Amazon Plans To Buy Diapers.com for $540 million

Amazon Plans To Buy Diapers.com for $540 million

This Monday Amazon.com will announce its $540 million acquisition of Quidsi, the parent company of Diapers.com, Soap.com and BeautyBar.com as reported by Fortune.

Quidsi’s founders Marc Lore and Vinnie Bharara launched the site in January 2005. The $540 million price tag is $200 million over Quidsi’s most recent valuation.

Last year we saw Jeff Bezos buy Zappos.com for just under $900 million. Quidsi is yet another huge warehouse company with a well-oiled algorithmic process of shipping to its dedicated customer base.

In an interview with Inc. last year, Quidsi’s Marc Lore describes this process, which explains why Quidsi makes a valuable addition to Bezos’ growing e-commerce powerhouse.

“We use computational algorithms to determine what the optimal number of boxes to have in the warehouse is and what the sizes of those boxes should be. Should we stock five different kinds of boxes to ship product in? Twenty kinds? Fifty kinds? And what size should those boxes be? Right now, it’s 23 box sizes, given what we sell, in order to minimize the cost of dunnage (those little plastic air-filled bags or peanuts), the cost of corrugated boxes, and the cost of shipping. We rerun the simulation every quarter. Using the right box probably adds close to 1 margin point.”

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