Earlier today TechCrunch reported that Amazon is selling a book titled The Pedophile’s Guide to Love and Pleasure, and later in the day Amazon defended its sale. More sickening, people are actually buying it – it’s broken the top 100.
As this disgusting saga plays out, something really interesting is going on behind the scenes. Guess who Amazon just acquired last week for $545 million? Diapers.com. Guess who Diapers.com sells products to? Yep – Moms and Dads with little kids.
Take a look at this FaceBook thread with an official response from Diapers.com. Moms are in outrage. And Diapers.com wants no connection.
“Hi Everyone. While our parent company has been purchased by Amazon.com we have NO control over what is sold on their site. If there are any complaints or concerns please send them to Amazon.com”
It’s evident that the timing on this acquisition could hurt both companies. But the linkage to selling such an awful book could be even worse for Amazon for a more subtle reason.
It’s extremely likely that there is a high overlap in the customer base between Diapers.com and Amazon, since both are dominant e-tailers. Diapers.com customers are not only less likely to buy diapers from either Amazon or Diapers.com (to boycott the pending acquisition), but they are also less likely to buy ANYTHING from Amazon. And there’s no doubt they shop online at both places.
It’s also ironic timing, because I can guarantee that if Diapers.com were still independent, they’d be ALL OVER this story to pound Amazon in to a pulp by saying something damning publicly. Remember, prior to last week’s acquisition, the two companies were in all-out pricing war.
Here’s the financial background on why this could be material for Amazon. Companies – ranging from Starbucks to Amazon – relentlessly track “customer lifetime value” or CLV, which depends on the cost to acquire a customer, and the retention rate (or churn) of that customer over her lifetime. The biggest determinant in maximizing CLV is – by far – retention. When you lose her, CLV falls off a cliff.
This kind of stuff is a big deal in the brand sphere as well. In 2010 Interbrand declared Amazon the 36th most respected brand, with only Apple and Google notching a larger year-on-year increase than Amazon of the top 50.
When the news of this pedophile saga goes mainstream it could be the type of thing that permanently tinges Amazon’s image. Right now, a search for “pedophile amazon” on Google news is returning more and more hits to mainstream news sites like LA Times. And pretty soon people will discover some of the other totally insane books that Amazon sells.
So, addition to it being disgusting that Amazon is defending its actions, as Mike writes, it may be a pretty bad financial decision too. Personally, I am considering cancelling my Amazon Prime account and shopping elsewhere. What do all the Moms out there think?