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Amazon Now Wants to Sell You Less Stuff

By Rich Smith – Apr 16, 2020 at 3:54PM

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Will sales grow at all in Q1? Does Amazon even want them to?

For the longest time, sales growth has been integral to Amazon.com's (AMZN -1.57%) business. Annual sales growth in North America in 2015 and 2016 was 25%, according to data from S&P Global Market Intelligence; it was 33% in 2017 and 2018.

Last year, sales growth slowed to 21%; now, it looks like Amazon wants to go into reverse.

5 icons all reading buy now

Amazon shoppers could soon see fewer encouragements to "buy now." Image source: Getty Images.

By now it's common knowledge that Amazon's supply chain has been struggling to cope with the stress of COVID-19. Last month, the company announced delays in shipments of "nonessential" merchandise to ensure it has the manpower to keep shipments of essential food, medical, and cleaning supplies flowing. This week, the company appeared to relent on that policy, as new workers brought online were expected to permit it to lift restrictions on third parties selling nonessential goods through Amazon's marketplace.

And yet, the company doesn't want shoppers to get carried away. As CEO Jeff Bezos explained in a letter to shareholders today, "Amazonians are working around the clock to get necessary supplies delivered directly to the doorsteps of people who need them" (emphasis added). And that may require deemphasizing sales of nonessentials.

To that end, as The Wall Street Journal reports, Amazon has been quietly "retooling" its website to reduce pressure on consumers to shop more, removing e-widgets, for example, that suggest additional purchases "shoppers like you" made on its site.  

The company may also postpone its annual July "Prime Day" shopping extravaganza, and even cancel marketing pushes promoting Mother's Day and Father's Day shopping.

Suffice it to say, these are a lot of incremental sales that Amazon seems intent on forgoing. Investors looking for a return to accelerating sales growth at the e-tailer, when it reports quarterly earnings next week, may be in for a disappointment.  

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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