Amazon’s Same-Day Delivery Could Make Bricks-And-Mortar Retailers Even More Irrelevant

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.

Amazon finds upside to sales tax payment [FT.com (registration required) via SeattlePI.com)

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  1. rlmiller007 says:

    I’m just outside Seattle where Amazon is located. How come we don’t get same day delivery here?

    • dorianh49 says:

      Nobody gets it yet. The article is speculation about what Amazon might do in the near future.

      • dorianh49 says:

        Never mind. I guess some metropolitan markets do get it right now. Coming soon, then! ;)

    • Nick1693 says:

      You might actually be eligible for it. Check here: http://fresh.amazon.com/

    • Rompcat says:

      Because you’re OUTSIDE Seattle! I’m in Seattle, and we can get same-day delivery on many items. Hell, I’ve ordered something and gotten it four hours later. You can also get things on AmazonFresh in a few hours as well — I’m talking regular items and not just groceries.

      See if AmazonFresh delivers to your just-outside Seattle residence, rlmiller007!

  2. keith4298 says:

    Great – we can get a few million extra in taxes and pay a few BILLION extra in unemployment when Amazon knocks out all the local competition!

    • Loias supports harsher punishments against corporations says:

      In order to actually perform same-day delivery, Amazon needs various warehouses across the country. So in order to do this, they would have to employ people in your area.

      Jobs won’t be lost, they will be shifted to a new employer.

      • Blueskylaw says:

        Jobs will be lost at many levels since much of
        their warehouse operations are highly automated.

      • Vermont2US says:

        I’d be willing to bet that far more LOCAL jobs would be lost, compared to the number of jobs created in warehousing and delivery.

    • You Can Call Me Al(isa) says:

      The following statement has been edited.

      “Great – we can get a few million extra in taxes and pay a few BILLION extra in unemployment when [Netflix and Redbox] knocks out all the local [video store] competition!”

      Were you also worried about all the Blockbuster employees that were going to lose jobs when streaming videos and kiosks became popular?

      Sometimes change is good. People vote with their wallets. If they want to be able to sit at home and have things delivered to them that’s where the growth is going to happen.

    • Phred says:

      Whose job is it to prop up local retailers who are using an outdated business model? Times change, technology changes, and people change. Competition changes. These days, when every dollar counts (for me, at least), I spend my money where I get the most value. If that’s a local retailer, fine and dandy. But if it’s not, that’s fine and dandy, too. My wife does 90% of our grocery shopping at Wal-Mart even though there is a store from a locally-owned grocery chain that’s right around the corner, and the reason is that she saves money that we can then spend elsewhere. There’s no sin in that.

      • JJFIII says:

        And when that local guy is out of business and your home value turns to shit because the unemployment rate is so high, and the average wage int he market goes to a Wal Mart level employee, do not come bitching about going from making say 415 an hour to $10 an hour. Of course, the other thing you forget in the entire thing is Wal Mart will jack up certain items to make more money on those items than a local guy can do, because most people do not have the time or desire to shop on multiple places. So kill your community. the Waltons love that. their property taxes will go down to and you can still buy shitty products.

    • Ablinkin says:

      So do we need more regulation? We all root for the little guy business’s, but once they start becoming extremely successful and start expanding, they become the enemy of the left.

    • Cerne says:

      Maybe try learning some basic economics before you make this kind of comment? Or are you still upset that all those poor buggy makers are out of business because Mr. Ford maybe horseless wagons available to the common man?

  3. Lars2112 says:

    I just hope they don’t use laser ship to make the delivers here in D.C., when we have paid for next day delivery from Amazon our packages twice now have arrived after 10:30PM. One time they even left it in the rain.

    • CalicoGal says:

      Yeah, LASERSHIP and A1 have disappointed me at times. One time the A1 guy left us someone else’s package and then marked ours as “delivered.”

      And I hate that they use POVs, can be disconcerting to see a strange car SPEED up the driveway…

      • icerabbit says:

        From my POV I’m only familiar with ROVs; so are POVs non-ROVs?

        ;)

        I agree it is very disconcerting to see strangers run away from your house to an unknown unmarked vehicle and speed away.

        Years ago, at our previous house, I complained to the utility company about their meter readers walking through all our neighbor’s back yards from house to house, without any uniform or identifiable piece of clothing. I caught a glimpse of someone near the back of our house who went on to the neighbors house … ran outside with the cordless phone in hand ready to call 911 with a description of a possible burglar and then spotted a vehicle from the utility company at the end of the street parked in a neighbor’s driveway … right … meter reading day.

        Then on top of that meter readers and delivery people can be using a personal vehicle, not the standard company truck with logos etc.

        • Brad Ackerman says:

          POV == Privately-Owned Vehicle — as opposed to GOV (Government-Owned Vehicle). It’s DoD-speak.

    • TinaBringMeTheAx says:

      Lasership is horrible, and they are liars. They routinely claim my office was closed when they attempted delivery when it was, in fact, open and fully staffed.

      I have complained to Amazon numerous times and provided absolute proof that Lasership lies about completed deliveries, but they still use them. They must be awfully inexpensive.

  4. Torgonius wants an edit button says:

    Will the cost of same day shipping make the total price of the item more than what I can pay for it if I go get it myself?

    • Blueskylaw says:

      Wait a second – what’s that I hear? A question that was avoided? You can bet your
      sweet bippy that they will charge for it and it will actually produce good revenue for them.

    • who? says:

      It’s very possible that the total price will be more than what you pay if you go get it yourself. That isn’t the point. It’s about convenience and immediacy. A lot of people pay $79/year for the “free” 2 day shipping, when they could get free slower shipping by just waiting until they had $25 worth of stuff to order.

