Thursday, March 09, 2006

I spy...a Netflix distribution center

I know the street address of the Netflix distribution center in Greensboro, NC. I have thought about going dumpster-diving there, or trying to get a photo or even trying to get a job there, but I have dismissed all of those ideas as being a little too creepy. I've never seen the place. I am not a spy, but I would love an invitation to visit sometime.

Therefore, it hurt my feelings when I read in the Greensboro News and Record that Netflix spokesman Steve Swasey apparently came to Greensboro for an interview at the Netflix distribution center here, and he didn't even look me up. Folks, that should prove to you I'm not a shill. A shill would get more respect.

According to the article, "the Netflix building is unmarked for security and competitive reasons, Swasey said, but "mainly, we don't want customers stopping by to drop off their DVDs."

The "security reasons" he's talking about are people like me, just curious, who might embarrass them or give away trade secrets by publishing details on a blog.

The other danger, of customers dropping off their DVDs there, is genuine. Think it through: if Netflix processes 30,000-50,000 DVDs per day, each one of those represents a person, in a car. Where would they park? What time would they arrive? If they all arrived within an hour or two, the traffic jam would shut down traffic for miles. If they arrived throughout the day, Netflix wouldn't be able to process until 5 PM, after all the discs had arrived, because they would have nothing to send out until everything had come in.

Imagine the traffic on a Saturday night after a Rolling Stones concert lets out. That's how many customers we're talking about. Do you know of any business that can handle that kind of traffic on a daily basis?

It's not about "throttling." It's just plain simple logistics. It really is better to let the USPS do the work.

And Steve, next time you're in town, let's do lunch :).


  1. I'm dying to know what goes on in the distribution center!! Is it all automated? Do they have underpaid illegal aliens doing everything? Who puts the DVDs in the wrappers? How do they get it all right? And who inputs it all into the computers so I know when I'm getting my DVDs?

    I think I would even pay for a visit.
    Would make a great prize for some sort of contest, wouldn't it?

  2. This blog has lots of links to photos and articles about how Netflix distribution centers operate. The most recent one, with video, is here.

  3. I've always thought it would behoove them to have drop-off facilities in those cities with DCs. And while traffic jams, etc could be problematic, it wouldn't be any more than a large post office or unique business, like Costco or a popular mall. Just as people (smart ones, anyway) learn not to go to Wal-Mart on a Saturday afternoon, they would eventually learn when to go (or not go) to a Netflix drop-off location. Even if they teamed up with a partner, like The UPS Store (not bloody likely) or FedExKinko's, it would still seem advantageous for their customers, at least.

    What I suspect the real reason is their marketing agreement with the US Postal Service, who would lose money on any such service. If Blockbuster ever works out the kinks with their online service, this could be a major advantage over Netflix.

  4. This is really silly logic. If Netflix processes 30-50k DVDs per day, then each distribution center would only handle ~1k on average. Of those 1000, the vast majority of people would still opt to drop it off in their mailbox. Let's give a ridiculously conservative estimate and say that only half of people would still mail their returns in, and the other half would opt to drop off. Of those 500 people, they would be spread out throughout the day, with certain "rush hour" periods of morning, noon and 5-6pm. So, there would be about 100 people during each rush hour and the rest about 10-20 people per hour. Hardly "crippling". And as for parking, there is no need for people to get out of their cars. They can have multiple drive-up boxes. Even without drive-up boxes, people would only need to park for 2 minutes, so 3-4 parking spots would suffice.

    Of course, in reality there would be a lot less people dropping off, because only a small percentage work or live close enough to a distribution center for it to be worth it for them to drive there rather than drop it off in a local mailbox. The reality is, they don't allow it because there is no benefit in it for them at all.

  5. That was a typo. I didn't mean Netflix processes 30-50K per day. I meant each distribution center averages 30-50k per day. Netflix as a whole processes over 1.2 million discs per day, and there are over 37 distribution centers.

  6. Its also a matter of personal economics. Most warehouses are located in the industrial part of cities which are usually far away from everyone. If you figure about 20 miles to drive there and back, its 30-45 minutes of your time and at least $2 in gas. If you do that for every movie you've just doubled your subscription cost. You might as well use a rental store or video on demand then.