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Small warehouses in big cities still cost a lot of money. Land is expensive in big cities, and even small warehouses are pretty large. Warehouses -- even smal

Small warehouses in big cities still cost a lot of money. Land is expensive in big cities, and even small warehouses are pretty large. Warehouses -- even small ones -- also need to be able to take goods IN. They need truck-accessible streets, loading docks, and they need staff who store, and then pick/pack/ship your goods. Small warehouses that handle high-turnover goods need even more staff, since they need to constantly replenish themselves (since they're small, and can't just take a hundred thousand units in once a month, and since we're stipulating that the goods are high-turnover and leave the warehouse quickly). It's expensive. Amazon has wonderful warehousing and distribution, which only goes to show that they aren't actually naïve about how expensive it is. Which goes to show that the drone delivery thing was a publicity stunt. Too small a warehouse, and you don't deliver the customer satisfaction that is presumably the point of a drone delivery, because a trivial number of goods actually get delivered to customers. (Especially since we're talking very small goods in the first place).

InclinedPlane 13y ago
> Small warehouses in big cities still cost a lot of money. Land is expensive in big cities, and even small warehouses are pretty large. They don't have to be downtown. Regardless, you're thinking about this the wrong way. As a service that must serve everyone and deliver everything instead of as an opportunistic service, which is a smarter way to approach the problem from a business perspective. Amazon already has warehouses, fulfillment centers, in several major metro areas. Let me state that again, because it's hugely important. Amazon already has warehouses in some cities. They have to have their FCs somewhere, and the places where they are, like Seattle, already have a comparative advantage when it comes to fulfillment of commonly stocked items. This changes the problem dramatically. It transforms it from: buy high priced land in major cities, build FCs there, set up drone operations; to: set up drone operations in a few cities where you already have large, well stocked warehouses, and then pilot the program opportunistically in those cities. Then expand the program to other cities depending on how successful and profitable the pilot program turns out to be. This is business 101, you leverage what you've already got to mitigate risk and reduce development and acquisition costs.
Spooky23 13y ago
We have these things called "highways" that let us do this. Seriously though, every retailer has figured out this problem. Drive around in Brooklyn, Queens and the Newark area and you'll see hundreds (if not thousands) of working warehouses. Hell, the New Jersey turnpike feels like a corridor in the middle of a giant warehouse. In my city, a fruit and vegetable distribution place setup a small warehouse for restaurant deliveries about 5 blocks from the central business district. It added a little cost, but now he can deliver a case of fruit to a restaurant in like 20 minutes vs. 90.
kenrikm 13y ago
I would like to point out that all retail stores really are "small warehouses" with registers to handle purchases. 1) It's not that expensive to send a Semi filled with goods several times a day to a small warehouse, again that's the norm.. not the exception in retail. 2) Packages are already being delivered from "small warehouses" with all Amazon orders - every city has UPS/Fedex/USPS distribution warehouses that split the big trucks into smaller trucks that then drive to you. Amazon is trying to use the drones to replace the delivery drivers. Compromise that's doable with today's tech - Amazon could utilize a network of Amazon Lockers in outdoor public places and have the drones deliver the packages to an opening in the top of the locker which the locker then takes and loads into the right slot. The customers can then pickup the packages at their leisure like any other Amazon Locker. The drones would not need to deliver to every location, just the preset lockers which would be in areas with safe and easy access for the drones.
RandallBrown 13y ago
Land is expensive. In Seattle, they already own a ton of land downtown. Not an issue there. In other cities I doubt it would be too hard to find some buildings that would let them put a shipping container on the roof stocked with some essentials for a reasonable fee. Stocking stores is a solved problem in big cities. I don't expect a drone warehouse to carry more than a typical drugstore. They could even partner with local stores for order fulfillment. Remember, this doesn't have to scale out to all places and all items immediately. This could just start off as a way for tech hipsters in Seattle to order condoms on demand. If it becomes successful, they'll build it out as they need to.

InclinedPlane 13y ago

> Small warehouses in big cities still cost a lot of money. Land is expensive in big cities, and even small warehouses are pretty large. They don't have to be downtown. Regardless, you're thinking about this the wrong way. As a service that must serve everyone and deliver everything instead of as an opportunistic service, which is a smarter way to approach the problem from a business perspective. Amazon already has warehouses, fulfillment centers, in several major metro areas. Let me state that again, because it's hugely important. Amazon already has warehouses in some cities. They have to have their FCs somewhere, and the places where they are, like Seattle, already have a comparative advantage when it comes to fulfillment of commonly stocked items. This changes the problem dramatically. It transforms it from: buy high priced land in major cities, build FCs there, set up drone operations; to: set up drone operations in a few cities where you already have large, well stocked warehouses, and then pilot the program opportunistically in those cities. Then expand the program to other cities depending on how successful and profitable the pilot program turns out to be. This is business 101, you leverage what you've already got to mitigate risk and reduce development and acquisition costs.

Spooky23 13y ago

We have these things called "highways" that let us do this. Seriously though, every retailer has figured out this problem. Drive around in Brooklyn, Queens and the Newark area and you'll see hundreds (if not thousands) of working warehouses. Hell, the New Jersey turnpike feels like a corridor in the middle of a giant warehouse. In my city, a fruit and vegetable distribution place setup a small warehouse for restaurant deliveries about 5 blocks from the central business district. It added a little cost, but now he can deliver a case of fruit to a restaurant in like 20 minutes vs. 90.

kenrikm 13y ago

I would like to point out that all retail stores really are "small warehouses" with registers to handle purchases. 1) It's not that expensive to send a Semi filled with goods several times a day to a small warehouse, again that's the norm.. not the exception in retail. 2) Packages are already being delivered from "small warehouses" with all Amazon orders - every city has UPS/Fedex/USPS distribution warehouses that split the big trucks into smaller trucks that then drive to you. Amazon is trying to use the drones to replace the delivery drivers. Compromise that's doable with today's tech - Amazon could utilize a network of Amazon Lockers in outdoor public places and have the drones deliver the packages to an opening in the top of the locker which the locker then takes and loads into the right slot. The customers can then pickup the packages at their leisure like any other Amazon Locker. The drones would not need to deliver to every location, just the preset lockers which would be in areas with safe and easy access for the drones.

RandallBrown 13y ago

Land is expensive. In Seattle, they already own a ton of land downtown. Not an issue there. In other cities I doubt it would be too hard to find some buildings that would let them put a shipping container on the roof stocked with some essentials for a reasonable fee. Stocking stores is a solved problem in big cities. I don't expect a drone warehouse to carry more than a typical drugstore. They could even partner with local stores for order fulfillment. Remember, this doesn't have to scale out to all places and all items immediately. This could just start off as a way for tech hipsters in Seattle to order condoms on demand. If it becomes successful, they'll build it out as they need to.