and focused on working with many which allows them to find the most affordable and fastest option. All of these developments make them a very attractive purchase for Amazon who is always trying to improve its bottom line.

Now didn’t you wish that you you paid $545 million for diapers ­čśë

Watch the Quidsi story…

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