Amazon Expects a Merry Little Christmas

Amazon.com did 41 percent of its 1999 business in the fourth quarter, the one that contains the all-important holiday season. But in the process, it ran into a host of inventory, order-fulfillment and distribution problems, as did most e-tailers. Many observers feel that those problems have helped precipitate the slump in business that e-commerce companies have felt throughout 2000.

This year, however, the Internet juggernaut insists it will be better prepared to handle the seasonal rush of business. It has finished construction on four distribution centers to fill gift orders. (Last year, Amazon.com was struggling to complete construction on four distribution centers and, at the e-retailer's warehouse in McDonough, Ga., workers were outfitted with hard hats as they packed and wrapped books and other gift orders.)

Last year, some of Amazon.com's customer orders were fulfilled from different warehouses, causing the company to pay for shipping twice or more while the customer paid a singular rate. The company says that problem has since been turned around. In addition, Amazon.com has begun estimating what the demand will be for select products in singular cities.

The e-retailer says it is also making better use of its staff. While temporary employees last year were receiving and putting away product shipments, causing numerous mistakes, new workers this year will be responsible only for gift-wrapping and packing single orders.

And Amazon.com feels it can reduce the types of losses that the 1999 holiday craze created. Last year, the company was forced to take a $39 million charge in the fourth quarter due to its overstocked inventory, among other things. This year, Amazon.com says its ordering is more accurate.