      Assuming it’s something like $7.99 per item with a Prime membership, we’d use this at work all the time. It’s way cheaper than paying a $30/hour employee out to the store for something.

      • Torgonius wants an edit button says:

        I get that. If it’s still less expensive for me to have it shipped same day than I could spend going to the store to buy it myself, then ship on! And for businesses that need that kind of just-in-time supply sourcing, they will most likely set up an arrangement.

        But for me, if I need it now, and it’s less for me to go get it myself, that’s what I’m going to do. If it can wait for next day or 2nd day shipping, then that’s cool, too. I’ll have it shipped.

  5. Loias supports harsher punishments against corporations says:

    15 years down the line, I see Amazon becoming the 3rd domestic private shipping carrier, along with UPS and FedEx.

    The US needs a 3rd option, and Amazon would be smart to try to usurp them.

  6. Blueskylaw says:

    I can finally satisfy my constant demand for number 2 pencils without
    leaving the comfort and convenience of my small, dark closet.

  7. crispyduck13 says:

    Good cuz I’m gonna need that $7 copy of ‘Fifty Shades of Grey’ by tonight, got a book club meeting tomorrow.

  8. mannyvel says:

    Amazon will be seen as the new Wal-Mart. They already are like Wal-Mart, but still have a non-Wal-Mart reputation for some reason.

    • crispyduck13 says:

      I don’t understand how you got to those conclusions.

      • Torgonius wants an edit button says:

        They have almost everything, and the prices are generally lower .. very Walmart-ish.

        They still provide service, however, which keeps them above the ranks of Wally World.

        • frank64 says:

          I always wondered why people believe in order to be human you need to hate Walmart(especially here), but Amazon is often praised. Amazon does almost everything Walmart does. I actually buy most everything from Amazon and have a Kindle. I am concerned with what happens when Amazon knocks a few more businesses out. I have read they can be real ruthless. I have seen indications that they are less consumer friendly with the Kindle than Barnes and Noble is with the Nook in a few important areas.

  9. Chuft-Captain says:

    I know I was shocked when my last delivery showed up. I ordered online, like always, with the free Super Saver shipping. The next day after it shipped, BAM, ratty looking van pulls up with some low-end courier service markings stenciled, and a nice man hops out and hands me my order. I still can’t fathom how that courier could possibly cost less than USPS or FedEx Smartpost.

  10. speaky2k says:

    Interesting, I live less than 10 miles from an Amazon warehouse, and have gotten things delivered from that warehouse (at least based on tracking information). However it always takes at least 2 days with the free shipping after the item is picked (which can take 2 days as well). Day 1 it leaves the warehouse and goes to the distribution hub, then it goes to the local hub which is in a different building for some reason. Then on day 2 it is on a local truck and delivered to my house.
    If they allowed pick-up at the warehouse (for no cost or the same as the cheapest shipping of course), I would love it, the 10 miles is from my house, but it is only 2 miles from where I work, so I could pick it up at lunch or at the end of the day.

    • who? says:

      I live in a different state from the nearest warehouse, but my Amazon Prime “2 day” deliveries have pretty consistently been showing up in one day. Before I had Prime, the slow-boat free shipping would take somewhere between 5 and 10 days.

      Sometimes I wonder if they do that on purpose to push people into Prime.

      • frank64 says:

        Before I had Prime I would usually get things in 3 days, sometimes even two. The email would say it would take 5-10 days, but it was mostly always much earlier. To me Prime isn’t really worth it, I really like the 2 day shipping, but is really worth $80 for getting things a little earlier? I only got it because it was free the first year as a student, last year it was $49 as a student. Now it might be worth it for the free Kindle book a month and the free streaming.

  11. HogwartsProfessor says:

    With the standard shipping, I still usually get stuff before expected. Even with third-party shippers, this seems to be the case. I only order from the ones with really high ratings, and I don’t know if that makes a difference…

    Would be nice to get everything delivered, but if I’m at work, I’m not home to receive it and I don’t trust half my neighborhood anymore. Also, I like going to the grocery store.

  12. 12vAdapters.com says:

    I believe that there is so much things involved into the experience of buying something on a local store that no price or readiness to deliver will be able to overcome it.

    Over the internet it’s impossible to reproduce the smell of a store, for instance.

    By the way, I work for an online store that sells 12v power adapters! :-D

  13. theblackdog says:

    Didn’t Amazon offer a service like this in New York City a while ago?

    • mobilephonebill says:

      This was also attempted with Peapod for groceries and dry cleaning. Added about 15-20% to the shopping trip – Amazon’s advantage (lower prices) gone. For 20% more, most of us would get off our BFA’s and actually go shopping.

      This is a fabulous idea for the infirm or disabled, and should supported wholeheartedly.

  14. Cerne says:

    There’s a really weird slant to this article. Customers will be able to get their purchases quicker? OH NO!

  15. dush says:

    The local retailer isn’t going to be happy when they find there is basically an Amazon store down the street that people don’t have to leave their home to buy stuff from.

  16. SharkD says:

    To this day, I still miss Kozmo.com

  17. mobilephonebill says:

    Most of the commentary seems to be centered around lost jobs at retail, however, the business model for same day delivery requires warehouses, delivery trucks, air freight and truck freight to fill the warehouses and deliver the packages – inventory value will climb, turnover will get smaller, people cost goes up. They might require the manufacturers to consign the inventory or subsidize the increased cost in which case they will have to raise their prices to all of you. This is overhead and is expensive making the reason most of you shopping at Amazon (inexpensive commoditized products) moot.

    Perhaps a more feasible solution for Amazon is to partner or even acquire Radio Shack and revamp 8,000 stores to become Amazon showrooms (perfect footprint) – bang, zoom they are just like every other retailer. At $4/share it’s a bargain…