What we learn from this is that in Operations, all things are connected. You can’t divorce accounting, finance, marketing, and logistics from operations and distribution. So that’s why we need to learn about operating concerns.
I was surprised to learn that Amazon’s operating margin is only 3%+, but when you think that supermarkets are only about 2% i suppose it is not surprising. When you think about Amazon’s original approach to warehousing and inventory management, I am surprised that they would go for more warehouses to get the inventory closer to the customer. When they started, they invested in economy of scale, and the latest technoogy, so that their warehouses were the most efficient possible at the time. Now that was 10 years ago and the warehouses are a bit long in the tooth; there is better technology available now. (RFID, for instance). so perhaps diverse smaller warehouses would be buildable. But I think a strategic change like that would not be consistent with their longterm strategy in operations. So I side with Marty Lariviere– I don’t think having to pay sales tax nationally is going to get Amazon to change their warehouse location strategy.
How would collecting sales tax affect Amazon’s operations? « The Operations Room
Supply Chain and Logistics 