Amazon Fulfillment Centers
Picture credit: https://www.ibm.com/developerworks/community/blogs/025bf606-020a-48e9-89bf-99adda13e9b1/entry/how_does_online_shopping_affect_the_physical_retails?lang=en
An Introduction about AFmazon
Anybody who took upon themselves the Herculean task of describing Amazon would soon run out of superlatives. “Vast” or “transformative” would do nothing more than serve as starting points when you consider the extent to which Amazon has changed the way we shop. Even people who live in remote areas can go on line and purchase pretty much anything their credit card will allow. And that might be one reason why Amazon has proved immensely profitable. It earned $161.15 billion in revenues during 2016 and by the end of 2017 it had $24.31 billion in cash reserves, a near record for a publicly traded company.
Does Amazon destroy small businesses?
But not everybody views Amazon's vastness and profitability in positive terms; some consider Amazon, with its great reach, to be a serious threat. A survey conducted by the Institute for Local Self Reliance queried 3,000 business owners from around the country and concluded that fully seventy percent of the respondents listed competition from on line realtors as being their greatest challenge. And realtors have often bemoaned the fact that customers walk around their store with mobile devices in hand, doing some fast price checking as they compare the cost of items marketed in that business with those sold over Amazon.
A glance at what has happened to book sellers will make clear the fact that merchants have good reason to fear competition from Amazon. During 2014, 40 percent of all new books were sold through Amazon with that figure representing a steep increase from 12 percent (of all new books) only five years earlier. As Amazon gained an increasing share of that market not only small independent book stores but also large chains such as Borders or Barnes and Noble were humbled. Toys “R” Us, a retailer with an international presence, recently closed many of its American stores; its collapse has been attributed, at least in part, to competition from Amazon.
And a report published by the Institute for Local Self-Reliance takes this dialogue a step further. It notes that when (small) local businesses fall victim to competition from Amazon and other on line retailers, these enterprises are not the only ones that suffer. Rather, the social structure of the entire community begins to fray as shopping becomes a solitary pursuit rather than an excursion into the neighborhood during which one mingles with neighbors and store employees/owners. And local communities suffer in other ways when people shop on line instead of in local stores. They lose tax revenue, with these loses being estimated at $205 million during 2015.
Yet, depite all these arguments to the contrary, many observers Amazon can greatly benefit small businesses and in turn their communities if they can somehow manage to harness its immense potential. This online realtor currently has 130 million global customers to whom businesses can market their wares. And clever entrepreneurs can learn to mix and match. They can attract customers to their brick and mortar stores by offering them personalized service and also sell their wares over Amazon. As the saying goes, if you cannot beat them join them.
Amazon Fulfillment Centers
As might be expected from the fact it enjoys an extraordinarily wide reach, Amazon has customers who live virtually everywhere within the United States and it prides itself upon delivering orders to them in a matter of days. Working to keep the flow moving, it has established a string of fulfillment centers which process purchases for delivery; they dot virtually all corners of the American landscape. During October, 2016 it was predicted that 100,000 jobs would be created in these facilities over the next 18 months. At that point, Amazon had 105 centers that were already operational and 35 more were in the planning stages.
picture credit: http://www.businessinsider.com/photos-amazon-distribution-warehouses-and-operations-2014-3
A Positive View
Some observers have claimed that these centers provide a welcomed boost – a stronger tax base - for cities that were once thriving manufacturing centers but have recently fallen upon hard times. And they, likewise, maintain that on a more personal level these centers benefit people who might be unemployed if they did not find work in one of these facilities.
These articles articulate those sentiments:
Amazon fulfillment centers could have big impact in central Ohio. workforce.ohio, 13 July, 2016. http://workforce.ohio.gov/News-and-Updates/ArticleID/57 . 19 March, 2018.
Mack, Eric. "Here Are the 12 Cities Where You Could Be Hired on the Spot for a Job With Amazon." inc, 27 July, 2017. https://www.inc.com/eric-mack/amazon-will-hire-thousands-of-people-on-the-spot-i.html. Accessed 19 March, 2018.
