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Amazon Plans To Put 1,000 Warehouses In Suburban Neighborhoods (bloomberg.com) 70

Posted by BeauHD from the fulfilling-a-pre-pandemic-pledge dept.
An anonymous reader quotes a report from Bloomberg: Amazon plans to open 1,000 small delivery hubs in cities and suburbs all over the U.S., according to people familiar with the plans. The facilities, which will eventually number about 1,500, will bring products closer to customers, making shopping online about as fast as a quick run to the store. It will also help the world's largest e-commerce company take on a resurgent Walmart. Amazon couldn't fulfill its two-day delivery pledge earlier this year when shoppers in Covid-19 lockdown flooded the company with more orders than it could handle. While delivery times have improved thanks to the hiring of 175,000 new workers, Amazon is now consumed with honoring a pre-pandemic pledge to get many products to Prime subscribers on the same day. So with the holidays approaching, Chief Executive Officer Jeff Bezos is doubling down by investing billions in proximity, putting warehouses and swarms of blue vans in neighborhoods long populated with car dealerships, fast-food joints, shopping malls and big-box stores. Amazon didn't comment on the expansion plans, but has said its last-mile delivery efforts are meant to supplement, not replace, its long-time partners. "Our dedicated last-mile delivery network just delivered its 10 billionth package since launching over five years ago, and we're proud to provide a great service for our customers," an Amazon spokeswoman said.

"In just a few years, Amazon has built its own UPS," says Marc Wulfraat, president of the logistics consulting firm MWPVL International Inc., who estimates Amazon will deliver 67% of its own packages this year and increase that to 85%. "Amazon keeps spreading itself around the country, and as it does, its reliance on UPS will go away."
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Amazon Plans To Put 1,000 Warehouses In Suburban Neighborhoods More

Amazon Plans To Put 1,000 Warehouses In Suburban Neighborhoods

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  • Amazon Flex lawsuit will hit them like fedex was h (Score:3)

    by Joe_Dragon ( 2206452 ) on Thursday September 17, 2020 @08:09AM (#60515054)

    Amazon Flex lawsuit will hit them like fedex was over the fake 1099 of the drivers.

  • "In just a few years, Amazon has built its own UPS"

    At this point I think we can call it ADS, or Amazon Delivery Service.

    Why compare it with UPS anyway? UPS is the worst of all the shipping companies in Canada and probably also in the U.S.A. if Ace Ventura was any indication.

    • I've had far more packages punctured and/or folded into very strange shapes by FedEx than by UPS. YMMV, I guess.

      • Re:Let's call it what it really is (Score:5, Informative)

        by aitikin ( 909209 ) on Thursday September 17, 2020 @09:40AM (#60515400)

        I've had far more packages punctured and/or folded into very strange shapes by FedEx than by UPS. YMMV, I guess.

        As someone who works for a company that literally ships thousands of packages a day through both FedEx and UPS, I can confidently say that it depends on the area and depends on if it's shipping Ground (often outsourced for the last mile by both carriers) or Express (almost always, if not always, handled the entire way by the carriers themselves). My company primarily ships FedEx and, for the most part, we find them to be the better of the two, but we have literally thousands of clients that have problems with FedEx in their areas, so we ship UPS to them.

        The worst we've dealt with is USPS though. My shipping manager has the, "Priority Fail" meme saved to her desktop because of how often we have issues with them, even before this year's slowdowns.

        Personally, I prefer FedEx as they will do "Hold at Location" for pretty much any FedEx Office and many other places like Walgreens for free, whereas UPS Stores are franchised and can charge or simply refuse to hold packages for customers.

  • They can put them in all of the closed-down mom & pop shops (or in the JC Penny's, Sears, etc.)

    To paraphrase Demolition Man...

    "Now ALL stores are Amazon..."

    • Re:Locations (Score:5, Interesting)

      by jellomizer ( 103300 ) on Thursday September 17, 2020 @08:43AM (#60515186)

      It is funny about 10-15 years ago. We were so worried about Walmart being the the disruptive force.

      However what I find interesting, is if they put these warehouses in suburban neighborhoods, why not allow us to go in and pickup what we need without having to wait for delivery all together.

      Perhaps I am a bit weird that I usually just buy things online which are things I cannot find locally anyways.

      Because I have transitioned to work from home, I wanted some extra computer monitors to hook up to my work laptop. I didn't need a fancy gaming monitors, just normal ones. So I went online and reserved them at my local staples and then I drove to the store picked them up, and went back home. This took about 40 minutes from order to me having the product in my hand.

      However also working from home, I have found my home Wi-Fi router didn't reach my prefered office location well, So I needed a much more powerful one. I couldn't find it at my local store for a reasonable price, plus they needed to order it and have it shipped to the store... So I then bout it online, and I had it in less than a week.

