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Amazon (AMZN) to Open a Sorting Facility, Hire 450 Workers


Amazon.com, Inc. AMZN plans to open a sorting facility in Brooklyn Park and hire 450 workers. The new sortation center is expected to open later this fall.

The opening of a sorting facility comes at an opportune time, as the holiday season is heading up. The latest move underscores the company’s two basic strategies of continual expansion and increased focus on fulfilling customer needs.

Shares of Amazon have outperformed its industry on a year-to-date basis. The stock has registered a gain of 48.7% compared with the industry’s growth of 3.3% in the said period.

Inside the Headlines

Amazon plans to open a 350,000-square feet sortation center, which will be located at 9001 Wyoming Ave. N. in Brooklyn Park. The new office will mark its fourth facility in Minnesota and allow the company to expand workforce in the area.

The move is in line with Amazon’s motto of providing better services to customers, accommodating rapid growth and leveraging the area’s diverse high-technology talent pool.

Expansion Continues

Over the past few years, the company has been boosting its investments in Minnesota for ensuring better delivery to customers. Amazon already has 2,000 employees in Minnesota, as of now.

Reportedly, it already has plans to open a huge fulfillment center, at a location separate from the proposed sorting facility, which is projected to generate up to 2,500 jobs in Brooklyn Park. The fulfillment center would be located near 109th and Winnetka avenues.

In Shakopee, Amazon already has a fulfillment center as well as a sortation center. The sortation center organizes shipments from the larger facility and organizes them by ZIP codes for faster deliveries.

Bottom Line

Amazon has been pumping in more money to ensure faster delivery of goods to customers. From a span of a day to two hours, two hours to 15 minutes and 15 minutes to two minutes, Amazon has been cutting down on its delivery time for Prime members.

The e-commerce behemoth set the ball rolling by playing to its strength — a strong delivery wing — when it started offering a free two-hour delivery service from Whole Food stores to its Prime members.

Apart from this, Amazon Prime members already enjoy free two-day and one-day deliveries. Also, Amazon Restaurants offer one-hour delivery for Prime members from popular restaurants. AmazonFresh grocery delivery service can fulfill orders within 15 minutes if users pay $15 per month.

The company has been expanding on a global basis. To this end, it is investing more in fulfillment and sortation, as well as technology and content. Although increased expenses could hurt Amazon’s bottom line in the near term, we believe that these measures are necessary to maintain its dominance in this highly competitive market.

Zacks Rank & Stocks to Consider

Amazon currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the technology sector include eXp World Holdings, Inc. EXPI, Universal Electronics Inc. UEIC and Internap Corporation INAP, each carrying 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 eXp World Holdings, Universal Electronics and Internap is currently projected to be 10%, 15% and 2%, respectively.

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