Amazon got a lot of ink for its sci-fi drone delivery idea this week, but a more real and immediate robot effort underway in the Seattle retailer's warehouses could save it as much as $916 million a year, according to one analyst.
Amazon's rollout of robots from a company it bought called Kiva Systems-which can shuttle shelves full of merchandise to warehouse workers rather than the other way around-may help pare 20% to 40% off the typical $3.50 to $3.75 cost of fulfilling a typical order, says Shawn Milne, a Janney Capital Markets analyst in aresearch note.
"We believe this could be a significant opportunity to drive higher operating efficiency across Amazon's massive fulfillment center network," said Milne in his note.
Amazon has been working to drive down order costs and speed delivery, in part by constructing more warehouses closer to urban centers. And while many of its latest efforts focus on the delivery itself, Kiva robots could help improve efficiency within its warehouses where humans, and human error, still rule the day.
The company bought Kiva in March 2012 for $775 million but......
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