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EcommerceBytes-NewsFlash, Number 2702 - December 23, 2011 - ISSN 1539-5065    5 of 5

Amazon Builds New Warehouses as It Struggles with Capacity

By Ina Steiner
December 23, 2011

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Amazon.com announced Thursday it would build two fulfillment centers in Tennessee and two in Virginia. Amazon had added 13 distribution centers in 2010 for a total of 52 distribution centers at the end of 2010. In October of this year, the company's Chief Financial Officer said the company was experiencing the best growth rates it had seen since 2000 and revealed Amazon had plans to build 17 new warehouses.

Amazon uses its fulfillment centers to house its own inventory as well as inventory owned by third-party merchants using its Fulfillment By Amazon service.

During last year's holiday shopping season, Amazon warehouses were rejecting some shipments from third-party sellers - it seemed Amazon had run out of room for oversize shipments. Over the summer, the company restructured its Fulfillment by Amazon seller fees to discourage sellers from sending slow-moving inventory to its warehouses.

Amazon said on Thursday it would open two fulfillment centers in Virginia, investing $85 million in Chesterfield County, and investing $50 million in Dinwiddie County. Amazon will also open two new fulfillment centers in Tennessee, investing $135 million in the state.

All of the new facilities are expected to be complete next fall - possibly in time for next year's holiday shopping season.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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