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Old 01-10-2020, 03:56 PM
teela brown is offline
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Amazon distribution center: positive or negative effect on nearby home prices?


Amazon has been sniffing around my town, looking to plant a new distribution center. The latest attempt has been rejected roundly by nearby residents, but it got me to thinking: would it raise or lower a home's value to have a big distribution center nearby, say within a few blocks?
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Old 01-10-2020, 04:44 PM
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I would suspect that it would lower home values. Who wants to live within a few blocks of a major distribution center with commercial vehicles coming and going all day long.
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Old 01-10-2020, 04:52 PM
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They probably aren't going to be zoned in to have housing within a few blocks. That's not the case with the distribution center in my parent's town anyway.

1 data point, my parent's house was bought for $330K in 2006, 2 years before the housing bubble crash (imo, they overpaid). Amazon moved in in 2012. Their house according to zillow is now worth $351K. Obviously correlation does not equal causation but it's hard to argue that it decreased their home's value.

Anyway it would seem to me you could zillow around distribution centers, look up when they came to town, find pre-existing homes and get an idea that way.
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Old 01-10-2020, 04:56 PM
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It really depends on the location. If it's zoned industrial already, some other big business with trucks is going to move in anyway.

If there's a vote to change a parcel to industrial from something else, be it residential or business, then yeah, that would affect home prices.

There's a distribution center near me in the next town over. Their city income tax coffers overflow with money from that. And since the damn thing is right on the corner next to my city, the trucks drive through HERE to get to the freeway, using our roads with no tax money at all. That SUCKS from a governmental revenue/expense standpoint but still doesn't have much impact on our home values.
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Old 01-10-2020, 05:00 PM
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The one near me, as well as the one they're building near me, I practically on top of the freeway. Also, while they're in residential areas, they seem to be in the areas that are the least populated and/or surrounded by other big businesses.

I couldn't tell you what it does to property value, probably about the same as any other large distribution center. Sure, no one wants to live across the street from it but, on the other hand, it's suddenly dropping 1500 jobs, so people will move to the area if they can find work there.

Something else to think about is that these places are massive. Like, really, really huge. The one by me is about 1.5 million sqft and the one they're building is supposed to end up being over 2.5 million sqft. and hundreds of acres between the two of them.

I know people are concerned for their own homes losing value, but you might have to find a different way to word it if you talk to the city about since they'll still come out ahead. What they'll lose in your homes' property taxes, they'll more than make up for having a giant building on otherwise unimproved land.
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Old 01-10-2020, 05:55 PM
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we have one opening soon in our area and it's next to I-40 in an industrial area so there is no worry about home prices. They say it will employ 1500 people along with robots.
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Old 01-10-2020, 08:05 PM
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Simple economics.
It brings in 1500 jobs.
People want those jobs.
People don't want to commute.
Housing close to the plant becomes desirable, increasing its demand.
Increased demand means the price goes up.

Really, really simple.
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Old 01-10-2020, 09:05 PM
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Originally Posted by Noelq View Post
Simple economics.
It brings in 1500 jobs.
People want those jobs.
People don't want to commute.
Housing close to the plant becomes desirable, increasing its demand.
Increased demand means the price goes up.

Really, really simple.
Lots of assumptions there. Where I'm at, the housing surrounding industrial/manufacturing areas that has a lot of jobs tend to be less pricey neighborhoods. More expensive housing stock is generally away from these areas. I don't think people desire living near the plant they work at as much as you think they do.

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Old 01-10-2020, 11:44 PM
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Lots of assumptions there. Where I'm at, the housing surrounding industrial/manufacturing areas that has a lot of jobs tend to be less pricey neighborhoods. More expensive housing stock is generally away from these areas. I don't think people desire living near the plant they work at as much as you think they do.
You confuse desirable pricey neighborhoods with desirable working class neighborhoods.
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Old 01-10-2020, 11:53 PM
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Many Amazon workers are paid so little they qualify for Food Stamps.
They won't be able to buy a house on that income! So not much effect on the housing market.
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Old 01-11-2020, 12:30 AM
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You confuse desirable pricey neighborhoods with desirable working class neighborhoods.
Perhaps, but I don't think it's quite as simple as the equation given above. I live in a mixed working class/white collar neighborhood, and there is a lot of pushback against having a warehouse distribution center developed directly north of here (in a clearly blue-collar neighborhood.) Much of the concern is pollution and traffic, and the neighborhood where it's being proposed, in addition to our neighboring neighborhood, seems to be largely against it. We don't need more traffic and pollution here. I don't think at all is is "simple" to say home prices will rise.

