Amazon.com announced last week that it will lease an enormous distribution center in Coffeyville, Kans., a move that will lessen the company's reliance on outside wholesalers.
With the new center -- a 460,000-sq.-ft. space that will be converted into 750,000 sq. ft. -- Amazon will double its existing capacity. This marks the third time in 18 months the company has at least doubled its distribution space: in late 1997, it opened a 200,000-sq.-ft. warehouse in New Castle, Del. (bringing the total to roughly 300,000 sq. ft.); and late last year it announced the leasing of a 320,000-sq.-ft. space in Fernley, Nev.; now it has trumped its own gargantuan achievement with the 750,000-sq.-ft. Kansas warehouse.
The distribution center, which should open in the second half of 1999, will generate about 500 jobs and will house "books, CDs, videos and other products," according to Amazon. This is not likely to be Amazon's last distribution move. "We will continue to build out our distribution infrastructure," Amazon.com spokesman Bill Curry told PW, adding, "It's a big country."
Amazon stressed as early as 1997 that it intended to expand its warehousing capabilities. Since the B&N-Ingram deal was announced, Amazon.com's dependence on Ingram has dropped from nearly 60% of its book inventory to 40%, and should sink even more with the Kansas land grab. Ingram is reported to have a distribution capability in excess of two million square feet, slightly more than the 1.5 million Amazon will have when the expansion is complete.
The new warehouse in Kansas will allow the company to cut delivery time to places such as Chicago, St. Louis, Dallas and Minneapolis.
Amazon's new warehouse was formerly owned by Golden Books, which sold it in January for $2.2 million to a local real estate developer.
Amazon has moved quickly to increase its presence in the auction market. Just weeks after announcing the launch of its own service, the company has agreed to acquire LiveBid.com. Founded in 1996, LiveBid provides live-event auctions on the Internet.