Amazon (AMZN) to Boost Fulfillment Strength With Latest Move

Amazon AMZN continues to hold the leading position in the e-commerce market on the back of its robust retail strategies, solid momentum among third-party sellers, advanced technologies and, most importantly, expanding fulfillment network.

The company has leased a warehouse space in Bridgewater, MA, in sync with its growing efforts to bolster its distribution strength.

Notably, the company already operates two warehouses — one in Fall River and another in Stoughton.

The underlined warehouses will expand the e-commerce giant’s capability of fulfilling the increasing online customer orders on time.

This, in turn, will likely contribute to the company’s online retail business growth as well as drive its customer momentum.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Amazon to Gain

Notably, the company has been spending heavily to build and modernize fulfillment centers and delivery stations primarily to cut shipping costs and speed up delivery. This has been contributing to the performance of its online retail business — the backbone of its overall business. This, in turn, has aided the company in gaining investor confidence.

Coming to the price performance, Amazon has gained 5% on a year-to-date basis against the industry’s decline of 34.4%.

The momentum is likely to continue driven by the company’s aggressive retail initiatives and strategic plans.

Hence, the latest move is likely to benefit the operation of Amazon.

Wrapping Up

The world’s largest online retailer has been strengthening its presence worldwide.

In our view, Amazon must maintain its U.S. market share, while expanding globally to retain its leading position. To this end, the company needs to continue investing more in fulfillment centers as these giant warehouses help online retailers store and ship products, and handle returns quickly.

Strengthening the delivery system remains crucial for the e-commerce giant in this fast-paced world.

These are important for providing the standard of service that customers have started expecting from Amazon. We believe that all these will continue to aid the company’s dominance in the highly competitive e-commerce market.

Escalating expenditure related to fulfillment remains another major concern for Amazon. Notably, the company’s cost of fulfillment increased 25.8% year over year to $18.5 billion in third-quarter 2021.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the retail-wholesale sector are Boot Barn BOOT, Target TGT and Costco Wholesale COST. While Boot Barn currently sports a Zacks Rank #1 (Strong Buy), Target and Costco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Boot Barn has gained 169.5% on a year-to-date basis. The long-term earnings growth rate for the BOOT stock is currently projected at 20%.

Target has gained 25.2% on a year-to-date basis. The long-term earnings growth rate for the TGT stock is currently projected at 14.4%.

Costco has gained 46.1% on a year-to-date basis. The long-term earnings growth rate for the COST stock is currently projected at 8.78%.

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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 Nasdaq, Inc.