How Amazon Goes Small to Make It in New York

Vertical operations and more robots signal the future of e-commerce fulfillment as companies look to get closer to more customers

Amazon Inc. has opened New York City's first distribution center and it is almost the size of 15 football fields. This distribution center can ship out more than 1 million items a day if its a busy period. 

Amazon built this facility because, "It is 20% smaller than Amazon’s usual fulfillment centers, stuffed with twice as many robots as human workers and able to handle 50% more inventory than traditional warehouses." (Smith). Amazon is trying to deliver goods/products to consumers as fast as possible since this new distribution center is much smaller. With more robots and twice as more inventory, items will arrive at consumers' homes faster. Amazon Inc. believes that moving into these type of facilities will increase their profits and will make their distribution centers more efficient.

Not only are these type of facilities more efficient, but it also makes the lease cheaper. The source tells us, "Leasing activity for big-box industrial spaces over 1 million square feet fell 26.1% last year, according to commercial real-estate services firm Jones Lang LaSalle Inc., while leases in the 100,000 to 500,000-square-foot range slipped by only 3.6% from the year before."

Amazon saw a big decrease in their lease when they built the distribution center in New York City. Because of this, Amazon wants to keep making their distribution centers small. 

This article relates to marketing because having smaller distribution centers will allow consumers to receive their goods faster and will make them happy. These small facility centers will distribute products to the people faster and will allow Amazon to keep their reputation of good customer service. 

I choose this article because I am a consumer of Amazon products and reading that they can make their distributions smaller and ship out their products faster surprises me. I would imagine a company like Amazon to buy/build large distribution centers so they can be more efficient but I found out that they can be twice as efficient with smaller facilities. 


Source: Jennifer Smith, April 8 2019
https://www.wsj.com/articles/how-amazon-goes-small-to-make-it-in-new-york-11554112800