Last edited by pulykamell; 01-11-2020 at 12:34 AM.
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Old 01-11-2020, 08:23 AM
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You confuse desirable pricey neighborhoods with desirable working class neighborhoods.
This is key. If the neighborhood around the center in the OP is pricier then it's a negative. If it's a distressed area with several vacant houses, then it's a plus.
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Old 01-11-2020, 09:48 AM
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This is key. If the neighborhood around the center in the OP is pricier then it's a negative. If it's a distressed area with several vacant houses, then it's a plus.
I was originally going to suggest that, but the interesting thing is the distribution center proposed (actually, I should say "passed." Looking up more info, it seems to be a done deal -- I thought it was still in the proposed stage) near my neighborhood is getting significant pushback from the neighborhood that is, in fact, a good bit below the national household income, and 34% of its residents live beneath the poverty line. Yes, it would seem this is the place where a distribution center would perhaps raise home values, but the neighborhood sentiment is not that welcoming to the distribution center. Once again, I don't think the economics are that simple. There's a lot of variables that go into this. At any rate, despite the pushback, it seems the distribution center will be built (the previous alderman voted for it, the current one is against it, but it all passed city council and they got city money), so we'll see what it does to home values around here.

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Old 01-11-2020, 12:39 PM
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Originally Posted by Noelq View Post
Simple economics.
It brings in 1500 jobs.
People want those jobs.
People don't want to commute.
Housing close to the plant becomes desirable, increasing its demand.
Increased demand means the price goes up.

Really, really simple.
You are assuming those are long-term jobs. Are they?

Do people really stay in these jobs long enough to want to move and buy a new home?
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Old 01-11-2020, 12:41 PM
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You are assuming those are long-term jobs. Are they?

Do people really stay in these jobs long enough to want to move and buy a new home?
No. But they rent. Buying homes to rent to those workers is a very good investment.
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Old 01-11-2020, 12:42 PM
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I was originally going to suggest that, but the interesting thing is the distribution center proposed (actually, I should say "passed." Looking up more info, it seems to be a done deal -- I thought it was still in the proposed stage) near my neighborhood is getting significant pushback from the neighborhood that is, in fact, a good bit below the national household income, and 34% of its residents live beneath the poverty line. Yes, it would seem this is the place where a distribution center would perhaps raise home values, but the neighborhood sentiment is not that welcoming to the distribution center. Once again, I don't think the economics are that simple. There's a lot of variables that go into this. At any rate, despite the pushback, it seems the distribution center will be built (the previous alderman voted for it, the current one is against it, but it all passed city council and they got city money), so we'll see what it does to home values around here.
Oh, and I should say, personally, in this case, I think it will have little effect on the surrounding housing prices, either good or bad.
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Old 01-11-2020, 01:32 PM
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I was originally going to suggest that, but the interesting thing is the distribution center proposed (actually, I should say "passed." Looking up more info, it seems to be a done deal -- I thought it was still in the proposed stage) near my neighborhood is getting significant pushback from the neighborhood that is, in fact, a good bit below the national household income, and 34% of its residents live beneath the poverty line. Yes, it would seem this is the place where a distribution center would perhaps raise home values, but the neighborhood sentiment is not that welcoming to the distribution center. Once again, I don't think the economics are that simple. There's a lot of variables that go into this. At any rate, despite the pushback, it seems the distribution center will be built (the previous alderman voted for it, the current one is against it, but it all passed city council and they got city money), so we'll see what it does to home values around here.
It seems like the traffic issue would be a legit concern if it's truly in the heart of housing area. But just because it's a legit concern about possible traffic impact doesn't mean it would have a negative effect on housing prices. The people are responding to change in their environment but the market would probably respond more to the availability of jobs.

I know most of these jobs are minimum wage but not everyone has one of these jobs as the primary family income, it could be secondary or a young person with no dependents, so I think the market (people buying houses) would on average view it as a net positive.
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Old 01-11-2020, 01:52 PM
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Many Amazon workers are paid so little they qualify for Food Stamps.
They won't be able to buy a house on that income! So not much effect on the housing market.
Are trailer parks springing up near any distro centers?

