Not even Walmart has enough cash available to compete with Amazon's e-commerce fulfillment empire

WalmartFREDERIC J. BROWN/AFP/Getty Images

  • Walmart and Amazon are duking it out for domination in the American e-commerce industry.
  • A big new report from Recode today shows that Walmart's e-commerce losses are pushing past $1 billion.
  • One area in which Walmart is losing out to Amazon is its ability to build fulfillment centers to efficiently deliver your online orders, Recode says.
  • Both companies' financial statements confirm that Walmart doesn't have the cash flow of Amazon, a Business Insider analysis found.
  • Visit Business Insider's homepage for more stories.

Walmart became the largest retailer in the world in part thanks to its logistics ingenuity - it's arguably one of the largest trucking companies in America, with drivers paid at least $87,500 from day one, and has a vast network of warehouses with ultra-high standards.

But Walmart's e-commerce push has been hamstrung in part because of its lack of e-commerce fulfillment centers, a comprehensive report from Recode's Jason Del Rey found on Wednesday.

Amazon has 110 fulfillment centers in the US to Walmart's 20, Recode reported. Building more of those fulfillment centers requires serious investment. Amazon's newest fulfillment center, which will open early July on the outskirts of New Haven, Connecticut, cost some $250 million to build.

Amazon did not respond to Business Insider's inquiry. Walmart said it was not commenting on the Recode report.

Read more: A key metric in FedEx's financial statements underscores why the shipping giant dropped Amazon as a customer

Logistics in general is pricey - Amazon said its push for one-day delivery will cost the company $800 million in investments this year. But, as Del Rey noted, Amazon can bankroll these pushes through Amazon Web Services and its ad business.

Walmart, on the other hand, doesn't have that abundant flow of cash, Recode reported. Sources told Recode that Walmart execs have agreed to expand its e-commerce warehouse footprint.

A Business Insider analysis of both companies' SEC filings bolsters that claim. Walmart's current ratio, which is a measure investors often use to see if a firm has enough cash to meet its short-term debts, has hovered around 0.75 this year and last year. Amazon's current ratio was 1.1 in 2019 and 2018.

Investors want to see a current ratio above 1.0. That shows that the company has more cash on hand than debts that need to be paid off in the last year. Below 1.0 shows that short-term liabilities outweigh assets.

Do you work in logistics and have a story to share with Business Insider? Email the reporter at rpremack@businessinsider.com.

Read the entire Recode article here »

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