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Amazon isn't resting on its laurels in 2013. In fact, the company has announced that they will be erecting massive distribution centers across the nation—the idea being that the closer the inventory is to customers, the faster and cheaper the shipping will be.
The company just announced they will be building a million-square foot warehouse located about an hour East of San Francisco in Tracy, California, Wired reports. And in addition to the implications for faster shipping, Wired points out that the expansion marks a long battle between Amazon and certain states, including California.
Here's a little backstory. For years Amazon refused build distribution centers in California and certain other states to avoid collecting state sales tax, giving the e-tailer a major advantage over brick-and-mortar competitors. After pressure from California politicians, however, Amazon came to an agreement with the state: They would build big warehouses if they could postpone tax collection until fall of 2012.
Amazon started collecting taxes back in September, and according to Wired, they haven't seen any major customer backlash. The company has managed to create enough loyalty at this point that shoppers are sticking with them, despite the additional cost.
So now that Amazon seems to have come out on top of the state-taxes issue, these warehouses may be Amazon's best best at staving off increasingly aggressive manoeuvres on the part of brick-and-mortar competitors. Target is now matching Amazon prices in stores, for example, and Walmart is getting serious about same-day shipping.
Amazon's growing arsenal of massive warehouses like this one in California means they are strategically positioning themselves to fight back with same-day delivery options of their own. Which is great news for anyone who needs a 24-pack of toilet paper in a hurry.
· Amazon Sets Up (Really Big) Shop to Get You Your Stuff Faster [Wired]
· Walmart vs. Amazon: How America's Biggest Box Store Intends To Revolutionize E-Commerce [Racked]
· Wow: Target Stores Will Now Match Amazon's Prices [Racked]