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Originally Posted by RaftPeople View Post
I know most of these jobs are minimum wage but not everyone has one of these jobs as the primary family income, it could be secondary or a young person with no dependents, so I think the market (people buying houses) would on average view it as a net positive.
Do we have age or dependents breakdowns of Amazon distro workers?
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Old 01-11-2020, 02:52 PM
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Are trailer parks springing up near any distro centers?
There's the Amazon CamperForce. Yes, it's real.
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Old 01-11-2020, 03:02 PM
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There is a large distribution centre not far from my house - maybe a ten-minute walk. There are several other large and medium-sized businesses there too so it's impossible to tell what impact they have on house values. Schools are much more important to most home buyers and we benefit from having two highly rated schools within walking distance.

What is also important is that the goods traffic to and from the industrial units is routed well away from us so it has no discernible effect.
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Old 01-11-2020, 03:03 PM
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I am not a real estate broker, but my sense is that it would take a very small and economically depressed area to be positively influenced by 1500 minimum wage jobs. Maybe if you live in rural West Virginia the houses might go from $50k to $75k. I dunno.
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Old 01-11-2020, 06:48 PM
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Originally Posted by Noelq View Post
Simple economics.
It brings in 1500 jobs.
People want those jobs.
People don't want to commute.
Housing close to the plant becomes desirable, increasing its demand.
Increased demand means the price goes up.

Really, really simple.
If we're talking a Dpp/AMZL/distribution center
It brings in maybe 500 part time jobs people leave fairly regularly and maybe 30 full time jobs.
Anyone over 7 weeks is a veteran employee; that is how much people want to keep those jobs.
People would rather commute and hope for something better closer to where they live now.
Managers, the ones who can afford houses, do NOT want to be close to work; trust me. Most would rather commute an hour rather than risk being called in constantly for dumb crap from the Site Lead.
800 or more vans plus flex drivers and their cars plus a few semis on neighborhood streets usually screws up the value of houses nearby.

Simple really.


From the three places I have been in the sortation center didn't have any effect at all, the delivery/distribution station is hurting values near it slightly, and the other is so far in the sticks that it couldn't have an effect no matter what. Amazon basically knows this which is why they pick former UPS/Fed-Ex sites (where the damage has already happened) or industrial parks in the middle of no-where. But where the smart financial move is something else they aren't above taking it.

Camper patrol ----- usually more around fulfillment centers; the places where the boxes are filled. Those are the ones with huge staffs and more full-time positions. We had one camper for a month this winter but that was basically until he could get some work done on his truck and get to a FC. Even in Peak Dpp and SCs don't produce the 60 hour weeks for December most of those folks are really trying for.
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Old 01-11-2020, 07:00 PM
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I am not a real estate broker, but my sense is that it would take a very small and economically depressed area to be positively influenced by 1500 minimum wage jobs. Maybe if you live in rural West Virginia the houses might go from $50k to $75k. I dunno.
FCs are a little different but .......

Even at $15 per hour the basic AA these days is bringing in maybe $14k to $16k a year even after you get VET (voluntary extra time) and add that in. Many shifts are 3 hours a day and only 5 days a week or less. When the company raised the pay they also did away with the 18 hour minimum and other stuff we had. Over the year I made less during 2019 than I did in 2015; a lot less. So even in a broke-ass inner-city slum or Appalachia it isn't going to raise things all that much. It may (and does) let some poor and/or older people stay in their homes but it isn't going to make a blip in the estate once they are gone.

Don't get me wrong; I love where I am and stay there even though I don't have to. But part of what makes it fun is I don't need it. To rely on it, to think the community will benefit ------- rarely. Very rarely. Even for the places with the serious jobs like the HQs ---- expect more losers than winners.
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Old 01-12-2020, 09:47 AM
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Wow, lots of acronyms here that go over my head. But I think I get the gist.

The most likely place Amazon will seek out next is less than a quarter mile from my house, in a place that's already zoned as industrial. Housing is indeed within a few blocks of this site; maybe it's different here near Silicon Valley, where things are squeezed more tightly together. And all of the housing surrounding the site is upscale, although not super fancy.

Good point about most of any new jobs being part-time, minimum wage jobs. That'll be good for landlords renting out rooms, but not great for home-buyers.

