What E-Commerce Companies Need to Know About Warehouse Space
E-commerce operators increasingly prioritize warehouse locations close to population centers to meet compressed delivery windows.
Updated August 2026
Because e-commerce companies compete on speed, the warehouses and distribution centers they operate from play a big part in how fast an order can move from a rack to a doorstep—and how much that trip costs. Here's what e-commerce operators need to know about industrial real estate site selection, industrial building specs and market trends before signing a lease.
E-Commerce Warehouse Space at a Glance
- E-commerce warehouses process a higher volume of smaller, individual orders than traditional distribution facilities, which shapes staffing and building specs more than square footage alone.
- Many e-commerce tenants now lease across a tiered network of facility types rather than one large warehouse.
- Clear height, dock door ratio and power capacity are among the specs that come up most often in e-commerce lease negotiations.
- Peak-season demand swings and returns processing put unique pressure on labor and layout that bulk distribution tenants don't face.
- Link Logistics warehouses and industrial properties are home to e-commerce tenants across all facility tiers, from micro-fulfillment space to regional distribution centers.
What Is an E-Commerce Warehouse?
An e-commerce warehouse is used to store, pick, pack and ship goods ordered online. Compared with a traditional distribution warehouse, an e-commerce facility typically handles a higher volume of smaller, individual orders versus bulk shipments to retail locations. While order volume changes how a building is used day to day, that activity doesn't necessarily change how the warehouse is built. The best e-commerce warehouse spaces combine high-efficiency layouts with proximity to transportation hubs and consumers.
What Are the Biggest Operational Challenges for E-Commerce Warehouses?
E-commerce operations face a distinct set of pressures that don't map neatly onto traditional distribution. Four challenges tend to shape leasing and building decisions most:
Peak-season volume swings
Order volumes during holiday and promotional periods can dwarf baseline activity, which means e-commerce tenants often staff and design for their busiest weeks, not their average ones. That drives demand for more car parking, more dock capacity and layouts flexible enough to absorb temporary labor at scale.
Returns and reverse logistics
Online order return rates run well above brick-and-mortar retail, and processing returned goods—inspecting, restocking or rerouting them—requires space and workflow that a purely outbound distribution operation doesn't need. Some e-commerce tenants dedicate separate space or shifts specifically to returns processing.
SKU proliferation and pick complexity
E-commerce catalogs tend to carry more individual SKUs than bulk distribution operations, and each order can include a unique mix of items. That pushes tenants toward denser racking, more sophisticated pick paths and, in some cases, automation to manage complexity that scales with catalog size rather than order size.
Compressed delivery windows
As consumers increasingly prefer faster delivery, e-commerce tenants have less time to move an order from click to doorstep. That timeline pressure is often what drives a company from a single large warehouse toward a distributed network of smaller, closer-in facilities.
These considerations are why network design and building specs are inseparable questions for most e-commerce tenants. The right facility depends on which of these challenges a given site is meant to solve.
How Are E-Commerce Networks Structured?
Rather than one large warehouse, most e-commerce operators now lease across a mix of facility types, each solving a different part of the challenges above.
“E-commerce is built around proximity to the end consumer, since faster delivery windows require distribution points located closer to where customers live,” Brandon Page, head of Leasing and Customer Solutions at Link Logistics, said in an August 2026 interview. “As delivery expectations compress toward same-day and next-day service, companies increasingly need more locations spread closer to their customer base rather than fewer, centrally located warehouses.”
| Facility Type | Primary Function | Typical Role in Network | Specs to Prioritize |
| Regional distribution center | Bulk inventory storage and replenishment for a broader network | Feeds smaller facilities closer to consumers | High clear height, large footprint, strong trailer staging |
| Last-mile fulfillment center | Order picking, packing and shipping to end consumers | Positioned within dense population centers for speed | High dock door ratio, ample car parking, labor access |
| Micro-fulfillment / urban infill | High-turnover inventory for fastest delivery | Shortest last leg of the network, often same-day radius | Smaller footprint with efficient layout, strong labor pool |
| Returns processing | Inspecting, restocking or rerouting returned goods | Can be standalone or integrated into an existing facility | Flexible layout, labor availability, dock capacity |
What Are the Top Factors E-Commerce Companies Consider When Leasing Warehouse Space?
E-commerce operators typically aim to solve for network considerations first, followed by the physical structure, with most tenants asking this broader question first: Where does this warehouse location sit relative to the consumers, labor pool and transportation routes I need to optimize my operations?
Common drivers behind market and site selection include:
- Population density and delivery radius: Space closer to dense residential areas shortens last-mile routes and supports faster delivery.
- Labor availability: E-commerce operations are often labor-intensive, especially during peak season, so access to a reliable workforce can matter as much as square footage.
