In a bid to meet increasing demand for online shopping in the upcoming holiday season, Amazon.com Inc. (AMZN - Free Report) announced its plan to build its third Nevada fulfillment center in North Las Vegas.
The other two existing Nevada fulfillment centers are located in Reno and North Las Vegas. These employ more than 1,500 full-time hourly associates.
According to Amazon, the new facility spanning 800,000 square feet will create more than 1,000 full-time jobs. It will focus primarily on larger consumer items such as big screen televisions, kayaks and patio furniture.
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.
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 from 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. The need to expand fulfillment centers has been fuelled by growing demand for online shopping. Prompt and accurate delivery of products is crucial to the success of online retail companies.
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.
Currently, Amazon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Cognex Corporation (CGNX - Free Report) , Itron, Inc. (ITRI - Free Report) and Teradyne Inc. (TER - Free Report) with 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.
Teradyne Inc. delivered a positive earnings surprise of 19.26% in the trailing four quarters.
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