Amazon AMZN has commenced operations at its new fulfillment center, which is based in Fargo, ND, in order to meet the growing online demand.
The new facility is marked as the first such establishment of Amazon in the state of North Dakota, spanning more than 1 million square feet.
The company intends to create well-paid jobs in the particular state on the back of the fulfillment center under review.
Amazon will offer wages starting at $15 an hour, including comprehensive benefits and parental paid leave of up to 20 weeks.
The new facility is being leveraged to pick, pack and ship large-sized heavy customer items such as outdoor equipment, patio furniture, and rugs.
On the back of the latest move, the company strives to fasten its delivery speed across North Dakota, Minnesota and South Dakota.
Amazon.com, Inc. Price and Consensus
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Growing Investments in North Dakota
The world’s largest online retailer has been strengthening presence in Louisiana since 2010.
Apart from the new fulfillment center, the company operates a delivery station in West Fargo, which was Amazon’s first investment in this state.
The company’s investment in the state has exceeded $200 million since then. It includes investment in infrastructure and compensation to employees.
Amazon has helped more than 2,000 small and medium sellers and independent authors in growing their businesses.
In our view, Amazon must maintain its U.S. market share, while expanding globally to retain its dominant position in the e-commerce market. To this end, the company needs to continue investing more in fulfillment centers as the giant warehouses help online retailers store and ship products, and handle returns quickly.
Moreover, strengthening the delivery system remains crucial for the online retail giant in the fast-paced world.
These are important for providing the standard of service that customers have started expecting from Amazon.
Hence, delivering an enhanced shopping experience to customers via quick delivery services will aid Amazon to sustain its dominance in the e-commerce market.
However, intensifying market competition due to the growing online retail and fast delivery efforts of retailers like Walmart WMT, Target TGT and Kroger KR remains risky.
Escalating expenditure related to fulfillment remains another major concern for Amazon. Notably, the company’s cost of fulfillment increased 27.8% year over year to $17.6 billion in second-quarter 2021.
Currently, Amazon carries a Zacks Rank #4 (Sell).
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