Using Zillow, I've taken a look at housing prices surrounding an Amazon facility in Newark. The surrounding housing doesn't seem to have suffered, so there's that.

But Silicon Valley sprawl and traffic is engulfing my little semi-rural town, and an Amazon distribution center a quarter mile away is not what I want.

Well, the town shouted down one attempt, so if this latest plan nears fruition, maybe we'll shout this one down too. Or maybe we'll retire before then and move to some rural area that won't become engulfed until after we die of old age.
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Old 01-12-2020, 03:21 PM
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Wow, lots of acronyms here that go over my head. But I think I get the gist.

Part of that is Amazon; its almost a second language somewhat associated with English but then again ------------

A distribution center can be one of several things:

1) A huge warehouse operation where they get massive amounts of things from makers and break it down to send out to the various area fulfillment centers. Much space and all the traffic is pretty much semis; not a lot of employees. Say maybe 100?

2) A sortation center that gets loads from the FCs (fulfillment centers) and breads them down to individual post office routes and send some as a sort of support terminal to the local AMZL delivery stations. Lot of semis (50 or more a day) and a lot of employees; maybe as many as 300-500.

3) A delivery station where loads are broken down to various van and flex driver routes around say a 50 mile circle or a bit more. Tons of all kinds of traffic from semis (4-15 a day) to as many as 1000 cars and vans. Maybe 150 Amazon jobs and most of the drivers want to be commuters so lets not count them.

4) Specialized stations for things like washers, carpets, and things that could need installed. A fair amount of semis and maybe 20-30 box trucks. And a total Amazon staff of like 30 people.

Just what is being planned near you I don't know and if the company says it could very well be not the truth. Not because they want to lie but because everything is "need to know" where Seattle figures no-one needs to know. I got friends <push nose to the side> in Phoenix (some of your "away/start-up team would come from there) ------- I could reach out and see what the skinny is; us peasants often know well before the bosses. Peasants are like that. But for purposes of this discussion it really doesn't matter. Just call it some bad possible, some good unlikely, and right around status quo around normal.
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Old 01-12-2020, 03:37 PM
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Good point about most of any new jobs being part-time, minimum wage jobs. That'll be good for landlords renting out rooms, but not great for home-buyers.
Missed the edit window

Not minimum wage (depending on your state) since their/our standard is $15 per hour. But when you extend out the math:
$15x15 hour week = $225 a week before taxes
x 52 weeks = $11,700

And since almost every place has some sort of voluntary overtime/extra time (as we call it), and some places have some longer shifts, you can usually get more like $13k-$14k a year but the days of working as a peasant/AA/Tier 1/Amazonian and bringing in $18k over the course of a year went away when they jumped the standard pay from $11.25-12.50 to the $15 thingy.

Because overtime (federal and state) kicks in once we hit 40 hours Seattle makes sure everyone overstaffs to the point that you CAN'T go over 40 hours. You are only allowed 2 shifts a day, 6 days a week. In 2015 I did 8 shifts a week for Peak and averages 53 hours a week. This year, for Peak 2019, I did 12 a week and went over 30 hours once. Again, I understand the business side and I am not saying its a bad thing, but the end result of our pay raise was a cut in income.

There is a book out there called The Everything Store: Jeff Bezos and the Age of Amazon ---------- its worth the read even though its terribly dated now.

Last edited by kopek; 01-12-2020 at 03:41 PM.
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Old 01-12-2020, 07:29 PM
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One of these Amazon facilities moved to 3 miles from my house a few years ago. I can't actually tell the difference. Haven't been studying real estate prices, tho.
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Old 01-13-2020, 03:53 AM
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Many Amazon workers are paid so little they qualify for Food Stamps.
They won't be able to buy a house on that income! So not much effect on the housing market.
Remember that their lowest FT salary is $15/hour, over $30k a year. That's not typically food stamp money, in my experience.

The Amazon site here is in an industrial area, clearly chosen because it's within a half mile of a FedEx, UPS, and USPS processing center, as well as another distribution center. There are some houses scattered around, but they're farmhouses that pre-date all the industrial stuff, where the original owners sold all the land surrounding the house but chose to stay where they were, noise, traffic and all.
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Old 01-13-2020, 04:00 AM
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Remember that their lowest FT salary is $15/hour, over $30k a year. That's not typically food stamp money, in my experience.
You're falling for a most typical lie.

