Amazon.com Inc. AMZN, the world's largest online retailer, recently announced that it is hiring new workers for its order-fulfillment centers across the U.S.
The company said that it will add more than 6000 full-time jobs to meet the increasing demand for its products.
The new employees will focus more on picking, packing and shipping customer orders. Amazon stated that the company provides great pay, including health care and other full-time benefits. In addition, Amazon offers programs like Career Choice to help employees pursue courses related to fields that are in demand.
Amazon has been strengthening its presence in the domestic market. Currently, Amazon has more than 50 fulfillment centers in the U.S.
Fulfillment centers are giant warehouses that help Amazon and other online retailers to store products, ship them and handle returns quickly. These are important for providing the level of customer service that Amazon customers have come to expect of the company.
The recent surge in recruitment is the result of the company’s decision to expand its fulfillment centers all around the country. In order to deliver goods on time, the company has been spending heavily on its new fulfillment centers.
The need for fulfillment center expansion is rising due to the growing demand for online shopping and the ever-increasing needs of Internet users. Prompt and accurate delivery of products is very important for the success of an online retail company.
Third parties also use Amazon’s warehouses and shipping services. Small retailers that are unable to provide relatively cost-efficient shipping are also signing up for Amazon’s fulfillment services. These help them to increase their revenue base and drive expansion.
In our view, Amazon must maintain its U.S. market share while expanding globally to retain its leadership. For this, the company needs to invest more in fulfillment as well as technology and content, especially in international markets with lesser penetration and higher growth rates.
Though the increased expenses could hurt the company’s bottom line in the near term, we believe these are necessary to maintain its dominance in this highly competitive market.
Currently, Amazon has a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the same space include PetMed Express, Inc. PETS, Orbitz Worldwide OWW and GaiamInc GAIA. All these stocks carry a Zacks Rank #2 (Buy).
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