Imagine that you have to sell every single book in it before closing time and then add to
Imagine that you have to sell every single book in it before closing time, and then add to that the task of wrapping them all for postal delivery, and you have some idea of what that figure means in practice. And even then, says Terrell, they weren’t running close to capacity.Right now Mass Land is a desert; just a space from which you can appreciate the scale of the picking towers – a high-rise storage system constantly replenished by those on “putaway”, who take fresh deliveries and restock the shelves Somewhere in there are four bits of my property. Just before I set off to drive up the M1, I obey the cheeky admonition of the Amazon screen (“Your shopping basket lives to serve Give it a purpose – fill it up!”) and put in an order. By the time I arrive, it has already entered the steady process that will have it out of the door before 24 hours have passed. If I were to check its progress on the website, as all customers can, I would see it described as “Dispatching soon”, but the in-house software gives a more telling detail.
Right now, it declares, it is “Paid, not picked” – a clue to one source of Amazon’s edge over its high-street rivals.Strictly speaking, almost everything you can see in this vast inventory of software, CDs, electrical goods and books belongs to either the customer or the manufacturer. On a rough average Amazon will pay for an item 15-20 days after it has itself been paid, earning interest in the meantime. What’s more, it can turn its stock over with an efficiency that would make a conventional bookseller weep – adjusting purchasing orders with its own in-house predictive software, so that stock matches public desire with figure-hugging tightness. If there’s a spike in demand, they can react quickly – with their major suppliers, an order placed at nine one night will usually be in the warehouse by the next morning. The fact that Royal Mail is on site, monitoring the 160 chutes that feed parcels to a specific postal code, means it can often be out again the same day.The second thing you notice about the distribution centre is that it appears to be hopelessly understaffed. This isn’t a busy time of year – though aggressive price-cutting and promotions have ironed out the usual post-Christmas slump – but even so, it looks as if a half-hearted fire-drill is under way.
The shrink-wrapping machines thump steadily away (“Never knowingly under-packed” could be the corporate motto) and the orange “totes” – the plastic crates in which orders are assembled – shuffle along the overhead conveyor belts, queuing up to await sorting. But there aren’t many people, except at those points where automation has to give way to the vestigial human decision still left in the system. This depopulation is another clue to Amazon’s current route-plan for long-term profitability. Terrell has the statistic ready: according to a recent year-on-year comparison, they were shipping 15 per cent more goods with 4,000 fewer staff.
Continuing expansion is still part of the plan, but operational bloat isn’t. Last year the company discovered the hard way that name recognition and internet presence could not be easily traded for increased revenue – a decision to cut discounting in America resulted in a drop in orders, until price-cuts were reinstated. Efficiency was the only way to increase the margins.Which raises a question about the company’s future as the Sears, Roebuck of the 21st century (“Anything – with a capital A,” is Bezos’s answer to what the company will sell in the future). Asked once whether his customers were loyal, Bezos replied, “Absolutely, right up to the second that somebody else offers them a better service.” This is responsible CEO talk – consistent with what he’s called an “anal-retentive” focus on customer service. But Amazon customers are loyal – they have a relationship with the firm built on its alternative approach to the commercial imperative. UK customers will soon encounter a new button on the website, which will allow them to sell their own used copy of a title to buyers.