O'Connor, Kevin. "Could Amazon's success in Nashua, N.H., foreshadow the future in Fall River?” heraldnews, 11 March, 2016. http://www.heraldnews.com/article/20160311/NEWS/160319153. Accessed 19 Dec., 2017.
Popken, Ben. "Fulfillment Center Warehouse Jobs Give New Life to Sleepy Towns." nbcnews, 26 Jul 2017. https://www.nbcnews.com/business/economy/fulfillment-center-warehouse-jobs-give-new-life-sleepy-towns-n785241. Accessed 19 Dec., 2017.
Roger, Philips. "Amazon bringing facility, 1,000 jobs to Stockton." recordnet, 22 August, 2017.http://www.recordnet.com/news/20170822/amazon-bringing-facility-1000-jobs-to-stockton/2.19 Dec., 2017.
Siddharth Cavale. "Amazon will hire 120,000 workers in the US for the holiday season this year." businessinsider, 12 Oct., 2017. http://www.businessinsider.com/r-amazon-to-hire-120000-workers-in-the-us-for-holiday-season-2017-10. Accessed 19 Dec., 2017.
Silva-Braga, Brook. "Amazon Hires 120,000 Seasonal Employees, Some as Part of CamperForce." ozarksfirst, 22 Dec., 2017, http://www.ozarksfirst.com/news/amazon-hires-120000-seasonal-employees-some-as-part-of-camperforce/886605428. Accessed 24 Dec., 2017.
Soper, Spencer."Amazon Is a Lifeline for Retail Workers (If They Live in the Right City)." bloomberg, 20 Sept., 2017. https://www.bloomberg.com/news/articles/2017-09-20/amazon-is-a-lifeline-for-retail-workers-if-they-live-in-the-right-city. Accessed 19 Dec., 2017.
Zaveri, Paayal, Aditi Roy. "A new industry is beginning to thrive in rural America, with Amazon leading the way." cnbc, 15 July 2017. https://www.cnbc.com/2017/07/15/amazon-other-fulfillment-centers-helping-towns-like-tracy-california.html. Accessed 19 Dec., 2017.
These articles present the fulfillment centers in a positive light because they are technologically advanced, serving as a model for other companies to upgrade their facilities.
Hinchliffe, Emma. "Amazon follows Google, Apple with commitment to solar energy." mashable, 2 March, 2017. http://mashable.com/2017/03/02/amazon-solar-panels-fulfillment-centers/#7NbG6rdLRkq3. Accessed 19 Dec., 2017.
Metz, Cade. "FedEx Follows Amazon Into the Robotic Future." nytimes. 18 March, 2018. https://www.nytimes.com/2018/03/18/technology/fedex-robots.html?hpw&rref=business&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well. Accessed 10 March, 2018.
"Robots do most of the work at Amazon fulfillment centers." wtvr, 6 Oct., 2017. http://wtvr.com/2016/10/06/robots-amazon-fulfillment-centers/. Accessed 19, 2017.
Weise, Elizabeth. "Inside one of Amazon's robot-driven fulfillment centers on Cyber Monday." usatoday, 30 Nov., 2015. https://www.usatoday.com/story/tech/2015/11/30/amazon-fulfillment-centers-hopping-cyber-monday-tracy-california-black-friday-shipping-chirstmas-shopping/76585376/ . Accessed 19 Dec., 2017.
Wohlsen, Marcus. "A Rare Peek Inside Amazon's Massive Wish-Fulfilling Machine." wired,18 June 2014. https://www.wired.com/2014/06/inside-amazon-warehouse/. Accessed 19 Dec., 2017.
A More Skeptical View
Many critics have maintained that Amazon has prospered by placing technology and profits above human concerns; the work environment in its Seattle headquarters has been described as being brutal. These articles speak to that point.
Kantor, Jodi and David Streitfeld. "Inside Amazon: Wrestling Big Ideas in a Bruising Workplace." nytimes, 15 August, 2015. https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html. Accessed 19 Dec., 2017.
