Amazon burned up to $200M a month on diapers to crush Quidsi, then shut it

In 2009, Amazon executive Doug Herrington flagged Diapers.com's parent Quidsi as 'our biggest competitor in the diaper space' with 'lower fulfillment costs than we have' — 'we need to match pricing on these guys no matter the cost.' Amazon, which entered diapers a year after Quidsi and saw the category as too bulky and low-margin to deliver profitably, slashed prices by up to 30 percent. When Quidsi hit $300 million in revenue and announced soap.com in June 2010, Bezos asked for a battle plan; Herrington described an aggressive 'plan to win' centered on the Amazon Mom subscription discount.

Amazon announced Amazon Mom on September 14, 2010 — free Prime plus an extra 30 percent off diapers on subscribe-and-save — while Quidsi's founders were flying to Seattle to discuss a possible acquisition. Quidsi executives calculated Amazon was on track to lose $100 million over three months in diapers alone; at the July 2020 House Judiciary hearing, Rep. Mary Gay Scanlon said committee documents showed $200 million lost in a single month. Starved of capital as growth slowed, Quidsi signed a merger agreement that November.

After the acquisition, Amazon closed Amazon Mom to new members within a month, then reopened it with smaller discounts under unexpectedly close FTC scrutiny — effectively raising diaper prices once the rival was bought. In 2017 Amazon shut Diapers.com. At the hearing, Bezos said he didn't remember the specifics: 'I don't remember that at all... We match competitive prices.'

The emails contradict Amazon's later account: Herrington listed the Amazon Mom rollout inside the 'plan to win' against diapers.com, and noted it 'will slow the adoption of soap.com.'

The discounting had no economic defense — it only made sense as a growth-killer, which is why Quidsi's investors stopped funding the fight.

Buying the wounded rival and then gutting its program handed critics a complete predatory-pricing narrative, replayed point by point at the July 2020 hearing.

Predatory pricing works — and leaves a paper trail: the same emails that won the price war later became exhibits in Congress.

The FTC approved the deal; Amazon initially ran Diapers.com as a separate service before shutting it in 2017. The published emails became a centerpiece of antitrust scrutiny when the House Judiciary Committee questioned Bezos on July 29, 2020.