The ecommerce giant is seeking to assist hundreds of new small businesses to employ tens of thousands of delivery drivers across the USA by providing discounted vehicles, fuel, insurance, uniforms and access to "sophisticated delivery technology", the Seattle-based company said in a statement on Thursday.
Amazon.com is asking small business-owners to help deliver its goods, seeking to reduce its reliance on the U.S. Postal Service and other major delivery services as the number of packages it ships continues to climb.
This new last-mile delivery program complements Amazon Flex, a delivery program in more than 50 U.S. cities that operate similar to Lyft and Uber, and fulfill orders through their own vehicles for $18 for $25 per hour.
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Reportedly, the new delivery service program allows entrepreneurs to start the business with a meager sum of around United States dollars 10,000 as the initial investment.
Amazon already works with hundreds of third-party courier companies that hire and manage their own fleets of drivers, but they did not disclose to Business Insider's whether its relationship with its current delivery service providers would change.
Will this put my existing delivery company out of business?
"All of this is associated with cost savings and efficiency", said senior vice president of Amazon Worldwide Operations, Dave Clark. FedEx didn't immediately respond to a request for comment. A DSP business, if successfully executed, can expect to run a fleet of 20-40 vans and Amazon "projects" a net an annual profit potential of $75,000 to $300,000, with annual revenue in the $1-4.5 million range. The new program will allow entrepreneurs to carry out delivery services using Prime-branded vans.
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Amazon has used independent contractors in the past to handle packages, especially during busy holiday shopping periods.
The latest initiative is particularly important as more customers sign up for Prime Now, stoking demand for two-hour deliveries, said Colin Sebastian, an analyst with Robert W Baird & Co., in a note to clients.
Amazon has been looking for ways to cut costs on the so-called last-mile of deliveries, which is often the most expensive part of the fulfillment process. First, the company unveiled a new last-mile delivery service to rival FedEx and UPS.
To start, you need a minimum investment of $10,000, and the company said that anyone who is interested in applying for the program doesn't need to have any experience in delivery and logistics.
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