Amazon Supply Chain Projects Spell Trouble for Competitors

SEATTLE — Amazon, long ahead of the game in expediently delivering products to customers, is further expanding its supply chain infrastructure — and doing so at an astonishing pace.

Since the beginning of the year, the Seattle-based company has revealed plans to open an additional 20 fulfillment centers, in addition to a $1.5-billion air sortation hub in Kentucky, where it keeps its fleet of Prime Air cargo planes. 

Combined, the new fulfillment centers will give Amazon an additional 18,000 million square feet of space, significantly increasing its distribution capacity.

The most recent announcement from Amazon came earlier in September, when the company revealed that it will be opening its first fulfillment center in New York in Staten Island. While an opening date has yet to be announced, the 855,000-square-foot facility is estimated to create 2,250 fulltime jobs.

In August, Amazon announced plans for its third fulfillment center in Ohio, located in the Cleveland suburb of North Randall. The company also confirmed that it would be opening a 1-million-square-foot facility in Salem, Ore., which will be Amazon’s second fulfillment center in the state.

While Amazon has been announcing plans for expanding its supply chain infrastructure steadily over the course of the year, the spotlight has been on its acquisition of Whole Foods. Along with leading to lower prices at the gourmet grocer, the acquisition has led to integration with Amazon’s Prime membership program.

Taken collectively, however, the supply chain projects are more troubling from a competitive standpoint than the Whole Foods acquisition because they enable Amazon to achieve even faster deliveries at a time when rivals are wrestling with omnichannel basics such as in-store pickup.

To read the full story, visit Convenience Store News sister publication, Retail Leader.