The Beginning

Our journey starts in receiving, this part of the process actually has nothing specifically to do with your order but what's done here makes the rest of the process infinitely easier. Shipping trucks will pull up to the warehouse and unload cargo pallets filled with computer products. A pallet is a wooden or plastic platform that can be picked up using a forklift; palletized cargo is cargo placed on a pallet, which is how Newegg's inventory is shipped to them.

Once the pallets are received and unpacked they are sent off to receiving, which is a mere 30 feet away. The pallets don't just magically appear at Newegg, they are ordered from a set of offices and cubicles attached to the warehouse:


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What you see in the picture below are a few Newegg employees at computer terminals surrounded by hundreds of boxes. What they are doing is scanning each and every item that comes into Newegg. If it's a retail product, such as a boxed AMD CPU, then the retail barcode is used and information is attached to it. If it is an OEM product, such as an OEM AMD CPU, then Newegg will create their own barcode for the product. The bar-coding process is quite important because Newegg's system actually associates a great deal of information with each barcode.


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For every product that's scanned not only are its specifications entered into the system but so are its physical dimensions and the weight of the product. The importance of this is that when your order is placed, Newegg's system knows exactly what size box(es) to ship your order in as well as how heavy your order will be. After your order is complete and before it is boxed up, the weight of the order (as well as the barcodes on each item) is checked against Newegg's database to make sure that you are indeed getting what you ordered.

In the far left corner of the picture above is a station where Newegg will take pictures of any new products coming into their warehouse, which end up being listed along with the product on their website.

After the products are received by Newegg, they are then sent to one of two places - the staging area or "the racks" where actively shipping product is organized and ready for orders that are being placed immediately.

The picture above is closest to the receiving area, and thus is the emptiest of the staging area. Newegg's facility here is no where near full capacity but also important is the fact that Newegg doesn't keep product for very long at all, which allows them to usually take advantage of the best pricing possible and in turn offer highly competitive prices to their customers.

The farther away you get from the receiving area, the more crowded the warehouse becomes:


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  • Postoasted - Tuesday, February 14, 2006 - link

    First off great article. Have never bought from Newegg before, but after reading about it here I feel assured that they're not some fly-by-night chop shop. As a potential customer the fact that my package will come with peanut styrofoam is a big negative. But if the price is right I guess I can live with it.
  • allometry - Wednesday, February 15, 2006 - link

    I'm not sure if NewEgg is using the biodegradable peanuts made from a corn starch base. When you finally do place an order, grab one of those peanuts and run it under some water to see if it disapears.
  • plonk420 - Tuesday, February 14, 2006 - link

    have you a solution as versitile as peanuts? i sure don't
  • plonk420 - Tuesday, February 14, 2006 - link

    how soon until they pay off the setup and their prices can go down to what they were when they first started? i miss those days...
  • lsman - Wednesday, February 15, 2006 - link

    Not when they are expanding to like China and rest and have to pay for those. :D
  • shabby - Tuesday, February 14, 2006 - link

    Looks like a basement operation to me, they sure fooled me....
  • Zebo - Tuesday, February 14, 2006 - link

    Always like to read about orgins. Maybe next time. I've never had a complaint with newegg but there are others "just as good" and cheaper too such as Mwave.com Zipzoomfly.com for example. What really sets newegg apart is thier fantastic database for customers to search for exactly the prodcuts they are looking for and once found get a set of wonderful 360 degree pictures of the product! Great job!
  • Hondaman4ever - Tuesday, February 14, 2006 - link

    This is a good article for those Industrial Engineers, pretty interesting facility layout.
  • JumpyBL - Tuesday, February 14, 2006 - link

    Wow, great article. I used to do recieving work and Newegg's setup really makes me want to work there, looks fun, scanning in all the new products and handling tech stuff all day. Looking at all the CPU and memory products laying about is enough to give any tech enthusiast a stiff one. Thanks for the article and the contest Anandtech.
  • thatsright - Tuesday, February 14, 2006 - link

    GREAT Article!!

    One of those rare AT article that held my attention 100%, and I read EVERY page.

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