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Wednesday, Aug 21
Amazon kicks warehouse-building efforts into high gear
- Bloomberg observes Amazon (AMZN -0.6%) has spent nearly $13.9B to build 50 new fulfillment centers since 2010, and that the e-commerce giant had 89 of them worldwide at the end of 2012 (5 more have been announced this year).
- Amazon's efforts to lower delivery times, both for its own goods and those of its merchant partners, have much to do with this spending binge. Consulting firm MWPVL thinks Amazon could offer same-say delivery to 50% of Americans (up from a current 15%) by placing fulfillment centers closer to the top-20 metro areas.
- FastCompany recently took note of AmazonFresh's role in the company's same-day efforts.
- Accompanying the warehouse-building are behind-the-scenes attempts to improve efficiency, such as adding machinery and floor levels. "We now get about twice as much product in this building as we would have four or five years ago," says an Amazon exec about a TN facility.
- Amazon's fulfillment expenses rose 35% Y/Y in Q2 to $1.84B, outpacing rev. growth of 22% and amounting to 12% of revenue.