A New Connection Between Physical Storefronts And Amazon’s Online Sales
As Amazon continues to expand its mountain-sized market share in both online and offline retail spaces, its strategy to grow its retail presence is now impossible not to notice, with recent partnership with Kohl’s and other retail companies.
Amazon has been aggressively growing its retail presence in recent years. With the acquisition of Whole Foods, Amazon now owns over 400 grocery stores nationwide on top of 15 bookstores, 2 fresh pick-ups in Seattle, over 40 pop-up spots to showcase its devices, and many more.
So, why is Amazon growing its retail presence so rapidly?
According to CNBC, “Amazon is seeing an uptick in online sales in the regions where it already has a physical outpost. While sales from each bookstore or pop-up store may not be incremental, they are fueling more purchases on the Amazon.com website.”
In my opinion, this also relates to consumer’s Reticular Activating System (RAS) where it helps the brain to create connections and makes things easier to remember. For instance, say you are walking past one of Amazon’s bookstores in New York while getting a cup of coffee. Then you noticed news about Amazon while browsing through Facebook. A week ago you wouldn’t have even noticed the news, but now you do. Few days later, you decide to buy a book as a gift for your mom.
But perhaps the bigger reason is to collect as much purchasing data as possible and make better offers to its core Prime users. The more data Amazon acquires, the better Amazon can refine offerings and provide better shopping experiences for its customers.
Amazon’s Fulfillment Center Expanse Continues
Aside from growing its retail presence, Amazon is expanding its warehouse centers across America and the rest of the world. Knowing where these warehouse locations are becomes particularly helpful for FBA sellers to better understand tax amnesty issues with application to their own inventories.
Looking at the map below, we can see that these centers are clustered close to populated cities, making Amazon Prime’s two-day shipping more cost effective and easier to fulfill.
Amazon now has 141 fulfillment centers where they pack and ship a myriad of products, 35 of those are either planned or under construction. Some centers handle Amazon’s “Fulfillment by Amazon” program, where third-party sellers send items to Amazon to be shipped to customers while others handle customer returns.
As for FBA sellers, inventory stored remotely in an Amazon warehouse can be one of the key triggers of state tax nexus. Keeping track of where your products are located is a vital part of understanding your state-by-state sales tax responsibility.
Pro Tip: Be sure to seek help should you have questions and take preventative sales tax measures so you can enjoy a very profitable Q4 with all the upcoming holiday season.
Eugene is an Amazon business coach, consultant, and blockchain enthusiast. He helps aspiring and established entrepreneurs build a highly profitable Amazon FBA business so they can unlock their true potential. Learn more about him at wiseintro.co/FreedomProfitsBlueprint