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Amazon Divests Fulfillment Center for $176 Million

Amazon Divests Fulfillment Center for $176 Million

Wednesday, July 8th, 2020

Grocery giant Amazon isn’t above playing into the “you win some, you lose some” strategy, and this unusual strategy has been working highly in the retailer’s favor. It recently divested one of its larger facilities, a move that positions Amazon to then set up smaller distribution hubs throughout the U.S.

Amazon, according to the Milwaukee Business Journal, has divested its 1.5-million-square-foot fulfillment center in Kenosha, Wisconsin, for $176 million. The facility’s two buildings were sold to two global real estate investment firms. The news source noted that the e-tailer’s Kenosha fulfillment center was one of the first in a large network of Amazon distribution centers in southeast Wisconsin.

In a strategic move, Amazon divested one of its fulfillment centers for $176 million to set up smaller distribution hubs across the United States (Image: Scott Paulus, Milwaukee Business Journal)

Now, Amazon appears to be building a scaled-down (in square footage) fleet of facilities, with the grocer confirmed for a short-term lease for a 748,300-square-foot center located across the highway from its former Kenosha location. Another two are allegedly confirmed in Yorkville and Sturtevant as well.

These smaller distribution hubs are meant to work alongside the larger facilities by serving as half-way points between the massive distribution centers and buyers. These centers will receive truckloads of product from their larger counterparts before delivering these products to consumers.

Amazon always seems to be one step ahead of its competitors in terms of building out supplier partnerships. Will this just be one more number to take down in its strategy black book? Deli Market News will continue to report.