Are FBA warehouses facing elimination? Amazon's new plan will transform warehouses

Recently, Amazon is quietly making major reforms to its FBA warehouses, preparing to replace the current traditional warehouses with a new multi-storey warehouse model!

In the past two days, foreign media have revealed that Amazon has been acquiring land since last year, and has acquired more than 4,000 acres of land in various states in the United States. Some time ago, Amazon also announced that it would reduce the area of ​​FBA warehouses, so why is it still acquiring land?

I have studied it and found that Amazon's previous model for adding new warehouses is generally to expand the number and area of ​​warehouses through cooperation with developers and leasing. It only makes simple modifications and corrections to the original warehouses. This is actually a mature model that many suppliers are doing. Warehouses are not high in technology, so it is better to rent than to buy.

According to inside information, Amazon is indeed reducing the size of its warehouses, and even not renewing some expired warehouse contracts for business reasons. Amazon is also acquiring land, and the land it has acquired is interesting. Unlike pure warehouse land, the land acquired by Amazon has a characteristic that all have very loose land use conditions, and these lands can be used for almost anything. Moreover, these lands have very good geographical conditions, are very close to densely populated areas, and are expensive, so these lands are usually not used for warehouses.

Here we can combine a little-known warehouse of Amazon to see that as early as 2020, Amazon also acquired a small piece of land next to a bustling industrial zone on the border between the United States and Mexico. The price was very expensive, and the unit purchase cost far exceeded the cost of other Amazon warehouses in the same period. On this land, Amazon built a 40-meter-high super-high warehouse, while other FBA warehouses are generally less than 20 meters. There is no other super-high-rise warehouse so far. This is obviously a warehouse with an experimental nature to test the operation mode of high-rise warehouses.

At the time, Amazon was developing a new warehouse almost every day, so this small warehouse did not attract much attention. If Amazon had not fallen into stagflation, the official might not have picked up the high-rise warehouse model again.

When Amazon was promoting itself, it mentioned the business vision of the company, which has retreated behind the scenes, "making online shopping as enjoyable as shopping in a store," and tried to further shorten the delivery time. The company hoped that consumers' shopping could be delivered within 5 hours, which put forward very strict requirements on the warehouse location and scheduling mode.

Land prices in areas with good locations and close to consumer delivery destinations are very expensive. Super high-rise warehouses are a model to solve this problem. By raising the warehouse, a certain delivery and storage capacity can be achieved even on a small plot of land in the city center.

The internal automation of this super high-rise warehouse is very high. According to professionals who have visited the interior, the dispatching and distribution process of the super high-rise warehouse looks more like a manufacturing plant. On the one hand, this super high-rise warehouse is closer to the delivery destination, which can effectively reduce the delivery time. On the other hand, the highly automated management and distribution process can reduce a lot of labor costs, and it can also seamlessly connect with the drone delivery that Amazon is betting on.

So despite the high construction costs, Amazon still intends to expand the scale of this new type of warehouse to replace the existing traditional warehouses to a certain extent. In the future, this super-high-rise warehouse can even be transformed into a warehouse-style shopping store, similar to IKEA, to compete with Amazon's old rivals in the retail industry for offline market share.

This model is both sci-fi and futuristic. In the short term, we sellers will not see much effect. Moreover, drones and automation are things that require a lot of money. If things go wrong, the FBA fee may increase again in the second half of the year, which will be really a bummer. Everyone should prepare well for Prime Day this time. Amazon itself relies on this event to make a comeback, so there is no reason for us not to take advantage of it.

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