Yahoo Finance Amazon to Expand in Texas with Eighth Fulfillment Center
Amazon.com Inc. AMZN recently announced that it will build its eighth Texas fulfillment center in Coppell. This will be Amazon’s second fulfillment center in Coppell.
Five fulfillment centers in Haslet, Dallas, Fort Worth, Coppell and Schertz are already operational. Two other facilities in San Marcos and Houston are still under construction.
According to Amazon, the new facility spanning one million square feet will create hundreds of 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.
The world’s largest online retailer has been strengthening its presence in Texas where it has invested millions of dollars. To date, Amazon has created over 10,000 full-time jobs in the state and continues to hire manpower to meet growing customer 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 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. 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.
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 in enhancing their revenue base and driving expansion.
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.
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Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Stamps.com Inc. STMP and Autobytel Inc. ABTL, sporting a Zacks Rank #1 (Strong Buy), and PetMed Express PETS, carrying a Zacks Rank #2 (Buy).
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