Warehousing, Fulfilment and Automation

On 19 March 2012 Amazon announced that it would buy Kiva Systems, a company in North Reading, Massachusetts, for about $775 million in cash (company, reported), its second-largest acquisition at the time after Zappos. Kiva had been founded in 2003 by Mick Mountz with Raffaello D'Andrea and Peter Wurman. Its orange drive units slid under shelving "pods" and carried them to stationary workers, so that instead of walking miles of aisles a shift to find items, a picker stood at a station while the shelves came to them. Kiva claimed that a picker could handle several times as many units an hour as one walking to fixed shelves (vendor claims, reported), and that pods could be packed more densely than aisles allowed. Its customers included retailers such as Staples, Gap and Walgreens, and Diapers.com (reported), several of them Amazon's competitors.

Amazon stopped selling Kiva systems to new outside customers and let existing contracts run down (reported). It redesigned the robots around its own buildings, began deploying them in new fulfilment centres from 2014, and renamed the unit Amazon Robotics in 2015. In July 2025 it announced its one-millionth robot, delivered to a fulfilment centre in Japan, along with an AI model for coordinating the fleet that it claimed improved travel time by about 10%, and in May 2025 it unveiled Vulcan, a picking robot with a sense of touch (company). It has not disclosed what the robots cost or how quickly they paid back.

The purchase is usually counted among the best in logistics. It gave Amazon a multi-year head start in automation, and it left a gap in the market that a generation of vendors, Locus, Geek+, AutoStore, Exotec, Symbotic and others, rushed to fill, funded by venture money in 2013–21 and by SPAC listings in 2021–22, some of which ended badly in 2022–24. This chapter explains how warehouses make money, why e-commerce changed what they are for, and what automation does and does not buy.