"FT salary" -- meaning full-time salary. But by far most of their workers are NOT full-rime, they are only hourly part-time. Which also means they don't get benefits lik health plans, sick leave, vacation, etc.
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Old 01-13-2020, 07:17 AM
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with the unemployment rate so low can they really find people who only want to work part time? Pretty sure that would be a problem here.
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Old 01-13-2020, 07:27 AM
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with the unemployment rate so low can they really find people who only want to work part time? Pretty sure that would be a problem here.
One of the oddities of the current cycle is that workers' salaries are not rising due to the low employment rate. A lot of people are still stuck working 2 or more part time jobs.

It's not just Amazon.
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Old 01-13-2020, 08:16 AM
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with the unemployment rate so low can they really find people who only want to work part time? Pretty sure that would be a problem here.
Most of the people who currently work part time are doing so because they aren't in the market for full time work.
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Old 01-13-2020, 10:42 AM
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One of the oddities of the current cycle is that workers' salaries are not rising due to the low employment rate. A lot of people are still stuck working 2 or more part time jobs.

It's not just Amazon.
The rate of multiple jobholders is historically low, although BLS has only been tracking it since the mid-90s. It doesn't fluctuate much, good economy or bad. The minority (~25%) are working multiple part-time jobs.

(Real) household, family, and personal income are all higher today than they've ever been.
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Old 01-13-2020, 12:12 PM
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I've been to over thirty Amazon DCs - I work for one of the outfits that does the automation inside. None that I can remember are anywhere near homes.
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Old 01-13-2020, 02:14 PM
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I've been to over thirty Amazon DCs - I work for one of the outfits that does the automation inside. None that I can remember are anywhere near homes.
Do you work for Dematic?
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Old 01-13-2020, 02:24 PM
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with the unemployment rate so low can they really find people who only want to work part time? Pretty sure that would be a problem here.
For our DC and the other ones I'm aware of, most of the people are from temp agencies due to seasonality/variability of the work. Each day/week the number of people required is sent to the agency based on current work conditions and they send that number. Those same workers are typically bouncing around between some number of local DC's based on need.

For the best workers, we either hire them perm if spots are available or we request them continually so they end up with full time work generally.

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Old 01-14-2020, 12:29 AM
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Simple economics.
It brings in 1500 jobs.
People want those jobs.
People don't want to commute.
Housing close to the plant becomes desirable, increasing its demand.
Increased demand means the price goes up.

Really, really simple.
Nah. It brings in a fraction of those jobs, most are part time or don't pay well enough for the employees to buy houses and, unless you're living next door, you're going to need to drive anyway. Most of the warehouse employees are hired through temp agencies and dropped before they have to be offered full employment ("Direct hire after 90 days!").

Truck traffic takes a massive toll on the local infrastructure (plus the trucks regularly ignore local ordinances about residential roads), housing prices stay low because most people don't want to live next to a busy warehouse and people who do work in the warehouses aren't making much money so the new local businesses tend to be dollar stores, payday loan shops and fast food joints. Plus, the local municipality usually gets screwed on the tax incentive deals they offered to attract the warehouses in the first place.

Edit: Should note that Amazon distribution centers aren't built in a void. At least around here, they're in the same region as multiple other similar warehouses and distribution centers.

Last edited by Jophiel; 01-14-2020 at 12:34 AM.
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Old 01-14-2020, 04:42 AM
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You're falling for a most typical lie.

"FT salary" -- meaning full-time salary. But by far most of their workers are NOT full-rime, they are only hourly part-time. Which also means they don't get benefits lik health plans, sick leave, vacation, etc.
Hard numbers are almost impossible to find but going by what I know ---- say 3-5% are full-time including those at the $15 level such as production assistants and the like. Amazon has a habit of contracting out most of the full-time work like drivers and janitorial services rather than deal with things like health care and benefits.

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For our DC and the other ones I'm aware of, most of the people are from temp agencies due to seasonality/variability of the work. Each day/week the number of people required is sent to the agency based on current work conditions and they send that number. Those same workers are typically bouncing around between some number of local DC's based on need.

