Amazon.com Inc. and such big competitors as Walmart Inc. and The Home Depot Inc. are building many new warehouses so they can deliver online orders the same day or next day to U.S. shoppers, especially those in the largest metropolitan areas.
Where is the biggest Amazon Warehouse?
A new analysis by BigRentz Inc., which rents equipment to companies, shows Amazon now operates 305 large fulfillment centers around the U.S. that average 800,000 square feet of storage space. By 2023, BigRentz says, Amazon will have at least 355 U.S. warehouses covering 319 million square feet.
Where are Amazon warehouses located?
California has the most operating or planned Amazon distribution centers at 35, followed by Texas at 28 and New Jersey at 17. The e-retailer’s distribution centers are concentrated close to many consumers, with eight of the 10 states with the most Amazon warehouse square footage being among the top 10 in population.
Also on the top 10 list for Amazon warehouse space is New Jersey, No. 11 in population, which serves consumers in neighboring New York State, which BigRentz does not list as among the leading states in Amazon warehouses. Amazon distribution centers in Tennessee, No. 9 in number of Amazon warehouses but not among the top 10 in population, enable Amazon to ship quickly to neighboring Georgia, the eighth most populous state.
“It certainly appears that Amazon is concentrating its distribution near the largest U.S. population centers,” says Lior Zitzman, director of digital audience at BigRentz. “Our analysis found that eight of the 10 states with the most square footage of warehouse space rank among the 10 most populous states. So there seems to be a strong correlation between population centers and Amazon warehouse locations.”
How many distribution centers does Amazon have?
In addition to locating mammoth warehouses such as the ones BigRentz tracks near big cities, Amazon is also opening many smaller facilities that sort packages for last-mile delivery to consumer homes.
Amazon operates 1,137 fulfillment centers of various types in the U.S., with announced plans to open 331 more, according to logistics consulting firm MWPVL International Inc. Another 47 warehouses operate in Canada, with an additional 26 on the way, MWPVL says.
That ecommerce warehouse count puts Amazon far ahead of its biggest general-merchandise retail rivals, Walmart Inc. and Target Corp.
According to MWPVL.
How does Amazon choose where its warehouses are located?
Amazon chooses warehouse locations in order to meet same-day or next-day delivery demands. So warehouse locations serve transportation, population, and location needs.
How many distribution centers does Walmart have?
Walmart operates 198 distribution centers of all types in the U.S., including 29 devoted to online orders. It has plans for 10 more facilities, of which six will be dedicated to ecommerce. Just this week, Walmart announced plans to open its first fulfillment center in Mississippi, a warehouse that will cover 1 million square feet and employ 250 permanent workers. It is set to open in spring of this year.
How many warehouses does Target have?
Target operates 49 U.S. warehouses, of which seven are for ecommerce. Of the six more distribution centers planned, none are exclusively for online orders, MWPVL says.
It’s important to keep in mind that retailers with many brick-and-mortar stores like Walmart and Target increasingly use those stores to fulfill online orders. They do that either by shipping parcels to customers’ homes from physical locations or offering shoppers the option of picking up their orders inside the store or at curbside. Target stores fulfilled more than 75% of its online orders in the retailer’s fiscal first quarter of 2021, Target reported.
Amazon fulfillment centers outnumber competitors
Several other major retailers are opening more distribution centers to improve delivery times and customer service. A prime example is online-only furniture retailer Wayfair. It, at one time, relied heavily on its 16,000 suppliers to ship the 22 million SKUs it sells directly to customers. But in recent years, Wayfair has built a network it calls CastleGate Logistics to store merchandise and ship orders. Wayfair now operates 52 distribution centers in the U.S. and four more in Europe.
Home Depot is a store-based retailer that’s building out a much larger network of warehouses, many of them designed to handle online orders.
The home improvement retailer announced in 2018 plans to invest $1 billion over five years in improving its supply chain. That included plans for an additional 150 facilities that play various roles in distributing products, including to stores and consumers, with 30 expected to open in 2022, a spokeswoman tells Digital Commerce 360.
Home Depot currently operates 130 distribution centers in the U.S., including 10 devoted to ecommerce. An unspecified “multiple” additional ecommerce facilities are scheduled to open in 2022 and 2023, the spokeswoman says.
Those ecommerce warehouses can stock up to 100,000 items—far more than the 35,000 products in an average Home Depot store, the spokeswoman says. That allows the retailer to offer a larger selection online than it does in its brick-and-mortar locations.
Home Depot also signed up to use Walmart’s new GoLocal delivery service to fulfill online orders, giving the DIY merchant another way to offer shoppers fast delivery.
Amazon is No. 1 in the 2021 Digital Commerce 360 Top 1000, a ranking of North America’s largest retailers by online sales. Walmart is No. 2, Home Depot No. 4, Target No. 6 and Wayfair No. 7.
Here is a look at the warehouse networks of some of the largest U.S. retailers:
Amazon’s decade of distribution center expansion
Amazon’s massive expansion of its distribution center network occurred over the last decade and coincided with the e-retailer starting to collect sales tax in more U.S. states. Before 2018, online retailers only had to collect sales tax in states where they had a physical presence, such as an office or warehouse. Amazon limited the states where it maintained physical facilities for many years to avoid collecting and remitting sales tax.
As recently as 2011, Amazon only collected sales tax on purchases from consumers who lived in five states—Washington, New York, Kansas, North Dakota and Kentucky—according to the Institute on Taxation and Economic Policy. That meant the online retailer only operated offices and warehouses in those states, as operating physical locations in any other state would have forced it to collect and remit sales tax in those states.
That changed with the 2018 U.S. Supreme Court ruling in a case involving Wayfair that gave states the right to require sales tax collection by online retailers, regardless of whether they had a physical presence in a given state. Amazon now collects sales tax on orders in all 45 U.S. states that have a state sales tax. And that policy change freed up Amazon to locate its distribution centers throughout the country.
Here are some noteworthy facts about Amazon’s warehouses from the BigRentz study:
- The largest Amazon warehouse is a five-story facility in Wilmington, Del. It covers 3.8 million square feet, equivalent to 66.6 football fields.
- As of April 2021, nine of the 10 largest warehouses under construction in the U.S. were for Amazon. Three that are 3.8 million square feet or larger are under construction in Detroit; Syracuse, New York; and Austin, Texas.
- Five states have no Amazon warehouses large enough to make the BigRentz list: Alaska, Hawaii, Maine, New Hampshire and Vermont.
- South Dakota ranks last in Amazon warehouse square footage, followed by Idaho and Nebraska.