Martinez, Amy and Kristi Heim, "Amazon a virtual no-show in hometown philanthropy." seattletimes, 31 March, 2012, https://www.seattletimes.com/business/amazon-a-virtual-no-show-in-hometown-philanthropy/ . Accessed 19 Dec., 2017.
Scott, Ryan. "What Amazon Work Culture Tells Us About Employee Disengagement." forbes, 21 August, 2015. https://www.forbes.com/sites/causeintegration/2015/08/21/what-amazons-work-culture-tells-us-about-employee-disengagement/#6cd64a454f00. Accessed 19 Dec., 2017.
Wingfield, Nick. "How Amazon Benefits From Losing Cities' HQ2 Bid." nytimes, 28 Jan., 2018. https://www.nytimes.com/2018/01/28/technology/side-benefit-to-amazons-headquarters-contest-local-expertise.html. Accessed 2 Feb., 2018.
Wingfield, Nick. "Inside Amazon Go, a Store of the Future." nytimes, 21 Jan., 2018. https://www.nytimes.com/2018/01/21/technology/inside-amazon-go-a-store-of-the-future.html . Accessed 10 March, 2018.
Wingfield, Nick and Nellie Bowles. "Jeff Bezos, Mr. Amazon, Steps Out." nytimes, 12 Jan., 2018. https://www.nytimes.com/2018/01/12/technology/jeff-bezos-amazon.html. Accessed 2 Feb., 2018.
Wingfield, Nick and Brian X. Chen. Amazon and Apple Gush Over Holiday Sales." nytimes, 1 Feb., 2018. https://www.nytimes.com/2018/02/01/technology/amazon-apple-holiday-sales.html . Accessed 2 Feb., 2018.
These articles maintain that the environment in Amazon fulfillment centers mirrors the (brutal) enviroment that prevails in its headquarters.
D'Onfro, Jillian and Madeline Stone. "See what it's like inside Amazon's massive warehouses." businessinsider, 17 August, 2015. http://www.businessinsider.com/what-its-like-in-amazons-massive-warehouses-fulfillment-centers-2014-11. Accessed19 Dec., 2017.
Glover, Mark. "Amazon workers sue, claiming denied overtime pay, rest breaks." sacbee, 30 Nov, 2017.http://www.sacbee.com/news/business/article187336243.html. Accessed 19 Dec., 2017.
Green, Dennis. "A new study found that 700 employees in Ohio are on food stamps." businessinsider, http://www.businessinsider.com/amazon-employees-on-food-stamps-in-ohio-2018-1. Accessed 5 Feb., 2018.
Head, Simon. "Worse than Wal-Mart: Amazon’s sick brutality and secret history of ruthlessly intimidating workers." salon, 23 Feb., 2014. https://www.salon.com/2014/02/23/worse_than_wal_mart_amazons_sick_brutality_and_secret_history_of_ruthlessly_intimidating_workers/ . Accessed 19, Dec., 2017.
Hullinger, Jessica. 13 Secrets of Amazon Warehouse Employees." mentalfloss, 4 Nov., 2015. http://mentalfloss.com/article/61249/13-secrets-amazon-warehouse-employees. Accessed 19 Dec., 2017.
Jamieson, Dave. "The Life and Death of an Amazon Warehouse Temp: What the future of low-wage work really looks like." huffingtonpost, http://highline.huffingtonpost.com/articles/en/life-and-death-amazon-temp/ . Accessed 19 Dec., 2017.
Jones, Janelle and Ben Zipperer. "Unfulfilled promises: Amazon fulfillment centers do not generate broad-based employment growth." epi, 1 Feb., 2018. https://www.epi.org/publication/unfulfilled-promises-amazon-warehouses-do-not-generate-broad-based-employment-growth/. Accessed 10 March, 2018.
Karlis, Nicole. "Jeff Bezos deemed richest man in the world while Amazon warehouse workers suffer grueling conditions." salon, 9 Jan., 2018.https://www.salon.com/2018/01/09/jeff-bezos-deemed-richest-man-in-world-while-amazon-warehouse-workers-suffer-grueling-conditions/ . Accessed 10 Jan., 2018.
