That was a good thing for Virginia, which was not prepared to match the levels of incentives offered by New Jersey and Maryland. Instead, the Virginia Economic Development Partnership — the state economic development agency that coordinated the pitch — decided to emphasize the state's many workforce advantages. Virginia offers the best workforce in the nation, according to the CNBC America's Top States for Business study, with the nation's largest concentration of science, technology, engineering and math STEM employees.
The state also ranks No. The agency assembled a package of bids, which it says weighed 27 pounds, and shipped it off to Amazon. It included a range of locations, including Richmond, Hampton Roads and four potential locations in Northern Virginia, including Crystal City.
The company owns 6. Amazon represented a chance to jump start the company's plans to redevelop the area. But Amazon was playing its cards close to the vest. Plus, it was evaluating 20 bids from across the country—and Toronto, Canada—with a small team.
The result was that all the bidders had limited time to pitch the company. So along the way, our first meeting we had 45 minutes, our second meeting we had one day," Kelly said. At one of the meetings, Kelly brought the Amazon team to an upper floor of one of its vacant buildings in Crystal City with a view of Ronald Reagan Washington National Airport less than a mile away, and Washington, D.
Access to transportation and a location in a large metro area were also on Amazon's list of priorities. On the floor was emblazoned a map of the site, allowing the team to visualize its potential new home. Reagan National Airport is so close that the bid included a pedestrian walkway from Amazon's proposed headquarters directly to the terminal.
And while Crystal City had seen better days, it still had the makings of a vibrant community, including plenty of shops, restaurants, and easy pedestrian access. They like to be enmeshed into an urban environment. But the deciding factor for Crystal city may well have been the bid's emphasis on education. It was apparently the only bid that included a college campus right next door — Virginia Tech University was offering to build a so-called "Innovation Campus" in nearby Alexandria.
Amazon had slowly been coming to the realization that its initial hiring plans were too ambitious. The company had formulated its original request for proposals with the idea of replicating its Seattle headquarters, which houses around 48, people.
But those numbers were built up over time. Huseman said it was not a question of whether 50, skilled workers could be found in any one city. Rather, it was whether Amazon could muster the resources to hire all of them, in the same place, at essentially the same time. So in September, one year into the selection process and only about three months ahead of Amazon's self-imposed deadline, the company decided to split up the project.
With the clock ticking toward the year-end deadline, the team—including Bezos—gathered in a conference room at Amazon headquarters in Seattle to hash out the final decision. And so, we went through the pros and cons of all the 20 finalist locations," he said. The final analysis brought them to Virginia and New York. The pros involved the things that Amazon was seeking from the outset, including the ability to attract and retain talent, and infrastructure.
The cons primarily involved cost, and perhaps some potential political hurdles in New York. Finally, it was decision time: 25, employees would go to National Landing, and 25, would go to the Long Island City neighborhood of Queens, New York. The group had also been impressed with Nashville, Tennessee , because of its low costs and great quality of life, so they decided to add a 5,employee operations center there.
Long Island City was a bit of a risky choice. Like Crystal City, it has easy access to transportation and a great workforce—New York finishes in the top ten for Education, and No.
Plus, locating outside of Manhattan gave the company a foothold in a great city, but room to spread out. But New York was also not known for the "stable and business friendly environment" Amazon was seeking. The data concerning the Amazon Prime network is challenging to track and this is the best information that is currently available.
Formerly referred to as redistribution centers, the inbound cross dock network has been developed by Amazon to streamline the flow of goods into the fulfillment center network. These facilities are similar to import distribution centers in that they are used as inventory receiving, break bulk and storage buffers for overseas import containers incoming from foreign vendors. After the goods have arrived at the ports, they are received into the IXD facility and held until such time that the fulfillment center needs to be replenished with inventory.
Merchandise is aggregated into truckloads and then transported to the fulfillment center. These facilities are located near major ports to minimize inbound ground transportation expense from the port to the IXD facility. These facilities may also be used to store and replenish domestic goods. These buildings are key enablers to organizing outbound packages by region of the country and by carrier.
