Amazon Workers on Strike in Germany - Analyst Blog

A A A Inc. ( AMZN ), the world's largest online retailer, is facing a strike by its German employees for higher pay and a better work environment.

Earlier this year, German labor union - Verdi - launched a one-day strike at two major distribution warehouses - Bad Hersfeld and Leipzig - and stated that it would continue till Christmas if their demand is not met. As of now, Verdi said that workers would strike in Amazon's logistic centers in Bad Hersfeld, Leipzig and Graben. Additionally, a delegation of German workers will protest at Amazon's headquarters in Seattle, helped by the U.S. workers unions.

The demands of the German workers include the right for collective bargaining, proper working conditions and regard for their efforts. However, Amazon claims that the current wages are above-average in the logistics industry.

Germany is Amazon's biggest European market, with sales reaching more than €6.5 billion in 2012. Though the company assured that previous strikes had not affected deliveries, the current strike could be a matter of concern. Christmas is the peak shopping period and any strike during this period could impact Amazon's sales and profit figures.

Seeing the increasing problems in Germany, in October, Amazon announced its plan to open two new fulfillment centers in the Czech Republic by the end of 2014 to cater to the increasing demand across Europe.

The growing demand for online shopping has led to the need to expand the fulfillment centers.

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's customers have come to expect of the company.

As accurate delivery of products is very important for the success of an online retail company, these strikes could delay product delivery during the peak holiday season, which in turn could translate into losses for the company.

Currently, Amazon's shares have a Zacks Rank #3 (Hold). Other better-ranked stocks that have been performing well include Autobytel Inc. ( ABTL ), Geeknet Inc. ( GKNT ) and Inc ( STMP ). All these stocks carry a Zacks Rank #1 (Strong Buy).

AUTOBYTEL INC (ABTL): Free Stock Analysis Report

AMAZON.COM INC (AMZN): Free Stock Analysis Report

GEEKNET INC (GKNT): Free Stock Analysis Report

STAMPS.COM INC (STMP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ABTL , AMZN , GKNT , STMP

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