Semuels, Alana, "What Amazon Does to Poor Cities: The debate over Amazon's HQ2 obscures the company's rapid expansion of warehouses in low-income areas. theatlantic, 1 Feb., 2018. https://www.theatlantic.com/business/archive/2018/02/amazon-warehouses-poor-cities/552020/ .19 March, 2018.
Yeginsu. Ceylan. "If Workers Slack Off, the Wristband Will Know. (And Amazon Has a Patent for It.) nytimes, https://www.nytimes.com/2018/02/01/technology/amazon-wristband-tracking-privacy.html. Accessed 2 Feb., 2018.
Cleveland Area Malls Turned Into Fulfillment Centers
Picture credit: http://abandonedplaces.tumblr.com/post/608094072/the-new-south-china-mall
As has happened elsewhere, a number of Cleveland area malls have fallen into disrepair, the victims of changing times and shopping habits. Two of them – The North Randall Park Mall and the Euclid Square Mall – have been reborn as Amazon fulfillment centers.
The North Randall Park Mall was dubbed the largest in the world when it first opened during 1976. And it will continue to be huge by anybody’s definition as it serves as a fulfillment center that employs an estimated 2,000 workers and measures 855,000 square feet in size. Its location is considered optimum because it stands in close proximity not only to Cleveland but also to Detroit, Columbus and Pittsburgh. Combined, these metropolitan areas are home to an estimated 3 million people, customers to whom Amazon can quickly ship orders.
The Euclid Square Mall opened during1977 and closed about 20 years later. During its final iteration, it was home to an eclectic mix of small churches and businesses. The arrangements Amazon made when it purchased this facility with the intent of turning it into a fulfillment center were definitely favorable to its financial interests. It paid only about $7 million for the mall plus the 70-acre site that surrounds it. And the Ohio Tax Credit Authority approved a 10-year, job-creation tax credit for the project. That credit should eventually be worth $3.9 million, based on Amazon's prediction that it will generate $27.7 million in new, annual payroll on the site by the end of 2020.
Outline for the Paper on Amazon Fulfillment Centers
This paper should be 850 words in length. You should focus laser-like on the topic at hand and details are always welcome.
Talk in general terms about Amazon. Do you think it merits all the attention it receives?
Body of the Paper
Here are three essentially positive conclusions that observers (journalists/ researchers) have reached about the fulfillment centers?
The fulfillment centers work to revitalize cities that have been left bereft as they lost manufacturing jobs.
These centers provide employment to people who might otherwise be unemployed. People who work in one of these facilities might not be paid high wages, but they gain a foothold in the job market.
These facilities employ advanced technology (robotics) and they are energy efficient. Other corporations have followed their lead as they have upgraded their business operations.
Here are three skeptical conclusions that observers (journalists/ researchers) have reached about the fulfillment centers?
Workers in these centers are pushed beyond their physical limits and otherwise abused.
Despite the fact it enjoys virtually unlimited resources, Amazon fails to pay the workers in its fulfillment center a living wage; these individuals qualify for government benefits, such as food stamp. So, in a very real sense, American taxpayers are subsidizing Amazon. Possibly, that arrangement is one reason it has become so profitable.
Even though they might employ large numbers of workers, the fulfillment centers have not necessarily lowered unemployment rates in the cities where they are located.
Do you agree/ disagree with any of the aforementioned conclusions observers have reached about the fulfillment centers. As you respond to these questions, rely upon information that was presented in the assigned readings for this class or in any resources you accessed on your own. Your personal opinions are also welcome.
You have considerable leeway. You can limit your comments to your opinions about Amazon fulfillment centers. Or, you can intersperse opinions about Amazon as it has evolved as a corporation into your dialogue.
Amazon prides itself upon being the “everything store,” selling virtually anything a customer might want or need. People who live in rural, urban or suburban areas can buy any item that is sold through this behemoth; their options are virtually unlimited.
And their purchases are processed/ delivered to them through the fulfillment centers. As that happens, does the fact that somebody lives in the country instead of in a city become less significant than might otherwise be the case? Do these distinctions blur? Remember, when you journey through cyberspace, your geographic location becomes in many ways irrelevant; you are where your computer/ mobile device says you are. Is that necessarily a good thing? Does it mean that the places where people live lose their significance?
