Executive Briefings

By the Holidays, Amazon Will Have DC Within 5 Miles of Every Major U.S. City

Amazon will open eight new U.S. distribution centers between now and the holiday selling season, bringing the total to 54. The result of the ferocious building spree is that Amazon will then have a DC within five miles of most major U.S. cities. That means Amazon will very likely have a DC closer to your customers than many of your stores.

That dramatically cuts Amazon's delivery costs, and it's the most obvious explanation of why Amazon flipped its position on online sales taxes in 2011, from the leading opponent to a major supporter: All those warehouses give Amazon a big advantage over e-commerce rivals, and it doesn't want them to have a sales-tax advantage in return.

The e-tail giant will also increase its overseas DC count from 43 to 48.

Having bricks on the ground almost as close to customers as retailers themselves means more than cheap delivery. It means Amazon has almost complete control of when it will flip the switch for same-day delivery as a standard option.

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That dramatically cuts Amazon's delivery costs, and it's the most obvious explanation of why Amazon flipped its position on online sales taxes in 2011, from the leading opponent to a major supporter: All those warehouses give Amazon a big advantage over e-commerce rivals, and it doesn't want them to have a sales-tax advantage in return.

The e-tail giant will also increase its overseas DC count from 43 to 48.

Having bricks on the ground almost as close to customers as retailers themselves means more than cheap delivery. It means Amazon has almost complete control of when it will flip the switch for same-day delivery as a standard option.

Read Full Article