One of the biggest online retail companies, Amazon.com Inc., is busy building new warehouses in as many as seven U.S. states. These million-square-foot warehouses will act as distribution centers to be stocked with everything from books to diapers the online retail company is selling on its website.

New distribution centers will be located in California, Indiana, Tennessee, South Carolina, New Jersey, Virginia and Los Angeles.

The building frenzy Amazon has engaged in is said to be related to the strict enforcement of online sales tax.

Amazon.com (News - Alert) has risen to the top of the online retail food chain because a vast majority of its consumers do not pay sales tax.  

Now that mandatory sales taxes will be strictly enforced in a few days, however, Amazon sales will likely drop.

To make up for the impending sales tax that will be charged, Amazon has started building the warehouses to provide better service to its customers. With the numerous new warehouses that will be popping up nationwide, Amazon will have faster access to products, which in turn will guarantee faster delivery to the consumers. 


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Jeff Bezos, Amazon’s chief executive officer, said the company will be trimming as much as a day off its two-day shipping times. Some analysts say that if Amazon perfects the process, the tired old adage of “same-day delivery” will finally be a reality in the online shopping world.

In fact, one analyst from research firm Forrester (News - Alert) reports that if Amazon can make good on its delivery goal, the online retailer will stand to be the most dominant retailer in the decade to come.

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