Amazon on Wednesday said it would offer incentives to entice entrepreneurs to set up their own small package-delivery businesses as part of Amazon's latest effort to solve the challenge of getting goods the last mile to customer doorsteps. Amazon is also setting aside $1 million to help military veterans interested in starting their own delivery businesses. While Amazon has long relied on the U.S. Postal Service, United Parcel Service Inc. and FedEx Corp., it has also sought to gain more control over the logistics of package delivery, using its own technology and data-crunching abilities as well as facilities and transport to move packages around more efficiently.
Then, they must identify the top three areas where they would prefer to start their delivery business and answer questions about their work experience and access to cash.
"This is all about scaling cost effectively", said Dave Clark, senior vice president of Amazon Worldwide Operations.
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"We evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses". He added that Amazon has a great relationship with all their delivery services, including the post office.
Amazon has been constantly fine-tuning its delivery options in an attempt to stay ahead of e-commerce rivals, including Amazon Key in-home, and the recent Key In-Car delivery services that take convenience to a new level. This gives them more space for organizing packages, the ability to use parking spots for delivery vehicles, and the ability to haul extra equipment, like straps and dollies. 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 past year.
The company has been growing its fleet of delivery providers, small contractors with as few as 10 white Amazon vans.
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"There are certain things that big, centralized companies do well, but there are other things where local people know better, and last-mile delivery is one of them", said Paul Oyer, a professor of economics and entrepreneurship at Stanford University's Graduate School of Business.
The new program brings more of the costs and customer service under its control, while letting entrepreneurs run the operations under the behemoth's name. To begin with, a business needs to have at least five delivery vans, but that number can ramp up over time.
The buy-in is as low as $10,000 and Amazon says the potential profit could be up to $300,000.
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In other words, Amazon just launched its own UPS competitor of sorts, by offering leased vans, training and resources to those who want to drive for Amazon instead of Uber.