What is unique in Amazon and Flipkart warehouse & viability for the same

Amazon and Flipkart warehouse are huge buildings with a lot of space. They have a lot of space for storage and sorting, which is not the case with most warehouses.

The Amazon warehouse is much more environmentally friendly than most warehouses. It has solar panels on the roof that provide some of the power needed to run the warehouse, and it uses natural light instead of artificial light to reduce energy consumption.

Aspirational brands like Amazon and Flipkart are leading the way in E-commerce. These companies have changed consumer behaviour and have altered the way people shop, consume and live. These are A grade tenants of the highest standard and every warehouse owner and commercial property owner aspires to have them as a tenant.

Amazon and Flipkart warehouses are different in many ways. Both the companies have their own strengths and weaknesses.

Now, let us understand what do these companies require and how much will it cost!

Requirements for Grade A – E-commerce players(Amazon and Flipkart warehouse):

Location:

They need to be close to the city to be able to service customer requirements , ensure same day deliveries and reduce their last mile delivery costs and delivery time. Now that FOR AN INVESTOR  simply means “Expensive land” as land closer to cities are more expensive.

Size:

They need huge sizes –When Compared with amazon and flipkart warehouse, An amazon warehouse could be as large as 50,000 square feet in a Tier 3 city and as large as 5,00,000 square feet in a Tier One city. Now that FOR AN INVESTOR simple means “Huge and Massive Investment”

Specification:

These warehouses are getting automated to being operational with the lowest amount of human interface; work and interference which means the specifications have to be top notch to support all government compliances and the sheds should be perfect in all respects to support Robots operation with utmost precision.

This means that floor levels needs to be consistent for the entire space, large number of loading bays and parking spaces, Fire and safety compliances and more add ups FOR AN INVESTOR as an “Expensive building” to make .

Budget:

Amazon and Flipkart to support their operations in providing best value needs to have cost effective Real Estate and therefore the rental have to be the lowest in the market.

Now, if you are looking to have Amazon or Flipkart as your tenant you need to:

#Have at least 20 crores in hand to build a facility to their standards

#Be prepared for a RoI of about 7-8% which is much lower than industry standards

#Be prepared to sign an agreement that is tilted in their favour – which is normal with any top level corporate globally

Point 1 above can be addressed through investing in a REIT or a fractional ownership asset where you can own a part of a larger asset. Points 2 and 3 cannot be addressed and is a cost to be a proud warehousing landlord to amazon and flipkart warehouse

Addressing the point of how to build a Amazon and Flipkart warehouse, they will answer the same in stating their preferred location, size, budget and specifications.

But be rest assured, the specifications are extremely detailed and very difficult to fulfil as the same is as per international standards and very few vendors in India have the capability of building the same to make it financially viable.

Their specifications run into several pages and each one refers to IS standards which will make it very complicated for a normal person. A seasoned and experienced warehouse developer itself finds it difficult and cumbersome to understand the specification and satisfy all the norms.

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