One of the few knocks against online retailers is the difficulty in getting your purchase immediately, meaning people continue to go to bricks-and-mortar stores when they need to get their hands on an item right away. But it looks like Amazon could take away that advantage from its competitors by expanding the number of warehouses it has around the country.
In some major metropolitan markets, Amazon already offers same-day delivery on certain items. But the Financial Times reports that the company is looking to grow the service as it faces a seemingly inevitable federal law regarding the collection of sales tax by online retailers.
For example, one of the conditions in Amazon’s recent deal with New Jersey is the creation of a huge distribution center, one that could increase the reach and scope of same-day delivery available to customers in the densely populated Philadelphia-New York corridor.
A similar deal was reached in Texas, where Amazon will re-open a distribution center and make around $200 million worth of capital investments. Yes, this means jobs and money for the state, but it also means more streamlined distribution for the e-tailers
Amazon is also working on adding warehouses in California and Virginia, both states where it has come to agreements about collecting sales tax from customers.
Note that the states where Amazon has reached these deals, and where it is building new facilities, are among the most populous states in the country, meaning the new warehouses would be able to serve a large chunk of the company’s customers with ease.
So while retailers were celebrating the fact that Amazon will be compelled to collect taxes, they are ignoring the fact (at least publicly) that Amazon’s warehouse growth makes it easier for the company to deliver items cheaply and quickly.
“We are in a society that wants things immediately,” a book store owner tells the Financial Times about the threat she believes Amazon poses to local retailers. “When I first opened and I told people I could get a book for them tomorrow, they were shocked and pleased. Now they’ll say, ‘Is there any chance I can get it later today?’.”
Retailers around the country are pushing for a federal law requiring online businesses to collect any applicable sales tax (some states do not have a sales tax), but Amazon maintains that its prices are still lower than its competition, even when taxes are factored in.