Use this model paper as a guide as you complete your final assignment but, as you obviously realize, you should not copy it.
Say the word “Amazon” and the chatter starts immediately. Dubbed "the everything store," its vastness alone ensures that it will remain an ongoing topic of controversy for the foreseeable future. Some people will tell you that they love Amazon because they save money as they shop on line. Others, however, claim that this company has done nothing but enrich itself at the expense of mom and pop stores that simply cannot compete with it price-wise. And as is the case with virtually everything this behemoth touches, the Amazon fulfillment centers, work sites where purchases are processed/ delivered to literally millions of customers, have their staunch supporters and their equally staunch detractors.
The Fulfillment Centers: A Positive View
Amazon received more than 200 applications when it announced that it was looking for a second headquarter (HQ2) to supplement the one it has long had in Seattle, Washington. And that is hardly surprising because the city which is honored by becoming Amazon’s home away from home will receive considerable benefits.
The high tech workers whom it employs will bring with them not only an aura of hipness but also ready cash to spend on housing and other things. Local businesses will prosper, especially if they appeal to an upscale crowd. And as this happens, the city will gain welcomed tax revenue.
However, many cities that do not meet the exacting standards to be considered as the site of its HQ2 could still end up enjoying that company’s largesse. They could become home to one of Amazon’s numerous fulfillment centers, work sites where orders are processed, that now dot the American landscape. And many of the towns that currently house these centers are down on their luck due to industries having left them and could definitely stand a helping hand.
Stockton, California is a case in point. City officials announced during August, 2017 that Amazon would be building a more than 600,000 square foot warehouse that will bring an estimated 1,000 jobs to the city. This announcement came only 5 years after Stockton declared bankruptcy. According to statistics published by the State of California during July, 2017 the Stockton area has an unemployment rate that at 7.7 percent was 3.1 percentage points above the national rate.
The Fulfillment Centers: A More Skeptical Viewpoint
Amazon might make big promises when it brings a fulfillment center to distressed towns, such as Stockton; taxes and jobs will be coming their way. But there is some considerable evidence that these facilities do not pay these towns the windfall in sales and other taxes that they might have expected they would be enjoying.
And here are some other considerations:
Many fulfillment center employees receive food stamps and other government subsidies, qualifying for these benefits as low wage workers. So, in a very real sense, tax payers are subsidizing Amazon’s operation. Does such a highly profitable corporation deserve that type of largesse?
There is considerable evidence that the people who work in these facilities are abused on many levels, forced to exert themselves beyond their level of endurance. For example, an employee at the Allentown, Pennsylvania fulfillment center found that the speed at which he was expected to move items from large bins into packages slated for delivery was constantly being increased. It doubled from 75 pieces an hour to 150 pieces an hour within six months after he was first employed at the facility. He was written up when he could not meet these expectations and was eventually fired.
My Personal Thoughts on the Amazon Fulfillment Centers
Times change and people's shopping habits change along with them. Going back a few decades, people shopped in big department stores in downtown locations. In time, however, they gravitated to suburban malls and finally to big box stores off freeways. And Amazon (on line shpping) might simply be the next step in that journey; not great, not horrible, just a sign of the times.
Yet, no matter how hard I try to view it in non-judgmental terms that scenario demands, one thing about Amazon continues to disturb me. Because they have few employment options other than to work in a fulfillment center – workers in these facilities remain vulnerable to being exploited. And their plight becomes more poignant when it is viewed from a historical perspective; they are hardly the first group of people to fid themselves in that position.
The immigrants came to this country from Europe between 1890 and 1910 did not know either the language or the culture. So, as is the case with the fulfillment center workers, their employment options were quite limited; they were often relegated to sweat shops where the working conditions were dangerous.
However, they formed unions, such as the International Ladies Garment Workers, that helped them gain their rights. Possibly, Amazon workers will do the same thing. But considering as the company has established a strict no union stance, it might be hard for them to even attempt making such a move.