Amazon is looking for entrepreneurs to start their own delivery service networks

Discussion in 'Chit Chat' started by vanzandt, Jun 28, 2018.

  1. vanzandt

    vanzandt

    Amazon is looking for entrepreneurs willing to start their own delivery service networks

    • Amazon unveiled Delivery Service Partners, a new program designed to let entrepreneurs run their own local delivery networks of up to 40 delivery vans.
    • Delivery units will pick up packages from one of 75 Amazon delivery stations.
    • Each Delivery Service Partner can start a business with as little as a $10,000 investment, Amazon said.
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    Watch out FedEx, UPS, DHL and the U.S. Postal Service: Amazon’s building its own last-mile delivery service.
    The e-commerce behemoth announced Thursday Delivery Service Partners, a new program designed to let entrepreneurs run their own local delivery networks of up to 40 delivery vans emblazoned with Prime logos.

    Each delivery unit will start their day at one of 75 current Amazon delivery stations in the U.S. where parcels ordered from Amazon.com are picked up by drivers wearing blue collared shirts with an Amazon logo and black hats. Algorithms will determine which packages are sent to these delivery stations, and which are sent to other delivery partners, like FedEx and UPS.

    "This is all about scaling cost effectively,” said Dave Clark, senior vice president of Amazon Worldwide Operations. He said the new delivery program will help meet the growth in e-commerce. “We are going to have to meet this growth and it's outpacing the growth of our core providers.”

    This year more than 40 percent of all e-commerce purchases will be made on Amazon, according to an eMarketer estimate.

    Clark continued to say that Amazon has “great relationships” with its external delivery partners. “We use everything in order to meet our scale and meet our needs. I don’t see that changing in the future.”

    In its latest annual 10-K filing, Amazon noted the risk associated with relying on external partners like FedEx and UPS. “If we are unable to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience.”

    In the filing, Amazon stated shipping costs, including sorting, delivery center and transportation expenses, ballooned from $11.5 billion in 2015 to $21.7 billion in 2017, and its shipping costs are expected to continue to increase.

    Amazon’s new Delivery Service Partners brings more of the costs and customer service under its control, while letting entrepreneurs run the operations under the behemoth’s name.
    The e-commerce giant said the new Delivery Service program will enable “hundreds” of new small businesses to begin, ultimately hiring “tens of thousands” of new delivery drivers across the country. This comes at a time when there is a trucker shortage in the U.S., adding to rising transportation costs for many businesses.

    Amazon isn't providing an estimate for how many, or how long, it will take to get more delivery stations built in order to get packages to these new tens of thousands of delivery drivers.
    Each Delivery Service Partner can start a business with as little as a $10,000 investment. The partner is vetted by Amazon, and once accepted, will lease Prime-branded vehicles from Amazon, but the entrepreneur will be in charge of recruiting and hiring drivers. Amazon will offer discounts for costs incurred to run the business on expenses like fuel, insurance and benefit programs. The company says the program is set up so successful delivery partners can make up to $300,000 in annual profit.

    Olaoluwa Abimbola has been running his delivery service business in the Denver area as part of the beta test for the last five months. While his background is in computer science and not logistics, he says he’s “loving” his new business and has already hired more than 40 employees who work “fairly regular hours” and “are encouraged to take breaks.”

    This new last-mile delivery program is in addition to Amazon Flex, a delivery program in more than 50 U.S. cities that operates more like Uber or Lyft, with “gig workers” delivering parcels from their own vehicles for $18 to $25 an hour.

    Amazon’s Delivery Service Partners is just another part of the company’s own logistics network. It already has 7,000 of its own trucks and 40 airplanes which, along with external delivery partners, have shipped more than 5 billion Prime items last year.

    While Amazon won’t disclose the financials behind the new delivery program, Clark says it’s “much more about customer experience and meeting overall growth. We think this is going to be a cost effective way to do that.”
     
    bookish likes this.
  2. Looked like a great opportunity until the small print. Operstors are expected to work 7 days per week/365 days per year. Not fun
     
  3. Sig

    Sig

    You don't personally work 365 days a year, your company does. That's why you hire employees, set up shifts....you know, run a business. Lots of us run companies that operate 24/7/365 and only personally work 40 hours a week, less if you're doing it right.
     
  4. bookish

    bookish

    ... so amazon can steal it after you do all the work.
     
  5. UP TO $300k. Amazons own website says $75k-$300k based on revenue of $1m to $4.5m with 40-100 employees

    Worst part is Amazon chooses how much to pay you per delivery. Minimum wage goes up $1 per year in CA. Assuming you have 40 employees working 40 hours per week, every January, your yearly payroll will increase well over 100k. So if Amazon doesn't pay you more per delivery on Jan 1st and you only make $75k per year, you're screwed.
     
  6. destriero

    destriero


    Looking for a job, Surfer?

    Peil, you would fail the background check.
     
  7. bookish

    bookish

    I suspect "operator" means your business, not you personally. I don't know what hours fed ex deliveries operates but if it is a 10 hour day then you could get by with 3 to 5 part time employees.
     
  8. ElCubano

    ElCubano

    As little as $10k doesn't get you the above.