Commentary

Amazon Looking For Hands-On Entrepreneurs To Run Delivery Fleets

Amazon yesterday put out the word that it is seeking “hundreds of entrepreneurs” to put up as little as $10,000 to start and manage their own companies to exclusively deliver the company’s packages as an “Amazon Delivery Service Partner.” Amazon says it will “take an active role” in helping the wanna-be business owners set up shop — including training and providing discounts on necessary goods and services.

Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles, Amazon claims without revealing exactly how that might happen.  

“At a press event in Seattle, Amazon unveiled one of the dark gray Prime-logoed vans that it wants to lease to delivery businesses on what it says are attractive terms. It also said it would provide uniforms, fueling plans and insurance programs for fleet operators and even offer classes on tax, payroll and other small-business challenges,” writes Reuters’ Jane Lanhee Lee.

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Dave Clark, Amazon’s SVP of worldwide operations, “said he would expect to see operators with 20 to 40 vans employ 100 drivers. Amazon did not offer any details on the incentives or say whether it would pay per delivery, per mile driven or per month,” she continues.

“We are looking for hands-on leaders who are passionate about hiring and coaching great teams. With low startup costs, built-in demand, and access to Amazon's technology and logistics experience, this is an opportunity to build and grow a successful package delivery business,” it states on the home page for anyone interested in the program.

“The number of packages Amazon needs to ship in the U.S. has more than doubled over the past five years to roughly 1.2 billion packages last year, according to estimates by supply-chain consultancy MWPVL International Inc. Projected growth is too much for existing delivery companies to handle, according to the people familiar with the matter,” writes Laura Stevens for the Wall Street Journal.

“Amazon has advanced deeply into logistics over that same period, building out more than 70 delivery stations, buying more than 7,500 truck trailers, leasing roughly 35 aircraft to fly its wares around the country and expanding into ocean freight. Amazon spent $21.72 billion on shipping worldwide last year, or about 12% of overall revenue,” Stevens continues.

“Recently, the company has come under fire from President Trump, who tweeted that Amazon should pay the U.S. Postal Service more for shipping its packages,” a piece for CBS’ “MoneyWatch” reminds us.

“In fact, packages and shipping have been an area of growth for the Postal Service that has offset the decline in volume of letter and magazine delivery. USPS said in its annual report last year that its revenue growth ‘is driven entirely by increases in shipping and packages,’ the story continues. “It loses money every year largely because of pension and health care costs, and not, as the president claimed, because Amazon is using USPS as its ‘delivery boy.’”

But the new program apparently is not a response to the president’s Twitter chides and West Wing rages

“This doesn’t play into that debate at all,” SVP Clark tells the New York Times’ Julie Creswell. 

“Clark said his job was to think five to 15 years down the road about Amazon’s needs and that the new delivery program was designed to meet future growth and capacity demands. He added that Amazon would continue to use all of its partners, including the Postal Service, to get packages to its customers,” Creswell writes.

“Amazon has been testing a number of programs that could replace or reduce its reliance on its delivery partners. This year, for instance, it plans to test a new service in which company couriers would pick up products from businesses that sell goods through Amazon and deliver that merchandise to its warehouses. Currently, that work is done by UPS, FedEx and other companies,” Creswell continues.

In other conveyance news, Amazon has expanded its Whole Foods same-day delivery service to five additional cities: Chicago, Houston, San Antonio, Minneapolis, and Indianapolis.

“Amazon first rolled out Whole Foods deliveries in Austin, Cincinnati, Dallas, and Virginia Beach. A month later, it introduced the service to San Francisco and Atlanta. Amazon said it plans to expand deliveries across United States throughout 2018,” Kevin Kelleher reports for Fortune.

Finding folks to make all these deliveries may be a problem. As the New York Times’ Patricia Cohen reports, “record low unemployment rates have left landscapers, restaurants, hotels, amusement parks and others scrambling for low-skilled seasonal labor.” And, as we learned a few weeks ago, anyone making a delivery had best have their papers in order.

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