Amazon spends $700 million on storage robots

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In recent weeks, the news that Amazon is launching drone delivery has been widely reported and widely discussed. While there are big questions about the future of drone delivery, a more realistic robotic workforce is already in use at Amazon’s Seattle warehouse. The investment could help Amazon save $916 million a year in costs, according to analysts.

Kiva Systems, a company acquired by Amazon, can deliver shelves full of goods directly to warehouse workers, dramatically reducing labor costs. This would cut the cost of fulfilling ordinary orders by 20-40 per cent, from $3.50 to $3.75. Large scale deployment of the Kiva robot could help Amazon save $458 million to $916 million in operating costs based on warehouse efficiency calculations.

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