Why Amazon Is on a Warehouse Building Spree

The company spends billions on a new wave of exurban warehouses
Dan Levine/Getty Images; Matt Cardy/Getty Images

For a company whose showrooms are all online, Amazon.com spends a staggering amount on bricks and mortar. The e-commerce giant has invested roughly $13.9 billion since 2010 to build 50 new warehouses, more than it had cumulatively spent on storage facilities since its 1994 founding, bringing the total to 89 at the end of 2012. (It’s announced five more in the U.S. this year.) Amazon aims to be able to deliver most items the day they’re ordered, so it can keep rivals such as EBay and Wal-Mart Stores from peeling off customers. EBay offers same-day delivery in some cities, and Wal-Mart is moving more sales online. “What Wal-Mart and EBay are working on is, can they be faster than Amazon?” says Wells Fargo analyst Matt Nemer. “It might not be the highest-margin sale in the world, but they can potentially get something to you in an hour.”

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