Amazon Looking to Fund Entrepreneurs Who Want to Deliver its Packages

Business

Amazon has announced the launch of a new program that allows entrepreneurs to build their own businesses delivering Amazon’s packages. Successful owners, the company says, can earn as much as $300,000 operating a fleet of up to forty delivery vehicles.

The move is seen as a play against package-delivery giants UPS, FedEx and DHL.

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow. Customer demand is higher than ever and we have a need to build more capacity,” said Dave Clark, Amazon’s senior vice president of worldwide operations.

“As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

In its latest annual 10-K filing, Amazon said its shipping costs, which include sorting, delivery center and transportation expenses, nearly doubled in two years, going from $11.5 billion in 2015 to $21.7 billion in 2017, according to CNBC. Shipping costs are expected to continue to increase for the company.

The program’s goal is to help reduce costs for Amazon in what’s known as “last-mile delivery.” Amazon mainly uses the U.S. Postal Service for that stage of delivery, it drops packages off at the nearest location to their final destination and the USPS takes them the rest of the way.

Amazon will give entrepreneurs training, use of its sophisticated delivery technology, as well as access to its purchasing power which will include discounts on a suite of assets and services, vehicle leases and comprehensive insurance.

“I had prior experience running my own business but not in logistics. I was driving for Amazon Flex when I learned about the opportunity to start my own delivery company. Backed by Amazon’s resources and logistics experience, and its encouragement to ‘learn while I earn,’ this opportunity was a no-brainer,” said Olaoluwa Abimbola, one of the participants in Amazon’s new program’s beta stage.

“In just five months, I have hired more than 40 employees, and it’s encouraging to know that any driven individual can use Amazon’s support and the Delivery Service Partner community to build a successful, thriving business,” he added.

Amazon Flex is a program by which individuals deliver Amazon packages on their own and earn $18-$25 an hour doing so.

Amazon’s new delivery program is likely to be bad news for the major package delivery companies.

FedEx’s stock price dropped more than 2% on the news, while UPS’ lost about 2.5%.

Photo by Amish.Patel via Flickr

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