Impact of Amazon's Fee Increase on Investors' Costs

    Impact of Amazon's Fee Increase on Investors' Costs Amazon pays its new employees an average of more than $18 an hour. Amazon AMZN (NASDAQ) $3.301,12 -14,84 (-%0,45) is really trying to provide incentives for new hires as it struggles to support workers in the ongoing US job shortage. Labor costs will increase by about $4 billion year-on-year, according to Morgan Stanley analyst Brian Nowak.

Recruitment Frenzy

The Company has hired nearly 450,000 new workers since the start of the pandemic and is about to hire 125,000 more. Beginners will start at an average wage of more than $18 per hour. This is expected to translate into a 50% increase in labor cost per unit compared to the fourth quarter of last year.

Fueling Growth.

In a time of ongoing labor shortages, Amazon maintains its competitive advantage and offers better wages and incentives than competing retailers; increases its value. It is known that it continues its investments in 2021 to connect all its new warehouses. Recruitment continues through delivery service partners who quickly deliver packages to customers' doorsteps in all circumstances. Amazon spent billions of dollars to build this network.

Impact of Amazon's Fee Increase on Investors' Costs

  What matters is that Amazon can serve customers better than competing retailers. As a result, Amazon will be able to increase its market share by providing better stock levels and keeping shipping times short. In the face of these services, it will be able to increase the number of paid subscribers. There are also long-term advantages to paying workers more. This can be extremely valuable in a high turnover industry. Investors will be pleased with strong fourth-quarter sales results despite rising labor costs for Amazon this year.  

Source: The Motley Fool

 

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