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Amazon (AMZN) to Open New Facility in Texas, Add Over 500 Jobs

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Amazon.com Inc. (AMZN - Free Report) announced plans to open the company’s first fulfillment center in Missouri City, TX. This new facility is anticipated to be launched in 2021.

The facility will span 1 million sq ft, in which associates will work on larger-sized customer items such as patio furniture, outdoor equipment or rugs.

Meanwhile, Amazon has been increasingly investing to build and modernize fulfillment centers, mainly to cut shipping costs and speed up delivery.

Shares of the company have gained 80.5%, outperforming the industry’s 71.8% rally in the past year.

Job Creation Continues

The e-commerce giant has been successful in creating multiple job opportunities, while strengthening services all over the world.

The latest center in Missouri City is expected to create more than 500 full-time jobs.

Coming to Texas, the company has been strengthening presence in this state and has already invested millions of dollars. Since 2010, Amazon has created in excess of 43,000 jobs and invested more than $16.9 billion in the state.

The investment has been in multiple fulfillment facilities and cloud infrastructure, among others. Reportedly, these investments have generated an additional 49,000 indirect jobs.

The recent facility in Missouri City is further expected to complement its robust growth in Texas.

Bottom Line

Fulfillment centers help Amazon in storage and shipping of products, in addition to handling returns quickly. In fact, these are important for providing the level of service that customers expect from the company.

In addition, small retailers that are unable to provide relatively cost-efficient shipping are signing up for Amazon’s fulfillment services. Third parties also avail the company’s warehouses and shipping services. These, in turn, help it boost revenues and drive expansion in the long haul.

Although heavy investments in these arrangements (and several other initiatives) keep Amazon’s margins under pressure, these are responsible for the company’s progress. Evidently, Amazon’s retail business is currently unbeatable on price, choice and convenience in the face of fierce competition from Alibaba (BABA - Free Report) and eBay (EBAY - Free Report) , among others.

Furthermore, we believe that Amazon’s long history of execution, growing focus on innovation, technological prowess and huge cash balance not only give it the flexibility to pursue growth in potential areas but also create value for investors.

Zacks Rank & Stock to Consider

Amazon currently has a Zacks Rank #3 (Hold). A better-ranked stock in the broader technology sector is Overstock.com , holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Overstock.com is currently projected at 20%.

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