Dive Brief:
- The first item shipped from Amazon's new 1- million-square-foot warehouse in Livonia, Michigan was for custom-fit floor liners for a car, the Detroit Free Press reported last week.
- The warehouse employs about 1,000 workers, and specializes in shipping larger items such as household decor, sports equipment, and garden tools within the Midwest.
- The newest warehouse is part of Amazon's plan to add a cluster of large and small distribution centers in southeast Michigan in order to sell more Prime subscriptions in the area, plus reduce shipping time.
Dive Insight:
Bulk, heavy and oversized shippers are next on the list of industries the e-commerce marketplace seeks to disrupt.
Amazon has recently sought to expand the type and scale of products it can ship, building handling flexibility into its logistics network. Amazon's Seller Flex initiative is indicative of that strategy, as it provides the e-tailer grater control over where, when and how vendor products are shipped — and subsequently frees up warehouse space. The company also recently made the switch to apply the same return rules for seller items not shipped from one of its fulfillment centers: if items are too bulky, buyers are simply credited with a return.
However, if Amazon is to take control of shipping a greater variety of products it needs to be able to handle them, too. The new warehouse will test Amazon's handling expertise in a market with high demand for oversized items.
Items such as patio sets, large rugs, and furniture of size are more likely to be sought out by those living in a more spacious environment. Additionally, shortening delivery time by adding warehouses allows more direct competition with furniture companies such as IKEA and Wayfair (items from which often appear on the Walmart website).
It may be a plunge into a new market, but that's one of Amazon's strategic specialties.
