The encyclopedia · Engineering & Operations · Operational decision · 2003–2007
Zappos built its warehouse 21 miles from UPS WorldPort, then promised next-day delivery
Zappos placed its 280,000-sq-ft DC 21 miles from UPS's Louisville air hub, then promised any order placed by 4 p.m. arrives anywhere in the US next day.
Zappos.com
the move
Zappos built the online shoe retailer's service around 'delivering WOW,' and the back end had to match. In 2003 the company opened a 280,000-square-foot fulfillment center in Shepherdsville, Kentucky—21 miles from UPS's WorldPort Louisville air hub—and later expanded it by 832,000 square feet as orders surged past $1 billion in gross sales.
The DC runs around the clock, seven days a week. Because it sits at the edge of UPS's overnight network, Zappos can promise that orders received by 4 p.m. will be delivered anywhere in the contiguous United States the next day, with most orders moving on UPS Next Day Air.
The system is built for speed: every unit is serialized and labeled at receiving, goods go straight to pickable locations, and orders are processed in under an hour so they catch the evening sort. Zappos says the central Kentucky location is what lets it reach more customers more quickly.
why it works
- 21 miles from WorldPort meant packages could catch the last overnight sort.
- 24/7 operation lets orders placed by 4 p.m. fly out the same night.
- Next-day delivery made returns painless and word-of-mouth fierce.
- Automated sortation (100+ cartons per minute) kept the promise at scale.
what transfers
Location can be the product: place inventory where the carrier's network is strongest, run the warehouse around the clock, and speed becomes a promise you can keep without owning an airline.
what came after
The next-day promise and 24/7 DC remain the core of Zappos's fulfillment operation; DC Velocity's 2011 profile shows the system handling up to 300,000 products a day with expanded facilities in Shepherdsville.
references
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