Amazon.com, Inc. (NASDAQ: AMZN) to Increase the Purchase of Supplies and Services by 20%

Amazon.com, Inc. (NASDAQ: AMZN), an e-commerce giant, is likely to increase its purchases of supplies and services by 20% this year from over 200,000 U.S. companies. The company will be purchasing equipment for logistics sites, services for construction, design, and engineering project, and supplies for corporates, among others.

The company to purchase supplies and services worth $120 billion

Given the economies of scale and spread globally, the company has the inherent power to buy the materials and services and lower prices, and serve its customers effectively. The company sources 60% of the products from small and medium-sized businesses in the U.S. The company is likely to purchase such supplies and services worth $120 billion this year from the U.S. As the company is entering into the new peak season, the company is always ready to open a new fulfilment centre. The company undertook the planning of the same multiple years in advance. The company added almost 400,000 additional employees in the past year. To capture opportunities in the peak season, Amazon is likely to hire around 30,000 candidates.

The company is strengthening its workforce to capitalize on the upcoming demand

The company is likely to add another 30,000 candidates to fulfil the services. Amazon would be hiring candidates for all positions (entry-level to software development engineers to management levels, etc.). The company will pay around $15 an hour for the new candidates. Moreover, the company has mandated all the employees to wear a mask, regardless of their vaccination status. 

Nowadays, the pandemic has become a debatable topic, and wearing a mask has become mandatory irrespective of whether the employee is vaccinated. The industry believes the substantial buying by Amazon is likely to capture the maximum share of the upcoming peak season. Given the company’s inherent strength, the company is expected to offer products at competitive prices. The online industry believes that brick-and-mortar business is likely to have a tough time in this peak season, given the strong buying by Amazon. The buying would provide some fuel to the small and midsized businesses in this pandemic and can sustain their business over a period of time. It seems that small and midsized companies would also grow with Amazon.

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Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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