In less than two decades, Amazon has changed the way consumers think about online shopping. Before the launch of Prime in 2005, two-day shipping was virtually unheard of. However, nowadays, millions of people are users of this service. In the beginning, free two-day shipping was Prime’s biggest selling point. But as Amazon expanded, the promise of free two-day shipping came with a host of caveats. For example, the company does not deliver small goods, such as razors or hair ties, separately. Instead, customers must purchase $25 worth of items before Amazon ships those items. As for the clients, they are dissatisfied with such conditions. Del Valle (2019) argues that the Prime service is like a gimmick that gives shoppers a false sense of security till they go to the checkout and see a delivery date much later than expected. In turn, this solution is beneficial for the company, as it reduces the cost of delivery.
To understand its motives, it’s important to descry Amazon’s warehousing. With the spread of the pandemic, consumers have become more likely to use online shopping. Waddell and Singh (2021) note that between 2015 and 2019, Amazon opened an average of about 75 new warehouses per year, ranging from huge warehouses and fulfillment centers too much smaller delivery stations. In turn, in 2020, Amazon opened nearly 300 new properties, allowing users to shorten the waiting time for an item.
In addition to the quantitative aspect, it is important to consider the qualitative one. According to Organized chaos: Behind the scenes of Amazon’s inventory management system, Amazon has created a well-thought-out warehouse ecosystem that also helps speed up delivery. Thus, goods received at the warehouse are placed not by category, as is customary in most systems, but by the availability of free space. For example, a separate tube of toothpaste can be stored next to a car battery. Bowersox (2019) notes that first, it speeds up the product placement process and the order-picking process. Secondly, such storage allows a rational use of space in the warehouse. Moreover, robotics is used in warehouses, which also speeds up the process.
Consumer Reports conducted an investigation into Amazon’s warehousing, from which the following conclusions can be drawn. According to Waddell and Singh (2021), first, Amazon opens most of its warehouses in areas with relatively large populations of people of color. Nationally, 69% of Amazon warehouses have more people of color living within a one-mile radius than the average area in their urban areas. Second, 57% of Amazon’s warehouses are located in areas with large numbers of low-income residents. Thus, Amazon is opening many warehouses in areas where land is cheap, which helps save money, open more outlets, and satisfy the demand of more consumers. Thus, as far as the financial side of the issue is concerned, the company receives significant benefits.
However, several other problems follow from such a warehouse management strategy. Waddell and Singh (2021) affirm that people of color and low-income residents suffer from Amazon warehouses. It manifests itself in increased air pollution from trucks and vans, more dangerous streets for children, and other quality-of-life issues such as traffic congestion and almost constant noise. Amazon is capitalizing on a national legacy of racist policies that have divided cities across the country for generations and have disproportionately impacted the health and environment of communities of color. Thus, the huge warehouses that are popping up in many communities exacerbate existing problems, from noise to localized air pollution.
References
Bowersox, D. (2019). Warehousing, materials handling and packaging. In: Supply chain logistics management (5th ed.). New York, NY: McGraw-Hill Higher Education.
Del Valle, G. (2019). Amazon created the expectation of 2-day shipping. Now it needs to scale back. Web.
Organized chaos: Behind the scenes of Amazon’s inventory management system. (n.d.). Web.
Waddell, K., & Singh, M. (2021). ‘Warehouses in their backyards’: when Amazon expands, these communities pay the price. Web.