One big difference between Boxed and the e-commerce giant: the startup sells only about 1,500 products, mostly household goods, compared with Amazon's roughly 350 million items from books to televisions to mixed nuts. Now Boxed has spent tens of millions of dollars on a new automation system, launching this month, to triple the output of its 140,000-square-foot warehouse in Union, New Jersey, without needing more space or workers.
Huang is betting that elaborate system helps keep costs down and lets Boxed thrive in the sales battle for household goods, a $700bn category dominated by supermarkets and big-box retailers.
“By having a smaller number of products, Boxed can get stuff out the door more cost effectively by reducing the warehouse footprint and the complexity of the operation,” said Clint Reiser, director of supply chain research at ARC Advisory Group. “It becomes a competitive advantage.”
While Amazon has also invested heavily in automation, most notably with its $775m acquisition of warehouse robot-maker Kiva Systems in 2012, it keeps hiring warehouse workers as it seeks to sell everything to everyone. Amazon’s fulfillment expenses — the cost of storing, packing and shipping products — increased 31 percent in 2016 while product sales increased 19 percent.
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