Amazon warehouse how does it work

Inside lies more than 40, sq m of shelving, packing lines and millions of products. But the company is not, in fact, hugely profitable. What keeps Amazon afloat? As for any business with tight margins, efficiency is key.

Amazon's vast, 40, sq m, fulfilment centre in Hemel Hempstead Credit: Amazon. A recent New York Times investigation revealed that the corporate culture inside Amazon is highly driven by data : personal performance, for example, is continually checked with a software system called the Anytime Feedback Tool that allows employees to share praise or criticism about their colleagues.

When you order an item online, the Amazon system quickly works out where the item sits in its inventory, and dispatches a human picker to go fetch it. For instance, products on shelves are not organised by category. Instead, they are placed on shelves as if by random.

But there is method to this apparent madness. When an item is collected by hand, the picker scans it with a handheld device to ensure that the correct object has been taken. Scanners instruct the pickers where to go, and reportedly count down in seconds how long it should take Credit: Rex. Initially, Low denies this is the case at Hemel Hampstead. However, when asked to see one of the scanners it becomes immediately apparent that such a countdown does indeed exist. As with non-robotized warehouses, the workers then scan the item, place it on one of the shelves—wherever there is free space—and scan the shelf so the computer knows where the item is located.

With the aid of robots, the same job could be done in 15 minutes. There is huge product churn as they reconfigure their offerings constantly. It is impossible to plan and manage space in such a dynamic environment.

After Amazon moved the bar for immediate gratification by offering free two-day delivery to Prime customers, many retailers have meanwhile adjusted partly by spreading a product not only throughout a warehouse, but throughout different warehouse locations, so it has a better chance of being closer to the customers who order it, and thus less expensive to ship quickly.

Many companies aim to reduce labor costs by automating more of their warehouses so they can spend more on faster shipping.

The company is building its own cargo airline and has been experimenting with drones around the world, both efforts that have attracted the attention of tech enthusiasts. Robbinsville, NJ When Dave Alperson got his first job at an Amazon warehouse in , as a temporary hourly employee, it involved walking around the warehouse with a list of where to find products—mostly books—that customers had ordered.

On the wall above, six massive words called out to the 1, workers who pass through metal detectors each day as they enter this million-square-foot cavern of consumerism: "work hard. Tricycle aside, the "fun" quotient was hard to spot. But I couldn't help but register a certain historical significance to the operation humming inside this enormous building erected in the industrial flats of Phoenix. The Amazon warehouse--known in company jargon as a "fulfillment center," or FC--is a uniquely 21st-century creation, a vast, networked, intelligent engine for sating consumer desire.

The FC is the anchor of Amazon's physical operations, the brick and mortar behind the virtual button you tap on your phone to summon a watch or a shirt or a garden hose or Cards Against Humanity or just about anything else to your doorstep. Unlike past advances in retail gratification--the emergence of the supermarket in the midth century, say, or the more recent rise to dominance of Walmart superstores--the workings of Amazon are almost entirely hidden from view.

Amazon doesn't want customers focused on the mechanics of its seemingly magical powers. But last month, the company gave WIRED a rare glimpse into one of the more than 90 warehouses it operates across the globe, looking to show that its fulfillment machine is finely tuned not just to serve Amazon itself but anyone else who wants to sell stuff on its site.

The Amazon warehouse is a uniquely 21st-century creation--a vast, networked, intelligent engine for sating consumer desire. More than 2 million third-party vendors now use Amazon to hawk their wares, their names appearing beside that "sold by" caption in product listings on the company's website.

Amazon keeps its brand front-and-center in these listings, but make no mistake: these sellers are crucial to the company's future. They now supply about 40 percent of the items sold on Amazon annually. Last year, Amazon says, third parties sold more than a billion items worth "tens of billions of dollars. Through a program called Fulfillment by Amazon, or FBA, the world's largest online retailer not only lets other sellers list their items on its website but lets them outsource shipping as well.

As we saw when we toured the Phoenix facility, third-party products come into the fulfillment center like any other inventory and sit on the same shelves as stuff sold by Amazon itself. Then these products can also go out the door just like Amazon inventory.

Sellers even have the option of offering free two-day shipping through Amazon Prime. The arrangement lets Amazon vastly increase its selection without sinking its own money into inventory while laying the groundwork for a potentially pervasive change in the way consumer goods are bought and sold. In the past, sellers just worried about competing with companies like Amazon. But by opening its fulfillment centers' doors to them, Amazon is offering businesses access to an infrastructure they could never replicate on their own.

Fulfillment by Amazon is strangely reminiscent of another big Amazon idea. Through its Amazon Web Services AWS --a menu of products that pioneered the idea of cloud computing --the company has transformed the internet startup economy by opening up its digital infrastructure to anyone.

Now, instead of spending wasteful amounts of money and time on backend basics, startups can simply pay Amazon to manage their servers for them. Freedom from IT tedium has created the foundation for companies like Netflix, Dropbox, and Foursquare to prosper. Through the engineering of its fulfillment centers, Amazon has built the world's most nimble infrastructure for the transfer of things, a logistics platform that dramatically amplifies any one person's ability to move matter to anyone else.

As Amazon expands that capacity to include its own trucks and someday flying drones , the physical reach it can offer other businesses extends even further. Much in the way cloud services and the data centers that house them have become the foundation of doing business online, Amazon's fulfillment centers have the potential to become the networked hubs of the consumer economy, the biggest of big boxes that free up businesses to focus on making things rather than moving them.

The dividing firewall between the two halves of the Phoenix fulfillment center. The halves mirror each other almost exactly. Entering the fulfillment center in Phoenix feels like venturing into a realm where the machines, not the humans, are in charge.

Also known by the codename PHX6, the place radiates a non-human intelligence, an overarching brain dictating the most minute movements of everyone within its reach. A central mezzanine provides panoramic views of both sides of the warehouse, the back walls obscured in the distance.

An impossible-to-trace web of conveyor belts and rollers shuttle the ubiquitous yellow totes--the basic logistical units of an Amazon FC--from one point to another, filled with goods destined for warehouse shelves or for customers. In the midst of all this, next to a box of police-themed Legos and several shrink-wrapped copies of the Spiderman movie trilogy on Blu-Ray, we find a fog-free shower mirror made by ShaveWell.

ShaveWell is a small business based in Knoxville, Tennessee, that Amazon touts as one of its third-party success stories. The company is run by Bill Vogel, a former financial services executive who didn't feel like moving again after his last job was eliminated, especially for the sake of his son, who suffers from a neuromuscular disease that requires him to use a wheelchair.

Vogel says he was at an Atlanta trade show for gear for his son when he had an epiphany: the U. Vogel decided he would use some of that capacity to make something. The ShaveWell fog-free shower mirror in one of the several spots where it's stored across this Phoenix fulfillment center.