Amazon Doubles Down on Fulfillment Network
Amazon Continues to Bring Delivery In-House
Amazon (AMZN) is becoming a fulfillment behemoth, nearly doubling the number of warehouses it operates over the last 24 months. These moves come as the ecommerce giant’s sales have surged amid the pandemic. Amazon added 450 new fulfillment centers in the past two years to store, pack, and ship items across the country.
Most of the new facilities are located near large cities to serve highly populated areas. The company also added smaller facilities which are stocked with popular items, enabling Amazon to better meet demand amid supply-chain issues. By growing its fulfillment network, Amazon is closer to its goal of delivering items in one day or less without relying on outside shipping companies.
Amazon Ready for the Holidays
Amazon’s bet on expanding its fulfillment capabilities during the pandemic is now benefiting the company. Despite supply-chain delays and worker shortages, Amazon said it is ready and able to deliver products in time for the holidays. Over 98% of packages arriving in Amazon’s delivery facilities are being delivered the following day. Some very in-demand items like sporting goods and household products are being delivered within a few days.
Amazon has been preparing for the holiday season since the start of 2021. While that is preventing any shortages, it does come at a cost. Amazon expects several billion dollars of extra expenses in the current holiday quarter.
Amazon to Open More Centers
While Amazon has long packaged boxes in one warehouse and sorted and shipped them from another, it is now opening all-in-one centers that serve as both fulfilment and delivery. Amazon plans to have about 30 of these hybrid facilities open by the end of the year. The centers, which can store as many as 30 million items, are located near big cities including Atlanta and Chicago. Amazon is expected to open about 150 of these hybrid centers over the next few years.
Worker shortages and supply-chain delays are not preventing Amazon from trying to control all aspects of ecommerce. While the world hunkered down, Amazon continued to build out its fulfillment network. Now, that bet appears to be paying off.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.