Diapers.com / Quidsi

» see diapers.com as it lived, on the wayback machine

~ the goodbye ~

diapers.com launched in 2005 out of montclair, new jersey. marc lore and vinit bharara had noticed that amazon did not yet stock diapers and that new parents desperately needed someone to ship pampers to their door. the math on heavy bulky low-margin goods worked if you built the warehouse logistics around them specifically. the parent company quidsi expanded into a network of category sites (soap.com, wag.com for pets, beautybar.com, yoyo.com for toys, casa.com for home goods). by 2010 they were shipping over $300 million a year and growing fast.

amazon noticed. according to brad stone's reporting in "the everything store," amazon's response was a deliberate price war. they cut diaper prices to break-even or below and held them there long enough to drag down quidsi's revenue trajectory and force the founders to the negotiating table. on november 8, 2010 amazon announced the acquisition of quidsi for $545 million. lore and bharara stayed on for a couple of years and then left. the diapers.com brand kept operating as a quidsi subsidiary inside amazon for the next seven years.

on march 29, 2017 amazon announced quidsi would be shut down on april 19, citing lack of profitability. over 260 people were laid off. the explanation stunned employees because at an internal all-hands months earlier executives had told them that quidsi would be profitable in 2017 with significant free cash flow. the official line and the recent internal line did not match, and reporters at recode and cnbc spent the next week trying to reconcile them.

i was nowhere near this. diapers.com was a us-only e-commerce play in a category (parents of newborns) that i was not in either, and the whole arc happened inside a us-domestic logistics layer (fedex / ups same-day economics) that does not really map onto turkish e-commerce. i read the 2017 shutdown coverage mostly as the second act of the marc lore story. the first act was the price war. by then his $3.3 billion sale of jet.com to walmart was already a year in the rearview.

~ the chronicle ~

~ the price war ~

the standard anti-amazon argument from the diapers.com era goes like this. amazon priced diapers below cost on amazon mom, sustained those losses for as long as it took to slow quidsi's growth, then bought the company at a discount once the air came out of the multiple. lina khan's 2017 yale law journal note "amazon's antitrust paradox" used this exact transaction as the central case for why predatory pricing should still be a useful antitrust concept in the platform era. the fcc cleared the merger anyway. the antitrust framework at the time did not have a way to count "consumer harm" in a deal where consumers in the short run got cheaper diapers.

~ what got buried with it ~

quidsi's warehouse-software stack and the operational know-how marc lore built up around heavy-bulky-low-margin shipping was the actual asset amazon paid $545 million for. that knowledge got absorbed into amazon's own logistics network. the consumer-facing brands (diapers, soap, wag, beautybar) were redundant from amazon's perspective the moment the integration was finished. lore left amazon in 2013 to start jet.com on the same fulfillment-economics thesis. he sold jet to walmart for $3.3 billion in 2016 and has been running and rebuilding adjacent businesses since. quidsi was always going to be transitional inside amazon. the surprise was how slowly amazon admitted it.

~ the actual end ~

april 19, 2017. all six quidsi sites stopped accepting orders. the apps were pulled from the app store within two weeks. customers were redirected to amazon for the equivalent products. there was no spin-off, no buyer search, no try-to-save-the-brand campaign. amazon owned it, amazon decided it was not worth keeping, amazon turned it off. the people building it took severance and went elsewhere. marc lore mostly went on to wonder, his next thing.

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