), the world's largest online retailer plans to hire 7,000
workers for its warehouse and order-fulfillment centers.
The company said that it will add 5,000 full-time jobs and
2,000 customer-service staff, including part-time and seasonal
workers to meet the increasing demand for its products.
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
The recent surge in recruitment comes from 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 new fulfillment centers. A Bloomberg report
states that Amazon plans to add 5 more facilities this year,
after opening 20 fulfillment centers in 2012.
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.
Also, small retailers find it difficult to provide their
customers with relatively cost-efficient same day/next day
shipping like Amazon. Hence, they have also been signing up for
fulfillment by Amazon, where the company stores their products in
its warehouses, ships them and makes those items eligible for
Amazon Prime free two-day shipping.
We believe that for Amazon to remain at the top, it is
important to maintain its U.S. market share and expand globally.
For this Amazon needs to invest more in both fulfillment and
technology and content, especially in international markets,
where growth rates are likely to be higher.
Though the increased expenses could hurt the company's bottom
line in the near term, we believe these investments are necessary
to maintain its dominance in this highly competitive market.
Currently,Amazon shares retain a Zacks Rank #5 (Strong Sell).
Other stocks that have been performing well and are worth a look
Orbitz Worldwide Inc.
), all carrying a Zacks Rank #2 (Buy).
AMAZON.COM INC (AMZN): Free Stock Analysis
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