Speculation on where Amazon plans to base their second corporate hub has 20 U.S. cities vying for a shot to become the conglomerate’s new home. Denver is one of those cities and Amazon is not the typical transplant since the recreational marijuana boom. Amazon has been in the state for a few years now and has established warehouses in both Thornton and Aurora. While many are excited at the thought of an increase of jobs, others are less than thrilled about the idea. Colorado Comedian Adam Cayton-Hollan has been outspoken about the prospect and during one of his recent pod-casts had this to say, “They’re not going to hire local, they’re going to bring in Silicon Valley people. . . Last year La Voz published a front page story about Amazon’s move to Colorado and the idea of job growth it might bring to the state.
The article said:* In January 2017, Amazon announced it would hire another 100,000 workers over the next year and a half. One thousand of those full time jobs would be created in Colorado as the company opened the state’s first Amazon order fulfillment facility. The one million square foot fulfillment center allowing the company to add Denver to their list of cities where consumers can receive orders within hours. The warehouse is located north of I-70, near Denver International Airport. Amazon’s Centennial State expansion comes on the heels of several other bullish moves in the state including their sorting station opened in the summer of 2016, a mere five miles away.
Amazon’s expansion continues to keep Colorado hot in terms of job growth in the technology industry. Commercial real estate firm, CBRE, reported 25 percent job growth in the technology industry in Colorado in the five years between 2010 and 2015.
Amazon’s first Colorado employees started working in the Aurora package sorting facility in June of 2016, taking advantage of the Mountain West time zone and central geographic location as a travel and delivery hub. The facility comprises 425,000 square feet and employs around 350 full time workers.
Since January 2017 LinkedIn has listed numerous positions for Denver and Broomfield based Software Engineers, “Coming to Amazon gives you the opportunity to work on a small development team in one of our many organizations; Amazon Web Services, e-Commerce Services, Kindle, Marketplace, Operations, Platform Technologies, and Retail.” In addition, the company was hiring a Research Scientist and Denver City Manager for various technology projects.
In the third quarter of 2016, Amazon opened an office in Broomfield, expanding on Colorado high tech operations which already include web services. Amazon Web Services (AWS) offers computing infrastructure and hosting. The services are advantageous for companies starting small or in expansion phase because computing capability can be purchased on an as-needed basis. AWS also offers data storage and software development. Their recent success has allowed AWS profits to surpass those of Amazon’s traditional online retail business. AWS accounts for less than 10 percent of company revenue but over 40 percent of profit according to company reports.
The addition of Amazon to the technology corridor between Denver and Boulder strengthens Colorado’s high-tech reputation. Amazon joins a collection of technology dependent firms in the region including Level 3 and Datavail. According to CBRE, the Highway 36 corridor where Amazon opened its Broomfield Tech office has the state’s highest concentration of high tech companies. Throughout Colorado, Amazon adds to the presence of tech monsters Lockheed Martin, Google and Arrow Electronics.
Innovation is a hallmark of Amazon founder, Jeff Bezos. Amazon’s innovation is seen as cutting edge with tested package delivery via drone and the recently announced Amazon Go grocery store concept featuring self-service and self-checkout.
Another Amazon innovation has come in the form of the Amazon Prime Now program guaranteeing two hour delivery in 28 large markets including Phoenix, Portland and Indianapolis, but not Denver. Their web site boasts, “Prime Now offers household items and essentials you need every day plus the best of Amazon, with FREE 2-hour delivery.” Prime Now also touts one-hour restaurant delivery in 23 cities across the country. Again, Denver is not in the mix. The Amazon Prime quick delivery is possible through contracting private car owners, much like Uber drivers, to deliver packages on a part-time basis. That program is called Amazon Flex.
The swift delivery promise with nationally expanded delivery capabilities has caused other shipping companies to test their ability to push ordering deadlines. FedEx, UPS and the United States Post Office have all minimized the time to deliver packages because of the Amazon fast delivery promise through projects like Prime Now. Amazon opening their own sorting and fulfillment centers allows the company to control their own delivery timing and has damaged the profits of their shipping rivals.
Bezos’ innovation has spread beyond Amazon including his half a billion dollar investment in the space company, Blue Origin. The company has built an extensive launch site in Texas and teamed with Colorado-based United Launch Alliance (ULA) to make rocket engines and rockets on behalf of the United States government. Blue Origin has successfully launched and landed their New Shepard rocket with the eventual goal of promoting the exploration and eventual human settlement in space. Bezos shared his space vision as a featured speaker at the Colorado Springs Space Symposium last year. As headquarters to space technology companies including ULA and Lockheed Martin, the home of the U.S. Air Force, and the University of Colorado, one of the largest NASA funded universities, Colorado may be seeing much more of Jeff Bezos and Blue Origin.
Traditionally, retailers start with physical stores then use the internet to enhance sales. However, Amazon is anything but traditional. In fact, the company has grown in the exact opposite manner – first growing as an online retailer with centralized warehouse facilities, then decentralizing storage space, and finally opening up physical retail shops. The tech giant’s moves in Colorado has followed a curious growth pattern.
Before the 2016 holiday shopping season, Coloradans were treated to one of several Amazon Pop-Up shops across the country. Fifteen states feature 29 stores including our state’s lone store south of Denver in Park Meadows Mall. Consumers can try one of several Amazon products including Fire and Kindle computer tablets, the Dash button which allows quick recurring ordering of household essentials, and the Fire television service which competes against Apple TV, Sling TV and Roku.
With internet sales still key to the Amazon strategy, the company started to comply with state law mandated the collection of sales tax for online sales. After years of lawsuits and resistance to the state taxes, Amazon began reporting and collecting Colorado sales tax in February of 2016.
Amazon was first incorporated in 1994 in Bellevue, Washington, by CEO Jeff Bezos. The company started as an online bookstore and made their first book sale in 1995. The Financial Times Global 500 lists Amazon as the 4th largest U.S. company. In 2015, Amazon surpassed Walmart as the country’s most valuable retailer. The company is now valued in excess of $250 billion. The total Amazon workforce in the United States surpassed 180,000 at the end of last year.