Did you know?
Amazon is buying up the very malls that they helped put out of business. Did you know? I did not until today.
There are certainly a lot of malls that are boarded up around the USA.
Until recently, I lived in the Philippines for about 2 decades, but here in the States, malls are becoming a thing of the past. The big thing now is online shopping. You order what you need, and in a day or two, it is delivered right to your doorstep.
In the Philippines, the mall is where it is at. Even if you don’t plan to buy anything, going to the mall is a social event. If you don’t have anything going on, you go to the mall!
Here in the United States, though, everybody seems to be busy doing something, there is not much time to go hang out at the mall, and getting the things you need is quick and convenient.
Why is Amazon buying abandoned malls?
If nobody is going to the malls anymore, why would Amazon be buying the malls? Well, there are a number of reasons for that. In short, though, these abandoned malls will no longer be malls. So, why is Amazon buying them?
Amazon wants to set up more distribution centers. Especially now that Amazon has announced 1 Day Shipping for Prime Members instead of the previous 2-day shipping. Adding more distribution centers means that the product will be closer to the customers. The more distribution centers they have, the more customers will be nearby for quick shipping and delivery.
There are actually 4 reasons that Amazon wants the malls
1. Free Space
These abandoned malls offer a lot of free space. This space is needed because Amazon sells so many products. These products are both products that Amazon owns themselves, and products owned by others (like me). Many FBA Sellers (Fulfillment by Amazon) send products in \\\to Amazon distribution centers and Amazon sells the products on their platform. After the sale is made, Amazon pays the FBA seller for the product that was sold.
So, with all of these products (millions), a lot of space is needed for storage and quick fulfillment.
2. Malls are near large population centers
Typically, malls were built near population centers. This is obvious because the large population means that a lot of potential customers are near the mall. If the malls were far from population centers nobody would go shop there.
Having Amazon fulfillment centers near population centers makes sense too because it will save on shipping costs and also get the purchases delivered much more quickly than, say if the item was shipped from several thousand miles away.
There is another advantage for Amazon though. Being near population centers means that there are plenty of potential employees nearby. Operating a fulfillment center required people. Some of these jobs are now being done by robots, but there is still a big need for people.
3. Proximity to highways
Because a lot of people went to malls, the malls were built near highways for easy access. If thousands of people wanted to go shop at the mall, they had to have an easy way to get there.
Where there are highways there are also a lot of businesses that will support the Amazon fulfillment centers. Primarily shipping companies like UPS, USPS, and so on. This will lead to to great efficiency in both shipping and receiving. Shipping of goods to customers, and receiving goods sent in by suppliers and FBA sellers.
Deliveries will be faster and also cheaper.
Another advantage of being near highways is that public transportation is likely to be readily available to bring workers to the job site, and home after work.
There are types of infrastructure other than roads.
- Gas lines
- Communications (phone, Internet)
Because of this, Amazon can move in and not have to spend a lot of money building up infrastructure to get up and running.
What do I think?
Well, everything makes sense. I had not realized that Amazon was buying up abandoned malls, but after thinking it over and researching a bit, it all makes perfect sense. It would seem that Amazon has made a wise choice.