Markets

Amazon's 2 Fulfillment Centers in Ohio to Create 2,000 Jobs

Amazon.com Inc.AMZN , the world's largest online retailer, recently announced that it plans to open two fulfillment centers in Obetz and Etna, OH.

The more-than-800,000 square-foot facility in Etna Township will be developed by Prologis, while Duke Realty will develop the Obetz center covering an area in excess of 1 million square feet. According to Amazon, the facilities will create a total of 2,000 full-time jobs.

Amazon stated that it offers better salaries, including health care and other full-time benefits like health insurance and a 401(k) retirement plan. In addition, the retail giant offers bonuses, company stock awards and other full-time benefits.

Amazon plans to expand its fulfillment centers across the country. The holiday season is crucial for the company as sales in November and December account for a major part of its annual revenue. Therefore, the company has been spending heavily on building fulfillment centers to ensure on-time delivery of goods.

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 company.

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.

Third parties also use Amazon's warehouses and shipping services. Small retailers that are unable to provide relatively cost-efficient shipping are also signing up for Amazon's fulfillment services. These help them to increase their revenue base and drive expansion.

In our view, Amazon must maintain the U.S. market share while expanding globally to retain its leadership. For this, the company needs to invest more in fulfillment as well as technology and content, especially in international markets with lesser penetration but higher growth rates.

Though the increased expenses could hurt the company's bottom line in the near term, we believe that these are necessary to maintain its dominance in this highly competitive market.

Currently, Amazon has a Zacks Rank #2 (Buy).

Stocks to Consider

Other well-ranked stocks in the same space are Stamps.com Inc. STMP , Travelport Worldwide Limited TVPT and Blue Nile Inc. NILE . While Stamps.com and Travelport Worldwide sport a Zacks Rank #1 (Strong Buy), Blue Nile carries a Zacks Rank #2.

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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.


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

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