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Amazon to Spread in Illinois with 2 More Fulfillment Centers
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In a bid to meet increasing demand for online shopping, Amazon.com Inc. (AMZN - Free Report) announced its plan to open two more fulfillment centers in Aurora, IL.
Shares of Amazon have been steadily treading higher on a year-to-date basis. The stock generated a return of 13.33% compared with the Zacks Electronic Commerce industry’s gain of 7.50%.
Two More Fulfillment Centers in Illinois
The new facility in Aurora will spread across nearly 1 million square foot feet and will focus more on picking, packing and shipping smaller items, such as books, electronics and toys, to name a few. The other facility, spanning 400,000 square feet, will specialize in handling larger items like big-screen televisions.
These two facilities together will create more than 1,000 additional full-time jobs in the state.
Amazon already opened eight fulfillment centers in Illinois in the last two years. Currently, the company has fulfillment centers operating in Edwardsville, Joliet and Romeoville with another fulfillment center under construction in Monee. Once construction is complete, Amazon will be able to create more than 7,000 full-time jobs in the state.
Amazon stated that it pays competitive wages, and gives healthcare and other full-time benefits. In addition, the company offers programs, like Career Choice, to help employees pursue courses related to fields that are in demand. The online giant also gives other benefits like generous maternity and parental leaves.
Akash Chauhan, Amazon’s vice president of North American operations said, “In just over two years, Illinois has proven itself to be an ideal location from which Amazon can continue offering customers our vast selection and superfast shipping speeds.”
What are Fulfillment Centers?
Fulfillment centers are giant warehouses that help online retailers store and ship products and handle returns quickly. These are important for providing the level of service that customers have come to expect of Amazon.
Over the past few years, Amazon has invested heavily in setting up fulfillment centers across the country to cut shipping costs and speed up delivery. Prompt and accurate delivery of products is crucial to the success of the online retail companies.
Small retailers that are unable to provide relatively cost-efficient shipping are also signing up for Amazon’s fulfillment services. Third parties also use Amazon’s warehouses and shipping services. These help online retailers to enhance their revenue base and drive expansion.
Our Take
The world’s largest online retailer has been strengthening its presence all over the world. To date, Amazon has created millions of full-time jobs and continues to hire manpower to meet growing customer demand.
In our view, Amazon must maintain its U.S. market share while expanding globally to retain its leading position. For this, the company needs to invest more in fulfillment as well as technology and content, especially in international markets with less penetration and higher growth rates.
Though 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.
Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.
Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.
TiVo Corporation delivered a positive earnings surprise of 97.76%, on average, in the trailing four quarters.
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Amazon to Spread in Illinois with 2 More Fulfillment Centers
In a bid to meet increasing demand for online shopping, Amazon.com Inc. (AMZN - Free Report) announced its plan to open two more fulfillment centers in Aurora, IL.
Shares of Amazon have been steadily treading higher on a year-to-date basis. The stock generated a return of 13.33% compared with the Zacks Electronic Commerce industry’s gain of 7.50%.
Two More Fulfillment Centers in Illinois
The new facility in Aurora will spread across nearly 1 million square foot feet and will focus more on picking, packing and shipping smaller items, such as books, electronics and toys, to name a few. The other facility, spanning 400,000 square feet, will specialize in handling larger items like big-screen televisions.
These two facilities together will create more than 1,000 additional full-time jobs in the state.
Amazon already opened eight fulfillment centers in Illinois in the last two years. Currently, the company has fulfillment centers operating in Edwardsville, Joliet and Romeoville with another fulfillment center under construction in Monee. Once construction is complete, Amazon will be able to create more than 7,000 full-time jobs in the state.
Amazon stated that it pays competitive wages, and gives healthcare and other full-time benefits. In addition, the company offers programs, like Career Choice, to help employees pursue courses related to fields that are in demand. The online giant also gives other benefits like generous maternity and parental leaves.
Akash Chauhan, Amazon’s vice president of North American operations said, “In just over two years, Illinois has proven itself to be an ideal location from which Amazon can continue offering customers our vast selection and superfast shipping speeds.”
What are Fulfillment Centers?
Fulfillment centers are giant warehouses that help online retailers store and ship products and handle returns quickly. These are important for providing the level of service that customers have come to expect of Amazon.
Over the past few years, Amazon has invested heavily in setting up fulfillment centers across the country to cut shipping costs and speed up delivery. Prompt and accurate delivery of products is crucial to the success of the online retail companies.
Small retailers that are unable to provide relatively cost-efficient shipping are also signing up for Amazon’s fulfillment services. Third parties also use Amazon’s warehouses and shipping services. These help online retailers to enhance their revenue base and drive expansion.
Our Take
The world’s largest online retailer has been strengthening its presence all over the world. To date, Amazon has created millions of full-time jobs and continues to hire manpower to meet growing customer demand.
In our view, Amazon must maintain its U.S. market share while expanding globally to retain its leading position. For this, the company needs to invest more in fulfillment as well as technology and content, especially in international markets with less penetration and higher growth rates.
Though 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.
AMAZON.COM INC Price and Consensus
AMAZON.COM INC Price and Consensus | AMAZON.COM INC Quote
Zacks Rank & Stocks to Consider
Currently, Amazon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Cognex Corporation (CGNX - Free Report) TiVo Corporation and Itron, Inc. (ITRI - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.
Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.
TiVo Corporation delivered a positive earnings surprise of 97.76%, on average, in the trailing four quarters.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>