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December 13, 2013

What's Amazon Cooking Up Now? Pantry

In case you had any doubts about Amazon being intent on world-domination, here's some more news from the company who recently spurred a controversy with its announcement that it plans to make deliveries by drones. The Seattle, Wash-headquartered mega-firm has a new business in the works aimed to help it break into the consumer package goods market, specifically the segment that may be thought of as the "stuff that gets shipped in big boxes" segment. Pantry will distribute some 2,000 products. Taking a competitive jab at club warehouses like Costco and Sam's Club, it will retail cleaning supplies, canned goods, dry grocery items, among other items that are often sold in bulk or budget prices.

USAToday wrote up an exclusive story about the business plans in development, which are being spearheaded by Billy Hegeman, a senior manager in vendor management and consumables at the commerce company that sports a net worth of about $90 billion. Pantry is hardly a far-off prospect. The initiative is slated for release sometime in the new year. Amazon spokesman Scott Stanzel declined to comment to USAToday, and the company insiders that did speak out did so under the condition that their names were not revealed.

Pantry will cater to Amazon Prime shoppers, who can load up their boxes up to a certain weight. If the boxes go past the weight limit, Amazon will tack on a "small fee," much like the club warehouses do. But can Amazon succeed in beating operations like Costco at the game they not only master, but pretty much invented? The firm will really have to up the discount ante to get people to switch over.

While these club warehouses could be quite threatened by the new service, stealing business isn't Amazon's sole agenda with the new offering. The company is also looking to tap into a lucrative market. The consumer package goods market is worth roughly $850 billion a year in the U.S. alone.

Edited by Cassandra Tucker

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