Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Fri Apr 26 2019 01:33:48

Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

By: Ina Steiner

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Amazon is shaking up its network of fulfillment centers, presumably to prepare for its commitment to change its Free 2-Day Prime Shipping to 1 day, a bombshell announcement it made on Thursday.

In response to our inquiry about closures of some fulfillment centers, an Amazon spokesperson provided no details. "We are constantly evaluating our fulfillment network to ensure best customer selection and convenience. After thoughtful review, we've determined some of our facilities across the US would be better suited to handle different customer inventory and delivery."

But an article on Yahoo Finance indicated centers in California, Illinois, Texas, and New Jersey would be closed for remodeling, reporting that the centers are all "Amazon Robotics Quick Deploy," which are facilities that carry smaller items, ranging in size from 6 -18 inches, and use Kiva robots. "The buildings will be retrofitted for different purposes, including sorting centers, print-on-demand book facilities and Amazon Fresh delivery hubs," according to the article. 

The move comes as Amazon gets its fulfillment network ready for the transition to free next-day delivery for Prime members, who currently get free 2-day shipping.

Amazon Chief Financial Officer Brian Olsavsky said during a conference call with Wall Street analysts after releasing first-quarter earnings on Thursday that it had already begun increasing availability of 1-day delivery and had "turned the dial significantly" in April. It will see costs rise this quarter (ending June 30th), estimated it will spend $800 million in the three-month period. Most of the capacity it needs to build out will be worked on throughout the year (2019).

Olsavsky cited several benefits of the change to 1-day shipping during the call, including the following: 

-  it will enhance price, selection, and convenience for the customer.

- it will open up a lot of potential purchases.

- it helps increase the speed on *all* orders.

The CFO said Amazon will use its own AMZL logistics as well as third-party carriers to meet its next-day promise. Amazon needs the continued support of external transportation partners, he said.

One of the Amazon facilities impacted by the temporary closures is in Illinois, according to this KMOV news story from last week in which it said Amazon was changing a Fulfillment Center in Edwardsville "to allow it to handle different inventory," and said it was impacting hundreds of jobs.

Amazon said, "All employees have jobs waiting for them at nearby facilities as well as the option to explore career opportunities within Amazon across the country. We are working closely with each employee to ensure they are supported during this transition and we look forward to expanding our customer offerings in the months to come."

It's not clear if any sellers who use Fulfillment by Amazon (FBA) will be impacted.

We can only imagine how executives at rival retailers and marketplaces are taking the news.

Update: One day after Amazon announced it would be moving to 1-Day Prime delivery, Walmart indicated it would do the same.



Comments (21) | Leave Comment | Permalink

Readers Comments

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

by: notfunanymore This user has validated their user name.

Fri Apr 26 06:13:02 2019

Let’s see how eBays DW handles this one. eBay sellers... prepare yourselves for some more eBay policy changes and more fees if you can’t deliver in one day... it’s coming, in some morphed version that will come along with some fee changes if you can’t comply. Brace yourself. This’ll be a good one to sit back and watch  

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This user has validated their user name. by: toolguy

Fri Apr 26 10:06:56 2019

Everything I ordered from Amazon in 2018 came in 1 day.

It all came from a Las Vegas warehouse that's only 3 hours from where I live.

But that was last year, I NO longer have a prime account, , , ,Too Expensive

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This user has validated their user name. by: NoMoreEbay

Fri Apr 26 10:50:27 2019

This is going to be a big blow to ebay. No way they compete with that. Unless it's a OOAK, why on earth would buyers shop at ebay anymore.

DW is probably frothing at the mouth as we speak conjuring up more ways to fee-blast sellers.  

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This user has validated their user name. by: toolguy

Fri Apr 26 11:02:12 2019

Why do I shop on eBay over Amazon?

Because eBay has what I'm looking for and Amazon does not!

It's just that simple. . . . .And I would rather support a small seller then giant Amazon!

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by: mcposty This user has validated their user name.

Fri Apr 26 11:46:58 2019

Ebay needs to hire someone competent. I can think of a multitude of ways to leverage ebay.

But thats not how it works, ceos are all buddies do not get it twisted, and wenig will get his pay regardless and if ebay gets sold or goes under he will simply rub elbows for the next company that he can destroy.

As to Amazon, I await the day they are investigated for anti trust, and for anti consumer ( the sellers are their consumers of their services ) manpulations



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by: RL15 This user has validated their user name.

Fri Apr 26 12:45:19 2019

excellent.

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by: sasikat9 This user has validated their user name.

Fri Apr 26 14:14:51 2019

We only shop Amazon don't even have Ebay bookmarked anymore.

We love prime, two days is fine with us.

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by: grumpwell This user has validated their user name.

Fri Apr 26 18:20:33 2019

It seems that Amazon would be better off spending their money making sure that the items that are supposed to arrive in 2 days actually do. Between 25-30% of the Prime orders I place do not arrive on time. Why would I be inclined to believe that they can deliver in 1 day that which they can't currently deliver in 2 days?

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

This user has validated their user name. by: RKTOYS

Fri Apr 26 18:24:02 2019

Call me cynical but how much is this going to cost me in higher USPS charges?

