Amazon looks to localize the last mile
Amazon is looking to keep up with skyrocketing demand for delivery by launching an initiative that encourages people to start their own small package delivery businesses for the company.
The e-commerce giant has announced a Delivery Service Partners program that allows local entrepreneurs to run their own local delivery fleets, with up to 40 vans displaying Amazon Prime logos.
"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.”
The company’s Delivery Service Partners is just another component of the company’s logistics network. It already owns 7,000 of its own trucks and 40 airplanes, which along with external delivery partners, shipped more than 5 billion Prime items last year.
Each Delivery Service Partner can start their business with as little as a $10,000 investment. The partner is then evaluated by Amazon, and once accepted, will lease Prime-branded vehicles from Amazon.
In addition, Amazon plans to offer discounts for costs incurred to run the business on recurring expenses: fuel, insurance and benefits programs. According to the company, successful delivery partners can make up to $300,000 in annual profit. This is because, according to an eMarketer estimate, more than 40 percent of all e-commerce purchases will be made on Amazon.
“I had prior experience running my own business but not in logistics,” said Olaoluwa Abimbola, one of Amazon’s beta participants in the new offering. “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. 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.”
This new last-mile delivery program is in addition to Amazon Flex, a delivery program in more than 50 U.S. cities that operates similarly to Uber or Lyft, with temporary employees delivering parcels from their own vehicles for $18 to $25 an hour.