Amazon Plans 4th California Retail Distribution Facility - InformationWeek

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10/30/2013
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Amazon Plans 4th California Retail Distribution Facility

Online retail giant seeks to foster faster deliveries, including same-day fresh groceries, through modern fulfillment centers.

One sign of how rapidly Amazon.com is building out its retail presence is its announcement of its fourth California distribution facility. Amazon has seven distribution center projects underway, on top of 20 existing facilities, according to its third-quarter earnings report Oct. 24.

Amazon plans to build a 1.2-million-square-foot fulfillment facility in Moreno Valley, a southern California community about 40 miles inland from the heart of Los Angeles and less than 10 miles south of an existing 1-million-square-foot Amazon distribution center in San Bernardino. The new center, slated to employ 1,000 workers, was announced at the first year anniversary celebration of the San Bernardino site.

California Gov. Jerry Brown attended the San San Bernardino celebration Tuesday, following a prolonged disagreement with Amazon.com over payment of California's 7.25% sales tax. Amazon agreed to pay both state and local sales taxes starting Sept. 15, 2012. Amazon has agreed to collect sales taxes in several other populous states in which it has built fulfillment centers, such as Wisconsin and Illinois, although discussions remain underway in others.

"The innovative spirit of Amazon fits well with the creative and entrepreneurial environment in California," Brown said at the event, according to the San Francisco Chronicle.

[ Want to learn more about Amazon's cloud business? See Amazon Web Services Revenues: New Details. ]

Amazon also operates two distribution centers near the San Francisco Bay Area, in Tracy and Patterson, Calif.

It rents research and development space, called Lab126, in Cupertino, Calif., part of the Silicon Valley, not far from Apple headquarters, where it designs its Kindle and Kindle Fire tablets. It's leased 580,000 square feet of additional space for Lab126 in the Moffett Towers in Sunnyvale, Calif.

In San Francisco, it's leased 148,000 square feet of office space in the Financial District, where its music division and Amazon Advertising are located.

Part of the build out of distribution centers is tied to Amazon.com's plans to offer same-day delivery of fresh groceries in key markets. The Chronicle reported that Amazon is advertising for a program manager for Amazon's Fresh Quality Control unit at the Tracy facility. No announcement has been made, but Amazon may be planning fresh grocery delivery to L.A. and Bay Area communities in the near future.

Amazon also operates eight distribution centers in Germany, its second largest market, but experienced labor troubles at two of them in August and September. German workers were dismayed that Amazon management opposed their attempt to organize. Amazon employs nearly 9,000 people in Germany. Two additional centers serving Eastern Europe are slated to open in the Czech Republic next year.

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