The big picture: Amazon currently operates dozens of retail stores under the Amazon Books, Amazon 4-Star, Amazon Fresh and Amazon Go banners, not to mention its Whole Foods markets. Expanding those operations to include a discount chain doesn't seem like it'd be much of a stretch, even if just on a trial basis to test the concept.

Amazon has reportedly flirted with the idea of opening physical retail stores that would carry unsold merchandise at a deep discount. The proposed shops, both permanent and pop-up in nature, could carry a mix of smaller items that don't take up a lot of floor space such as electronics, toys, kitchen items, baby products and home goods.

Sources familiar with the matter told Bloomberg that the idea dates back to last year, but other matters including the pandemic and the company's Fresh grocery chain forced the company to navigate those waters first.

Of the retail idea, one person told the publication it would be a way for Amazon to clean out warehouses and go through inventory without having to destroy items. "It is keeping with the value proposition of Amazon, keeping price at the forefront and allowing customers to get access to products at low cost," the person added.

Amazon in 2019 came under fire after reports surfaced about the company's disposal of millions of products it was unable to sell, prompting the company to launch a donations program a few months later.

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