Why is Amazon headquartered in Seattle?

Question: Why did Jeff Bezos, then working in New York, establish his startup all the way across the country in Seattle, Washington?
Answer: Because Washington’s small population meant buyers from the more populous states would not need to pay sales taxes thereby reducing Amazon’s costs.

Welcome to Costs Matter, a series that asks different questions all of which have the same answer: to better manage costs. The costs are frequently economic though not always. The series focuses narrowly on the impact of costs. It does not claim these costs are the sole cause. To read more in the series, visit https://medium.com/galileo-onwards/costs/home.

My answer is taken directly from Brad Stone’s great book, The Everything Store (2013). Below I quote from the book:

Bezos chose to start his company in Seattle because of the city’s reputation as a technology hub and because the state of Washington had a relatively small population (compared to California, New York, and Texas), which meant that Amazon would have to collect state sales tax from only a minor percentage of customers…. [T]he University of Washington produced a steady stream of computer science graduates. Seattle was also close to one of the two big book distributors: Ingram had a warehouse a six-hour drive away, in Roseburg, Oregon. [link to book publisher]