Last week, Amazon.com announced the conclusion of its fulfillment services agreement with drugstore.com, which had been providing fulfillment for a small portion of merchandise in Amazon.com’s Health & Personal Care store.

This decision was mutually agreed upon by both parties and takes effect November 9. Amazon maintains its approximately 14% investment in drugstore.com as well as its seat on drugstore’s board of directors.

“We’ve now built direct relationships with most major brands, including Procter & Gamble, Johnson & Johnson, Unilever, Bayer, Glaxo and dozens of others,” said Doug Herrington, Amazon’s vice president for consumables. “Going direct allows us to source more products at better prices, enabling us to deliver more value to customers.”

Amazon.com launched its Health & Personal Care store in December 2003, and currently offers more than 400,000 unique items that are fulfilled by Amazon.com and over 1,000 HPC merchant partners. Drugstore.com accounted for less than 1% of Amazon’s HPC selection.

Over the past twelve months, more than one million customers have made a purchase from Amazon’s Health & Personal Care store. Thus far in 2005, Amazon’s Health & Personal Care store has sold more than 16 million diapers, 2 million ounces of baby formula, and 860,000 nutrition bars.

All items from Amazon’s Health & Personal Care store that are fulfilled by Amazon.com qualify for Free Super Saver Shipping and Amazon Prime, the company’s membership program that offers unlimited, two day shipping for free for $79 per year.