Amazon To Expand In Kansas With A New Fulfillment Center

In a bid to meet ever-increasing demand for online shopping, Amazon.com Inc. (NASDAQ:AMZN) recently announced its plan to open a fulfillment center in Kansas City. Currently, the company operates facilities in Lenexa, KS and there is a facility coming up in Edgerton, also in Kansas.

The new facility, spread across 855,000 square feet, will create more than 1,000 full-time jobs. The facility will focus more on picking, packing and shipping smaller items, such as books, electronics and toys, to name a few.

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

Amazon plans to expand its fulfillment centers across the country. In recent months, the company spent heavily on ensuring on-time delivery of goods and reduction of logistical costs by adding a fleet of cargo trucks and opening smaller distribution centers to handle last-minute deliveries to customers’ doorsteps.

Just last month, the company announced its plan to open a fulfillment center in Braselton, GA, spanning 600,000 square feet. The center is expected to create 500 new full-time jobs.

Fulfillment centers are giant warehouses that help online retailers to store and ship products, and handle returns quickly. Prompt and accurate delivery is integral to the success of an online retailer.

In our view, Amazon must maintain 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. Despite the near-term pressure on the bottom line, these are necessary to maintain the company’s dominance in this highly competitive market in the long run.

Amazon is expected to report its second-quarter earnings on July 28.

Currently, Amazon carries a Zacks Rank #3 (Hold).

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