Amazon and Robots: A Match Made in Heaven


Amazon.com has announced that it will be purchasing Kiva Systems, a Massachusetts-based robotics maker. Using $775 million in cash reserves, Amazon—who has used Kiva’s robotics systems in the past—will add the robotics manufacturer to its business acquisitions, along with shoe retailer Zappos.com from 2009.

Kiva’s technology and robotics manufacturing focuses on inventory and warehouse services. They are contracted with many large retailers besides Amazon, including Gap and Staples. The goal here is to fully incorporate Kiva’s expertise into Amazon ever-growing distribution network.

“Amazon has not had great margins,” Jason Helfstein, an analyst at Oppenheimer & Company. “One has to believe they looked at this and thought, ‘Why not just own it and take all the technology in house?’”

The acquisition comes as Amazon aggressively adds distribution centers to service its growing consumer base. The company has heavily promoted its Prime service, which provides customers two-day shipping for $79 a year. Last year, Amazon said it planned to add 17 warehouses, bringing its total to 69.

 

Kiva and its systems should further help to trim costs.

Some of Amazon’s current cost-cutting measures have come under scrutiny, as the non-union employees at distribution centers have been citing unreasonable expectations, high pressure, and unsafe work conditions. Read the recent expose by one former factory worker featured in Mother Jones’ March/April 2012 Issue, “I Was A Warehouse Wage Slave,” to learn more.


Attribution

NY Times Dealbook
Kiva Systems’ Statement


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