      If Amazon is going to have its most common items at a wearhouse nearby, why not let us just stop by and pick up the items ourselves vs waiting for it to be delivered.

      The Brick and Mortar store, the new frontier of the modern economy.

      • Re: (Score:2)

        by ugen ( 93902 )

        I am sure "pick up at the warehouse" will be an option, just like right now customers can pick up their orders at Amazon stores (if you have any nearby), lockers etc.
        It's just that vast majority of buyers do not use those options r/n.

      • Re: (Score:2)

        by cusco ( 717999 )

        They already have that for groceries, it's called 'Whole Foods'. :-)

        Seriously though, I would be shocked if putting their Amazon Go stores in many of the locations wasn't already part of the plan, they're incredibly smart people who do customer research like no one else. There will probably be something like a modern version if an Automat as well, where you order the item, scan the receipt on your phone when you arrive, and a couple of minutes later it comes out on a conveyor or maybe carried by one of the

      • We were so worried about Walmart being the the disruptive force.

        Worried? No. We encouraged it, by offering Wal-Mart tax incentives to locate in smaller neighborhoods, tax breaks that we didn't give to smaller brick and mortar stores owned by local entrepreneurs.

        • Depending on the communities.

          If the community was concerned about people having Jobs then they wanted Walmart in their community just so people can have jobs.
          If the community wanted to improve their community, they would be against Walmart in favor to companies who can offer better paying services.

      • I reckon they'll have the lockers on the outside of the building.
    • Comment removed based on user account deletion
    • They are already doing this. The locations server as intermediate hubs but also serve as customer pickup and return sites. But one of the reasons they are doing this that wasn't mentioned here is because of the recent regulatory approval of their drone service. The drones need to be strategically located within a few miles of a potential delivery site due to physical/regulatory restrictions and having warehouses closer to the last mile enables a wider audience for drone deliveries when they roll out.
    • How many general stores did Sears, Roebuck and Co. put out of business?

  • Amazon - the world's largest? Folks may disagree.. (Score:4, Insightful)

    by bogaboga ( 793279 ) on Thursday September 17, 2020 @08:47AM (#60515198)

    It will also help the world's largest e-commerce company take on a resurgent Walmart...

    ...bold mine...

    When measured by GMV for B2B and C2C, Alibaba is at least 3 times bigger [fool.com] than Amazon.

    I think we in America need to realise that there's a [bigger] world out there.

    • At least with Alibaba you know you're getting bottom dollar garbage from China.

    • That wall that's supposed to be build around your country, in the mindset of many Americans it's been finished since ages.

  • When you travel the world, there are small shops in almost every small neighborhood. Need the basics like apples, flour, or soda? Just walk a couple of doors down. Here in the states we have zoning laws that separate and regulate everything down to where you can put up a lemonade stand.

    I have advocated for a small neighborhood shops for almost my entire life but been told by the politicians that it will cause blight, it doesn't follow zoning laws, or will raise children's obesity. I'm always given a

    • Re:Disrupting the Suburban Zoners Dreams! (Score:4, Insightful)

      by tflf ( 4410717 ) on Thursday September 17, 2020 @09:37AM (#60515396)

      In North America, what has destroyed the small local shops is the arrival of the mega retail chains. Zoning restrictions are a secondary factor, and another area where mega chains have a lot of influence.

      A small local shop simply cannot compete with the big boys. The megas retail many of the same products for less than the wholesale cost a small local shop would be charged by a supplier, and the megas make a profit doing so. Most megas offer a huge variety of products, which means they provide the sterile one-stop shopping experience many now believe is how shopping is supposed to be.

      Megas persuade people to perform retail work for them (bag your own groceries or self-checkout are two examples) based on their much touted cost savings. Add in loss leaders, a business strategy designed to bring people in. None of these are options for the small retailer,

      Big retail has the resources, and the willingness, to lose money for extended periods of time, if it leads to larger market share.

      Any of the above strategies is economic suicide for a small retail shop.

      • The small local shops should be specializing in things that are more locally-oriented and things that the big chains won't ever keep in inventory. Having a staff that is knowledgeable about the items you're selling also helps a lot. Sometimes you need more guidance than random comments from buyers on Amazon.

      • Re: (Score:2, Interesting)

        by sound+vision ( 884283 )

        Wal-Mart came out ahead in a lot of the corona lockdowns as well. Depending on your jurisdiction, they may have been deemed an "essential business" because a fifth of the store has food and medicine. So they were allowed to continue selling - selling out of is what I saw in my area - bicycles, guns, lawnmowers, video games, etc. While every bike shop and GameStop was closed.

