Amazon to buy Diapers.com for $540 million

When Quidsi launched Soap.com in July, adding an additional 25,000 products to their lineup, the site was strafed almost from the minute it went live by price bots dispatched by Amazon. Quidsi network operators watched in amazement as Amazon pinged their site to find out what they were charging for each of the 25,000 new items they initially offered, and then adjusted its prices accordingly. Bharara and Lore knew that would happen. "If we put something on sale, we usually see Amazon respond in a couple of hours," says Bharara.

Or as Rohan puts it: "A price bot attack truly is the sincerest form of flattery."

At times, they apparently bought out the BJs and Sams Clubs within a 100 mile radius. They were doing it all on credit cards in their own cars and rented U-Hauls.

Here's the article: http://www.bloomberg.com/news/2010-10-07/diapers-com-takes-o...

Since the box to send the diapers is already huge, the incremental cost of shipping these adjacent products is quite low (usually they can just throw them in the diaper box).

It's a good strategy.

http://www.mentortechventures.com/MT-News.blog/2009/09/01/Di...

So apparently, Quidsi (the real name) is at break even*, has raised 80 million in equity since 2006 (plus the founders own injections), and this year will sell 270m while spending 30m on advertising.

At first I thought that they may not have been worth the 500m, but I'm rethinking that now.

Don't make humorous comments; you can't get modded +5 (funny) on here. Instead, you get downvoted.