Amazon was never just an online marketplace.
At a time when staying “asset light” was in vogue for internet startups, Jeff Bezos started building out a network of fulfillment centers and other facilities needed to deliver the rapidly growing list of goods his company’s website was selling.
As the business grew more complex, Amazon added different types of distribution facilities. The primary goal: Deliver purchases more quickly than the competition, as cheaply as possible.
Here’s how Amazon moves millions of packages a year so fast: An order's first stop is usually an “inbound cross-dock,” which collects items from vendors on their way to the fulfillment center, where customer orders are boxed and addressed. From there, they may go to a “sortation center,” which divides up packages by the zip code of their destination so they can be delivered to the nearest US Postal Service office to be dropped off at the customer’s doorstep. They might also be taken to a local “delivery station,” which dispatches Amazon’s own couriers for last-mile distribution.
Although the system has become highly automated, the fulfillment network still employs more than 125,000 people, according to Amazon.
With the launch of the Prime Now service, Amazon has constructed hubs in dense urban areas to store common orders like toilet paper and batteries that can be sent to customers within a few hours. For grocery deliveries, there’s Amazon Fresh’s cold storage facilities, and now Whole Foods’ network of distribution centers.
Amazon’s rapid expansion along the more densely populated East Coast
All told, Amazon’s distribution network spans 333 buildings with 127.8 million square feet between them — and there’s another 41.7 million square feet in the works, according to MWPVL International, which closely tracks supply chains. That’s about the same as Walmart, which had 125.8 million square feet of distribution center space in 2017, including Sam’s Clubs.
Amazon, of course, has only existed for 24 years compared with Walmart’s 56.
As its hotly-contested and widely-publicized search for a second headquarters draws to a close, CNN Business is taking a top-to-bottom look at Amazon’s present — and what it means to our future in its series, The United States of Amazon.