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Amazon Opens a Sorting Facility, Expands Birmingham Presence

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Amazon.com, Inc. (AMZN - Free Report) has opened a sortation facility in the city of Birmingham.

The new sortation center is located in north Birmingham and spans 18,000 square feet. The facility, which employs 35 to 40 full-time and part-time workers, is operated by Amazon Logistics.

The sortation center organizes shipments from the larger facility and organizes the same by ZIP codes for ensuring faster deliveries.

The opening of a sorting facility comes at an opportune time, as the holiday season is heading up. The latest move underscores the company’s two basic strategies of continual expansion and increased focus on fulfilling customer needs.

Shares of Amazon have gained 31.2% against its industry’s decline of 0.4% on a year-to-date basis.

Expansion Continues

The company has been boosting investments in Bessemer for ensuring better delivery to customers.

Reportedly, the construction of a huge fulfillment center in Bessemer is already on its way. The project involves an amount of approximately $325 million.

The move is in line with Amazon’s motto of providing better services to customers, accommodating rapid growth and leveraging the area’s diverse high-technology talent pool.

Bottom Line

Amazon has been pumping in more money to ensure faster delivery of goods to customers. From a span of a day to two hours, two hours to 15 minutes and 15 minutes to two minutes, Amazon has been cutting down on its delivery time for Prime members.

The e-commerce behemoth set the ball rolling by playing to its strength — a strong delivery wing — when it started offering a free two-hour delivery service from Whole Food stores to its Prime members.

Apart from this, Amazon Prime members already enjoy free two-day and one-day deliveries. Also, Amazon Restaurants offer one-hour delivery for Prime members from popular restaurants. AmazonFresh grocery delivery service can fulfill orders within 15 minutes if users pay $15 per month.

The company has been expanding on a global basis. To this end, it is investing more in fulfillment and sortation, as well as technology and content. Although increased expenses may hurt Amazon’s bottom line in the near term, we believe that these measures 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

Amazon currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include AMETEK, Inc. (AME - Free Report) , QuinStreet, Inc. (QNST - Free Report) and Stamps.com Inc. (STMP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for AMETEK, QuinStreet and Stamps.com is currently pegged at 11.18%, 25% and 15%, respectively.

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