One would sure hope the local government made such distinctions. It would make a lot of sense.
But, I could see how a city might simply zone for commercial and residential then write a law that says all commercial locations must have one parking spot for every 100 sqft (or whatever) space. Maybe they never considered a warehouse being built there and never changed the law.
I do not know but it would not surprise me at all. Maybe Amazon has moments where they genuinely need all that space (as noted above during high volume times like leading up to Christmas).
Amazon Prime members are expected to hit 172 million in 2024. That’s two out of every three adults in America.
Cost of a membership is up to $139 annually. That means that Amazon starts with a revenue base of $24 billion.
Getting the remaining one-third of adults to join is an exercise in the Law of Diminishing Returns. Amazon execs surely believe that keeping the ones they have year after year is the sounder course.
They’ve gotten proven results by shortening the time in transit. One-day delivery is standard for most big cities, two-day delivery almost everywhere else. Warehouses everywhere make that possible.
That huge infrastructure isn’t just justified, it’s necessary, the driver of Amazon’s commercial success.
It would be crazy for the zoning requirements not to consider how the space will be used. A data center, for example, might be enormous but have very few onsite employees.
We have a small place in northern AZ, around 20 miles west of Flagstaff. It takes me around 2.5 hours to drive there from The Valley. Amazon has a warehouse in Phoenix, and it’s very common for me to get packages the next day, or even the same day. In Williams - not so much. I can have the package delivered to our main house, and drive down and get it several days faster than having it delivered up there!
I order from Amazon quite frequently and for at least the past couple (maybe three?) years, all my deliveries have been made exclusively by Amazon vans (or Amazon employees in their own vehicles).
By now, Wile E. Coyote has probably dropped Acme and instead is ordering from Amazon for his same day deliveries!
Many cities have parking requirements for commercial (non-retail) space based on the peak number of employees. That makes Amazon have a huge parking lot, because:
Amazon has some real high peaks (Xmas season) when they hire lots more temp employees, as mentioned.
Amazon likes to hire lots of part-time employees (to avoid paying benefits), so that increases their employee count.
Amazon facilities often operate 24 hours/day, 3 full shifts, so they have more employees than an average commercial business.
Some good answers. Here are two Google Map links showing the Amazon center I drive by and the McMaster-Carr distribution center. I’ve been in McMaster-Carr a few times and it is a marvel to behold with many levels of conveyors linked with spiral upramps and employees scurrying around with computers strapped to their forearms. Note the size of the parking lots for the two centers which both perform the same tasks. Compared to Amazon, McMaster-Carr has far less parking. However their business is steady, not seasonal.
In my rural area, Amazon delivery trucks do not exist. It’s possible that some of the private cars that deliver are contract players, but they never have signs to identify them as such.
In contrast, UPS, FEDEX, and USPS delivery vehicles are common in the area. USPS was running at least 2 separate vehicles in my residential neighborhood until recently (I think they have streamlined or modified their operation now). One of the vehicles was entirely packages, especially large ones, the other was a “regular” mail carrier that went mostly to mailboxes. Our local carrier complained that due to all the Amazon packages, her day was significantly longer and slower.
So it seems that Amazon has been tailoring their delivery practices to the market. That alone could explain why they are so successful. You can’t run a 21st-Century business on a 19th-Century plan.
When Sears was in its heyday, none of these services existed except USPS. And the ordering procedure didn’t have the immediacy of the internet. It’s not surprising that their procedure was different. What I have always wondered is why they couldn’t adapt, since they had a head start on Amazon.
A couple of notes. Amazon uses third party drivers using Amazon licensed vans and gear but technically they are not Amazon employees.
There are different building types. FCs store product and will pack/box the order. They send the packages to Sort Centers that will then distribute the boxes to Delivery Stations. It allows condensed facilities around metropolitan centers with a system to break it down into smaller and smaller areas. Amazon is more likely to use UPS or USPS when deliveries are farther away from any metropolitan area. Amazon delivers the majority of its volume but doesn’t have the scope/footprint of traditional shipping companies to reach rural locations.
That huge infrastructure allows them to keep costs down with a faster and faster speed. When Prime originally rolled out, free 2 day shipping was unheard of. Now 2 day shipping is the slower option a lot of the time for Prime customers. I ordered something today that actually had a shipping cost of $1.99 if delivered tomorrow but I could get same-day shipping free today.
Usually people get excited when Amazon builds a factory because jobs. The ones around here are located in industrial areas and where land is cheaper. If you buy a big splooge of land, build some huge factories and have room for more, might well need future expansion… what exactly is the incentive to have as small a parking lot as possible? A bigger lot may not add that much to construction costs. And it probably gets closer to full around holidays, or maybe planes or the Amazon Tardis need lots of space.
Possibly . But I think there be another factor. There’s an Amazon warehouse near me , which has lots of parking. And it’s possible that the building has that much parking because of a mandate - but mandate or no mandate, it would have had all that parking because in it’s previous life, it was basically a mall. I don’t think they could have found 300,000 square feet except in a former mall or maybe a big box store.
Much to the chagrin of a contract Amazon deliveryperson who chose to deliver to my house one night after 9:30, with no lights on in the house (kinda indicating we’d gone to bed). All I know is I heard a car pull into my driveway late, no IDing info, go to my door to see a person bent over on my porch, wearing a mask. I’m sure he’ll never unsee my full naked, handgun-toting response. Wife got a call from Amazon the next day, I got a call from the sheriff’s office that evening. Hey, don’t deliver so late, and at least identify!
Given the profits Amazon is making, it is pretty easy for them to justify their infrastructure. While an occasional order was cancelled during Covid, I have often been astounded by their speed of delivery.
The company reported overall revenue of $143.3bn in the first three months of the year – up 13% from the same period in 2023…
Well technically they would have to justify it to their board and shareholders, but given their EBITDA margin of about 15%, I believe they have justified it.