The office supplies retailer say it sacrificed some sales to improve online profitability. It also redesigned its business-facing e-commerce site, StaplesAdvantage.com.
The facility will cover 1 million square feet and handle such small items as books, electronics and consumer goods.
One distribution center for small items is apparently not enough to handle Amazon.com Inc. demand from the Seattle area. The big e-retailer announced today it is opening a second, similar fulfillment facility nearby.
The new distribution will be in Kent, WA, south of Seattle, and will cover 1 million square feet. The existing facility for handling items small enough to put on a conveyor belt, in Sumner, WA, is only 500,000 square feet, according to logistics and consulting firm MWPVL International Inc.
“Amazon is moving rapidly to putting fulfillment centers in the backyards of the top 40 cities in the U.S., and Seattle is one of those markets,” says Marc Wulfraat, MWPVL’s president. “Apparently the half-million square-foot facility at Sumner is insufficient, so they have to add this facility.”
Amazon, No. 1 in the Internet Retailer Top 500 Guide, operates 40 distribution centers in the U.S. and 96 worldwide, an Amazon spokeswoman says. The U.S. facilities have a storage capacity of more than 100 million cubic feet.
MWPVL says Amazon plans to add in 2014 10 fulfillment centers totaling 9.2 million square feet in North America and eight warehouses covering 6.2 million square feet outside of North America.
For years, Amazon only put distribution centers into states where it already collected sales tax, as a physical presence would require it to collect sales tax under U.S. law. Now that Amazon has switched sides and backs a federal law requiring online retailers to collect sales tax, regardless of whether they have a physical presence in the state, the e-retailer is focusing on putting distribution centers close to major cities, Wulfraat says. That enables Amazon to deliver goods quickly at low cost.
As it grows its network of fulfillment centers Amazon has been collecting sales tax in more states, and by last fall was charging sales tax to more than half the U.S. population.
The new Kent facility will be Amazon’s fourth in Washington state. Besides the one at Sumner, there is one at DuPont under construction that will handle large items that can’t be put on a conveyor belt, such as canoes and TV sets; another facility in Bellevue ships groceries, MWPVL says.
Amazon says it will employ hundreds of workers at the Kent facility. IDS Real Estate Group and Clarion Partners are building the distribution center in a joint venture.