MIT Sloan Management Review Article on Beyond the Speed-Price Trade-Off

Advances in inventory and sales analytics make it possible to deliver products both cheaply and quickly, meeting the demands of today’s consumers.

In the early days of online retailing, e-commerce companies fulfilled consumer demand from a small number of large-scale warehouses that carried similar catalogs of items. Retailers stocked inventory for low-volume products in as few locations as possible while maintaining service levels that met customer expectations. It was a way to keep inventory costs low and take advantage of the economies of scale that large fulfillment centers provide. Since consumers were willing to wait for deliveries, proximity and speed were less important than cost savings.