Also I had an "interesting" conversation with another collector.  It was perfectly rational to stalk Amazon for months and put up with damaged goods to save 25 cents off Walmart prices.  But to avoid them over a $100+ mugging a few years ago, that was too weird.  Some collectors deserve what Amazon's going to do to the market.

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by: TomH This user has validated their user name.

Fri Apr 26 22:42:24 2019

lol, right!  I am a Prime customer and as noted by another person above, about 20 percent of my orders that are supposedly Prime and ship from Amazon, not 3rd party. do not arrive in the 2 day shipment guarantee.

Additionally, about 30 percent of my Prime orders that do arrive in the 2 day period, arrive generally after 8pm and verging more and more toward 9pm.

I really laugh at the Amazon in-house delivery detail above. AMZL or whatever it is called. For the last year they have mis-delivered 20 percent of the orders they handled.

I keep absolute correct records of my orders, I order a lot from Amazon, If they can do 90 accuracy in delivery with this new goal, I'll eat my hat..... lol

I live in Atlanta, and, in an area that is a major prime type of customer base for the company. Over all UPS and the USPS provide the most accurate and timely delivery of Amazon products I order and the Amazon in-house people a very distant 3rd.

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

by: Grady This user has validated their user name.

Sat Apr 27 22:07:40 2019

I know they want those packages to get there faster and faster, but if those Prime vans don't slow down and start driving like normal people they are going to kill someone trying to get a $9 item to my door. Is it really worth it? It's getting BAD!!! They drive like Formula 1 around here

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by: Whatever This user has validated their user name.

Sun Apr 28 00:26:18 2019

well I'm not selling the cure for cancer so when it gets there it gets there. Right now I switched to 3 day from 1 when GTC cancelled in because my sales went totally dead. It's given me alot more time to work on my own website which is now picking up ebay slack.  N las vegas is opening a new AMZ distribution center and hiring 1,300 new employees - maybe that's for the 1 days shipping thing?  Those yellow AMZ boxes are everywhere here now

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by: Flying Childers This user has validated their user name.

Sun Apr 28 07:23:12 2019

Amazon needs to pay taxes on their BILLIONS in earnings.

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by: ebayout This user has validated their user name.

Sun Apr 28 19:51:41 2019

@Flying Childers

Pause for a moment to consider how much in taxes Amazon employees pay...and where those taxes would come from if Amazon didn't exist.


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by: Chicago48 This user has validated their user name.

Mon Apr 29 03:46:10 2019

"We only shop Amazon don't even have Ebay bookmarked anymore".  Me too.  Ebay is the last thought and only if I can't find it on AMZ, WM or elsewhere.

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

by: Moonwishes This user has validated their user name.
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Mon Apr 29 10:06:18 2019

I have had a Prime membership for several years now that I also share with my son so he can get free shipping with his purchases. I have my reasons for keeping it and it is worth having for me. However, the other day I was ordering something, mouse traps and we were in a desperate situation here and needed them now!!!  In my search, I found one like we already had and it had Prime shipping, so I bought a 3 pack. While checking out I was offered the usual 1 or 2-day delivery option. So on Friday, I decided to check which day this past weekend they would arrive and in a big font, I see that they will arrive sometime between May 22-June 27! What in the world was going on? I had apparently missed the fact that before I finished the purchase they did mention that it might take 1-2 months, but I sure never noticed it. I canceled the order and then bought 3 single packs which were supposedly delivered yesterday. I hate Sunday deliveries. Why if it would take up to two months to arrive did I get a 1 and 2-day delivery option? I will certainly be more mindful in the future!

I have no need for 1-day delivery as I am certainly not ordering something that is essential to life such as chocolate (it melts in the mailbox)!  I am old enough that I remember that ordering anything, it would take up to a month to get to use. Anything quicker was cause to rejoice! The last thing we need is one more way to show the younger buyers that we live in an instant society,no waiting needed.

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

by: lisapar This user has validated their user name.

Mon Apr 29 10:51:29 2019

AMZ's promise of 1-day shipping will impact both buyer and seller.

Buyer:  Prime Membership will increase to cover AMZ's increased shipping/processing costs.

Seller:  AMZ will also increase FBA fees to help subsidize their cost to offer 1-day shipping service.

There's no such thing as a free lunch.

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

This user has validated their user name. by: MainelyVintage

Mon Apr 29 11:07:49 2019

Like @grumpwell, less than half of our Prime packages arrive in the 2-day window...  not sure if a 1-day window will change anything up here (I doubt Maine is getting a fulfillment center anytime soon lol.)

We stopped selling on Amazon about two years ago… I have considered reactivating the used book listings and then I read things like this and say noooooo.

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

by: Chicago48 This user has validated their user name.

Mon Apr 29 14:55:36 2019

No one mentions the added labor put on the workers.  I just hope AMZ employs more robots to take up the slack.

Perminate Link for Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime   Amazon Shakes Up Fulfillment Centers to Prep for 1-Day Prime

by: beuler This user has validated their user name.

Mon Apr 29 22:03:05 2019

Amazon plays dirty, bully on the block...last  4 or 5 orders not charged tax, another dirty tactic put everyone else out of business.  

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