For the best workers, we either hire them perm if spots are available or we request them continually so they end up with full time work generally.
We should have a beer some day; lets just say my experience is different enough that I'm really curious now. Not in a bad way but really curious. Agency hires were tried here our first couple years and were a real failure. Most didn't make it through their first day let alone week and the behavioral issues were really bad. Now 100% are Amazon hires although most are "seasonal" (in our language blue-edged or white badges) rather then "full time part time" like me. The general rule is to convert some over the "blue" and shed the rest as volume dictates. Some bounce - I know a friend who has been at the Dpp, SC and XL over the last year - but more often you leave Amazon and return at some future date.

Our AMZL DCs --- the volume is pretty steady and planned based on a lot of factors; the number of "me's" not being much of a consideration. Peak and mini-Peak are the exception since the Great Brewhaha Christmas that started the whole SC experiment in the beginning. "We" will control our customer experience - end of discussion. Even with SCs things are pretty much stable throughout the year; its only the FCs that seem to get hit with sudden surges throughout the months.
  #39  
Old 01-14-2020, 12:00 PM
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We should have a beer some day; lets just say my experience is different enough that I'm really curious now. Not in a bad way but really curious. Agency hires were tried here our first couple years and were a real failure. Most didn't make it through their first day let alone week and the behavioral issues were really bad.
There certainly are challenges with quality. During holiday and busy times, we pay bonuses if they will just show up each day for a full week. It's amazing how many people would prefer to skip that extra money and just not show up. But we also get high quality people, so it's a mixed bag.

Not sure how to do it without the temp agencies, it would be pretty difficult to adjust rapidly without a pool of people available.
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Old 01-14-2020, 12:08 PM
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Our AMZL DCs --- the volume is pretty steady and planned based on a lot of factors; the number of "me's" not being much of a consideration. Peak and mini-Peak are the exception since the Great Brewhaha Christmas that started the whole SC experiment in the beginning. "We" will control our customer experience - end of discussion. Even with SCs things are pretty much stable throughout the year; its only the FCs that seem to get hit with sudden surges throughout the months.
Because we are much smaller than Amazon, our "DC" is not specialized, it's a combo of traditional wholesale+retail distribution combined with e-commerce fulfillment. The different channels have slightly offset seasonal peaks (due to specifics of logistics, e.g. large retailers need holiday product earlier than ecommerce consumers order theirs), so that smooths it out a little but there are definitely spring and xmas peaks substantially larger than other times.
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Old 01-14-2020, 12:26 PM
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Do you work for Dematic?
No, but you're close We have our machines in Dematic facilities though as well as our own so I have been in both.
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Old 01-14-2020, 01:22 PM
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No, but you're close We have our machines in Dematic facilities though as well as our own so I have been in both.
LPA's?
Auto-bagger?
RF scanners?
Voice units?

I figure it's not something like a sorter (physical), pick to light/put to light or something like an ASRS because I think Dematic makes those.

Last edited by RaftPeople; 01-14-2020 at 01:24 PM.
  #43  
Old 01-14-2020, 01:33 PM
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LPA's?
Auto-bagger?
RF scanners?
Voice units?

I figure it's not something like a sorter (physical), pick to light/put to light or something like an ASRS because I think Dematic makes those.
Intelligrated.
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Old 01-14-2020, 02:50 PM
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Intelligrated.
Ah, I assumed that wasn't it because you said you had your machines in some Dematic facilities, I assumed it was pretty much one or the other for those two companies.

Do very many facilities have a mixture of equip+systems?

Last edited by RaftPeople; 01-14-2020 at 02:50 PM.
  #45  
Old 01-15-2020, 11:43 AM
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Ah, I assumed that wasn't it because you said you had your machines in some Dematic facilities, I assumed it was pretty much one or the other for those two companies.

Do very many facilities have a mixture of equip+systems?
Dematic doesn't have a tote stacker, so they use ours.
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Old 01-15-2020, 12:23 PM
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Dematic doesn't have a tote stacker, so they use ours.
One of those is probably in our future.
  #47  
Old 01-15-2020, 04:09 PM
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Originally Posted by Tim@T-Bonham.net View Post
You're falling for a most typical lie.

"FT salary" -- meaning full-time salary. But by far most of their workers are NOT full-rime, they are only hourly part-time. Which also means they don't get benefits lik health plans, sick leave, vacation, etc.
There's an FC nearby and I used to work there; my nephew still does. They have NO part time positions - it's a constant complaint, because there are plenty of college students who'd work weekends if they could. Not even the temps they hire for Peak get an option to work part-time.

But go ahead...
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