  • 10 years go Sears could have turned their locations into local delivery hubs and offered same-day delivery. But Eddie Lampert is an idiot.
    Would have offered traditional shopping, pick-up, or delivery, but some people can't think outside the box.

    But now, Amazon is ironically buying these closed buildings and doing almost the same thing.

    • Anyone that thinks Eddie Lampert actually bought Sears with the intention of saving it, is also an idiot.

  • Buy up old malls (Score:3)

    by RogueWarrior65 ( 678876 ) on Thursday September 17, 2020 @09:54AM (#60515470)

    Prediction: Amazon is going to buy up old malls and anchor store locations (e.g. Sears) and not just use them as warehouses but eventually turn them back into warehouse-style retail locations (think Home Depot, Lowe's, Costco).

    • Re: (Score:3)

      by cusco ( 717999 )

      I think it will be more like the old Automat, where you chose an item and it's brought to you. Their warehouse model is incredibly efficient, and no matter how good the Kiva robots are you really don't want shoppers wandering around in front of them. Programmatically it's just a small change to have the robot deliver the item to a conveyor or the customer rather than to the person who boxes it for shipment. There will probably be a Go and/or a Four Star at many of the facilities, but I doubt that a Sam's

      • Re: (Score:1)

        by Anonymous Coward
        I'm thinking a "Catalog Showroom" like the old chain Service Merchandise. [wikipedia.org] You browsed some displays, took a ticket for what you wanted to the checkout, paid for the item, and it was brought out from the warehouse.

    • Think Home Depot and Costco, but without shopping in aisles because those are used by robots that will go get the items you selected (either on your phone or from on-site tablets) from the ceiling-high shelves. Bonus points to making it all visible by the public, as a technological superiority showcase.

      • Also, all those local locations will help with drones delivery of smaller items. Old store locations are perfectly positioned because they are much closer to homes than their distribution centres which are usually farther away in industrial zoning areas.

  • Surprised the most obvious benefit of small widely dispersed warehouses is for Amazon - that many more people that can get last-ten-mile of delivery via drone, not truck. The less distance the drone has to fly, the more likely it is to work.

  • Amazon used to have good prices, fast shipping and broad availability of products. Since COVID none of this is true. I still have to wait two weeks for most of my "2 Day" shipping. Prime isn't worth it. I've had better prices and shipping from eBay sellers.

  • Please stop using amazon (Score:3)

    by wakeboarder ( 2695839 ) on Thursday September 17, 2020 @11:14AM (#60515890)

    Before they take over the world

  • Online is killing me (Score:3)

    by kaatochacha ( 651922 ) on Thursday September 17, 2020 @11:15AM (#60515898)

    It used to be when I needed something like, say a HD to replace on that had failed, I'd roll down to my local shop and buy it. I'd have it running in around 3 hours. Cost was $X
    Now, in the future, if my drive fails I can order it online for $X-Y. but shipping is Y meaning the price is a wash, and it takes two days to get to me.

    How is this any better?

    • Re: (Score:1)

      by Anonymous Coward

      It used to be when I needed something like, say a HD to replace on that had failed, I'd roll down to my local shop and buy it. I'd have it running in around 3 hours. Cost was $X
      Now, in the future, if my drive fails I can order it online for $X-Y. but shipping is Y meaning the price is a wash, and it takes two days to get to me.

      Proper nerds have a drawer full of spare hard drives (Does quick spare count: 2 obsolete, 1 failing, 5 usable spares, 2 usable spares of sufficient capacity to replace any live drive)

    • Well for starters your assumption is just not accurate. Here [amazon.com] is the amazon version at $75 (with free shipping) and here [bestbuy.com] is the best buy version for $25 more. Also, best buy doesn't even really carry this drive. You have to buy it online and wait 5 days for shipping (if you're lucky) compared to amazon's 2 days. Also, amazon has like 100x the selection of hard drives compared with best buy.

      It's better. That's why they're taking over retail. With more local warehouses it will be even better.

    • Come on, you don't buy new hard drives- You harvest them.

  • Most people other the same crap, depending where they live.

    After all, in the past, when shops still existed, they did the same, stock up on stuff people were asking for a lot.

  • Aren't these basically just local stores that deliver? If you need a 'warehouse' in every city you want to serve, aren't we just sort of going back to the brick and mortar setup that Amazon was fighting against?

    • I see your idea but that's not really the case. One can't wander in a warehouse with a shopping cart and look at nice retail displays, so no they aren't just stores that happen to deliver.

  • Sure.. I suppose if residential areas can now have hotels, why not mass shipping hubs? People don't want their residential areas to be quiet right?
  • So they are basically replacing local stores that go out of business and replace it with delivery. I can't wait in 10 years they be like, "NEW Amazon Pickup, come browse our showroom, purchase an item and take it home!" Yup, they'll have invented that too.

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