The purpose of these facilities is to sort packages to pallets by zip code so that they can be transfered to an Air Hub for out of region packages , or to an Amazon Delivery Station, or to the USPS post office that is responsible for the zip code.
Packages being shipped by UPS are picked up directly at the fulfillment center and do not get processed by the Amazon sortation centers for the most part. This system was introduced to the U. Sortation centers are typically, but not always, standalone buildings within the Amazon Network. Sortation centers can handle packages for a regional area on behalf of one or more fulfillment centers. A detailed listing of all Amazon Sortation Centers appears in the table below.
Amazon currently operates a network of air gateway sortation centers across the United States. These facilities are typically located very close to airports being used to fly customer packages on Amazon Prime Air flights from one region of the country to another.
At the air hub facilities, packages arrive from the nearby fulfillment center and they are placed into standard air cannisters that are loaded onto cargo planes late at night.
The planes fly from each regional airport to the centroid of the country which is in Hebron, Kentucky where there is a central package sortation hub. The main hub sorts packages out by region and the planes are then loaded with packages for each of their respective regions such that they fly home with packages that were shipped from other Amazon Fulfillment Centers in the network.
This is a hub and spoke system that is comprised of one central hub connected to 25 spokes whereby the spokes are various regional airports around the country. This is the foundation that enables Amazon to pick a customer order in Seattle and have it delivered to a customer in New York City within 1 - 2 days.
As importantly, this is how Amazon can manage national package shipments with the Amazon Logistics platform rather than relying on UPS for FedEx for some but not all of their domestic shipping volume. As time goes by, Amazon is building out their Air Hub and Delivery Station networks to enable significantly increasing shipping volumes to be managed by Amazon rather than by third party carriers and needless to say, at a lower operating expense.
This massive logistics network is unique to Amazon in the sense that no other retailer in the world has developed such a concept quite simply because no other retailer has the scale to cost-effectively accomplish this logistics system.
Looking ahead, without doubt, Amazon will build out a similar hub and spoke air network in Europe and the main hub will likely be located in the epicenter of the continent e. This will enable a customer in Spain to receive an order picked in the United Kingdom within 24 - 48 hours of order placement. Looking further ahead, the connection of multiple air hubs will be next such that global markets can be connected and Amazon customers will be able to order products from other continents.
Air Gateway facilities appears in the table below. In late , Amazon launched a build-out of its delivery station distribution network for small packages consisting of smaller facilities that are typically in the , to , sq.
We now break those facilities out into their own data table below this one. These last mile delivery facilities are designed to service a mile radius and they are typically positioned within larger metropolitan cities across the country although this is starting to change as these facilities are now being opened up in smaller market areas. The delivery station's primary role is to sort packages for outbound routes to enable last mile delivery to customers within a tightly defined urban area.
Often deliveries are performed by Amazon Delivery Service Partners with the Amazon Sprinter vans or by multiple local courier companies that are contracted by Amazon to service specific routes though this appears to be less prevalent in the U. The data concerning this network is challenging to track so we provide the best information available within the table below. We now break those facilities out within the table below. Amazon's fulfillment network strategy is interesting because it does not necessarily reflect an optimized distribution network in terms of serving the U.
Until , fulfillment center locations in the U. Sales taxation laws vary from state to state within the country and since we are not experts on this topic, we thought it best to click here for more information on this topic. In short, Amazon sells most of its merchandise through fulfillment centers which are not technically classified as retail stores. As such, the company is technically within the letter of the law to not charge sales tax to consumers with the exception of five states. Currently 28 states have introduced Internet sales tax legislation that is already on the books with more states expected to follow shortly.
In the years leading up to , Amazon invested significant capital into facilities in Arizona, Tennessee, Pennsylvania, Kentucky, Indiana, Delaware, South Carolina and Virginia - all states that made tax collection deals with Amazon in exchange for agreements to guaranteed job creation targets over time. Ultimately, Amazon stopped fighting the sales tax war as it was inevitable that its competitive tax advantage was not going to last forever.
Today, Amazon collects taxes from Texas, California, New York and Florida and this will eventually apply to most states across the country. After all of the tax deals go into effect, Amazon will essentially be collecting sales taxes from the majority of American consumers.
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