News & Politics

Amazon Offering Profits Up to $300,000 for Delivery Startups

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Amazon is looking for individuals to create companies to handle its increasing delivery needs across the United States.

They want entrepreneurs to start their own companies that would each own twenty to forty delivery vans and employ up to 100 drivers. Amazon claims the owners can make profits of up to $300,000.

Dave Clark, Amazon’s senior vice president of worldwide operations, says, “There’s so much growth here in parcel delivery that there’s more than enough for everybody, and we need to build more of our own capacity.”

Last year the company delivered 1.2 billion packages, according to supply-chain consultancy MWPVL International. About 12 percent of Amazon’s revenue goes to shipping costs, which have increased to $21.7 billion in 2017 from $11.5 billion in 2015, as its revenue increased equally dramatically.

Clark noted, “We’ve been learning more and more over time about what the right model is, and what we narrowed down was this sort of size of business—20 to 40 vans— is about the right size. We think that in order for it to be successful, it does need to be the owner-operator model.”

Amazon needs these companies to deliver packages the “last mile,” the costliest part of the trip from warehouse to home. Currently Amazon uses the major delivery services — FedEx, U.S. Postal Service and UPS — as well as independent drivers who use their own vehicles to make deliveries.

The independent service, called Flex, uses drivers who employ special apps to schedule pickup and delivery of packages, working as independent contractors, much like Uber drivers.

For those interested, Amazon will be offering incentives, such as discounts on Amazon-branded vehicles customized for delivery, fuel discounts, uniforms and insurance coverage.

The USPS could suffer the most under this plan as Amazon’s business, reported to be up to 50 percent of all the U.S. Postal Service’s deliveries, has helped them address their perennial deficit. The Wall Street Journal recently reported that the former postmaster general told analysts that the contract with Amazon had been profitable for the U.S. Postal Service.