Online retail giant Amazon certainly isn’t afraid to spend money in order to make money. That much is clear from the news that recently came to light regarding Amazon’s $775 million purchase of Kiva Systems Inc.
For Amazon, it’s the single biggest acquisition for the company since it bought Zappos.com in 2009.
If you’re unfamiliar with Kiva, the company builds cutting edge warehouse robots capable of moving, retrieving, and shipping products inside of an eCommerce warehouse.
According to the scuttlebutt in retail news, Walmart had an opportunity to acquire Kiva but ultimately declined.
“I can see how Walmart would not have valued Kiva as much as Amazon,” Scot Wingo, CEO of ChannelAdvisor, tells Reuters. “Some on Wall Street are scratching their heads about the Amazon purchase, but many people don’t get the complexity of making eCommerce fulfillment centers work,” Wingo added. “If you’re Amazon, spending so much on all these warehouses, the deal makes sense.”
Within the next nine months, Amazon expects to have more than sixty warehouses equipped with Kiva robots, which will help improve shipping times substantially across the U.S.
“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” says Dave Clark, vice president of global customer fulfillment at Amazon.
