[tesseractive]

Another big difference between this and Wal-Mart is geography. Wal-Mart's strongest areas are less-densely-populated rural areas where one store can draw customers from miles around. And indeed -- you can't easily set up a same-day Amazon delivery service in rural America. The distances and low population density make it completely impractical. For the foreseeable future, Amazon will compete with Wal-Mart in these areas using traditional UPS-style delivery and larger selection.

But this is going into New York City. And the flipside is that you can't put a Wal-Mart in the middle of NYC -- it's cost prohibitive. So it's not clear that this initiative even competes with Wal-Mart really. And brick and mortar stores in the middle of an expensive city have huge real estate costs, so it's difficult (though not necessarily impossible) for them to compete on cost the way Wal-Mart does.

[dkrich]

So then my question would be- where does Amazon store their inventory? They still have to figure out a way to give people selection and timely delivery but do so in a way that doesn't involve storing large amounts of inventory in expensive, densely-populated urban areas. The same rules apply to them as Wal-Mart in that regard. Wal-Mart could open a distribution center in Manhattan too, if the economics of it worked out.

So let's supposed that this can be done profitably in New York. New York is a special case in a sense, that it is one of the most densely-populated areas on earth, and so deliveries do scale there in a way they don't elsewhere. But then what is the play in a place like Atlanta, Dallas, or Los Angeles, where driving is essential and addresses are wildly irregular?

[somebodyother]

They store it in New Jersey, for NYC, if you were wondering.

http://www.nj.com/mercer/index.ssf/2014/07/amazon_warehouse_...