After years of rapidly expanding its warehouse operations across the country, Amazon.com Inc. said it plans to shut down one of its oldest facilities.
The online retail giant will shutter its 1 million-square-foot warehouse in Coffeyville, Kan., early next year. According to a regional planning group, Amazon employs between 600 and 700 full-time workers at the facility, which is located about 70 miles north of Tulsa, Okla.
Back when Amazon opened the warehouse in 1999, it was seeking sites in sparsely populated states. That way, the company could avoid a so-called "tax nexus," business operations that would allow states to collect sales taxes.
As Amazon has grown, its priorities have shifted. These days, speedy delivery trumps tax avoidance. So Amazon has busily built warehouses close to urban centers in states with large populations, such as one opened last year in San Bernardino, Calif., even if it means paying state taxes. Proximity to cities makes it easier for Amazon to get the books and binoculars, toasters and toothpaste, and everything else its sells to the vast majority of its U.S. customers within a day or two.
The thing that made Coffeyville so appealing 15 years ago — its location in a state with a small population, resulting in fewer sales that could be taxed — is the key reason Amazon is closing it down now.
"We regularly evaluate our network to ensure we're placing fulfillment centers as close to our customers as possible," the company said in a statement.
Amazon declined to give any other details about the closing, except to say that it didn't make the decision "lightly" and that it would support employees "through this transition." It notified workers Tuesday about its plans, and said the facility will shut its doors next February.
The closing comes as Amazon has been on a warehouse-building tear. In addition to adding giant warehouses, which cost about $100 million each, Amazon has also started opening "sortation centers," where it sorts parcels by ZIP code, sent from its own warehouses, and sends them to individual U.S. post offices for delivery in that day's mail. It plans to open more than 15 sortation centers, near urban centers, by the end of the year.