- Highway and interstate access: Proximity to major arteries reduces drive time to regional population centers and supports multi-market distribution from a single node.
- Network design: Many e-commerce companies are building out a tiered network of regional and last-mile infill warehouses rather than a single large facility, so a given site's role in that broader network is a critical differentiator.
- Existing competitor and partner clustering: Markets that already host other logistics and e-commerce operators tend to have the labor pools and infrastructure this sector depends on.
What Do E-Commerce Tenants Look for in a Building and Site?
E-commerce operators tend to be specific about physical building requirements because their throughput volumes and staffing levels can put real pressure on a building's layout. From a landlord's perspective, the specs that come up most often include:
- Clear height: Taller clear heights support higher racking and denser storage, which matters when order volume is high relative to footprint.
- Dock door ratio: A higher ratio of dock doors to building square footage supports faster loading and unloading during peak shipping periods.
- Trailer and car parking: E-commerce operations often run large workforces across multiple shifts, so ample car parking is as important as trailer staging space.
- Column spacing and floor load capacity: Wider column spacing gives operators more flexibility in how they lay out conveyor systems, racking and pick paths.
- Power capacity: Buildings with sufficient electrical infrastructure are better positioned to support material handling equipment and, where a tenant chooses to add it, warehouse automation.
- Site expansion potential: Rapidly scaling e-commerce tenants often value room to expand within a market, whether through additional space at the same site or nearby availabilities.
How Do Reshoring and Demand Shifts Affect E-Commerce Space Needs?
Two forces are reshaping how much and what kind of e-commerce space companies need. First, a broader push toward reshoring and nearshoring manufacturing is adding new industrial demand in some markets that also serve e-commerce distribution, which in those markets can increase competition for space in the same corridors. Second, expectations around delivery speed continue to push e-commerce networks toward more, smaller facilities positioned closer to end consumers.
“Historically, transportation costs and labor availability and cost have been the two largest expenses associated with operating a warehouse—well ahead of rent,” Brandon Page, who leads the Leasing and Customer Solutions functions at Link Logistics, said in an August 2026 interview. “A location closer to the end consumer reduces distribution costs, and proximity to a strong labor pool keeps a facility adequately staffed.”
Transportation costs alone typically account for between 50 and 80% of total operating expenses for warehouse distribution, according to the Link Logistics Research & Analytics team.
Together, these shifts mean e-commerce tenants are often evaluating markets earlier and locking in space further ahead of need than they may have in past years, particularly in markets where reshoring-driven manufacturing demand is also competing for available inventory.
The scale of the underlying shift is generational as much as cyclical: "By 2040, over half of the labor force will have been born post-Amazon,” notes Link Logistics CEO Luke Petherbridge.
Frequently Asked Questions
What should e-commerce companies look for in a warehouse?
E-commerce companies typically prioritize clear height, a strong ratio of dock doors to square footage, ample trailer and car parking, and enough power capacity to support material handling equipment. Proximity to population centers and major highways matters as much as the building itself, since it determines how quickly orders can reach customers.
How much warehouse space does an e-commerce company need?
Space needs vary widely based on order volume, product size and how many facilities are in a company's network—there's no single benchmark figure. Many e-commerce operators are shifting toward multiple smaller, well-positioned facilities rather than one large warehouse, which changes the space calculation from a single-building question to a network question.
What is the difference between an e-commerce warehouse and a traditional distribution warehouse?
An e-commerce fulfillment warehouse generally processes a higher number of smaller individual orders, while a traditional distribution warehouse often ships larger bulk quantities to retail locations. This difference affects day-to-day operations and staffing more than it affects physical building requirements.
Does warehouse automation affect what building an e-commerce company should lease?
Warehouse automation plans can affect e-commerce leasing decisions. Companies planning to add automation typically want higher power capacity, wider column spacing and sufficient floor load capacity to support that equipment. The choice of which automation or warehouse management system to use is specific to each operator—Link Logistics focuses on providing the building characteristics that keep that option available.
Why do e-commerce companies need a network of facilities instead of one warehouse?
Compressed delivery windows and peak-season volume swings are difficult to solve from a single location. A tiered network—regional distribution centers feeding last-mile and micro-fulfillment facilities—lets e-commerce operators put inventory closer to consumers without concentrating all of their risk and cost in one building.
Warehouse Space for E-Commerce Companies
Link Logistics owns and operates more than 400 million square feet of infill warehouse space across 40-plus North American markets, with e-commerce tenants represented across the portfolio's full range of facility types and sizes.
For more on industrial real estate fundamentals relevant to e-commerce warehouse tenants, explore our Industrial Real Estate 101 series:
