Amazon.com Inc. (AMZN) is enlisting entrepreneurs to help deliver its packages to the homes of millions of U.S. customers.
On Thursday, the online retailer unveiled Delivery Service Partners, a new scheme that enables entrepreneurs to run their own local delivery networks with up to 40 Prime-branded delivery vans. Amazon has pledged to provide financial and operational support to interested candidates. It will help keep costs as low as $10,000 by offering discounts on delivery vehicles, branded uniforms, fuel, comprehensive insurance coverage etc.
Each potential partner will first be vetted by the company. If accepted, the candidate will then be able to lease Prime-branded vehicles, gain access to Amazon’s “sophisticated delivery technology” and take control of recruiting and hiring drivers. According to the Seattle-based company, its new partners can potentially make up to $300,000 in annual profit.
“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.”
This isn’t the first time that Amazon has turned to independent contractors to deliver its packages. The company already has a program in place called Amazon Flex that enables people to earn $18 to $25 an hour delivering Amazon merchandise using their own vehicles.
However, under its latest initiative, Amazon will now have its own-branded vehicles and uniformed contractors delivering its packages. The e-commerce giant hopes its new scheme can further build its shipment capacity and reduce its dependence on other companies, such as FedEx Corp. (FDX), United Parcel Service Inc. (UPS), DHL and the U.S. Postal Service. (See also: Trump Orders Review of Postal Service Following Amazon Criticism.)
Last year more than 40 percent of all U.S. e-commerce purchases were made on Amazon, according to an eMarketer estimate. To cater to rising demand, the company has been exploring other ways to expand its delivery capacity, leasing its own cargo planes and even experimenting with drones. (See also: Amazon Gets Patent for Data Collecting Drones.)
Documents reviewed by Bloomberg also revealed that Amazon is keen to find a way to ship merchandise directly from merchants to consumers in order to free up space in its warehouses. (See also: Why Amazon's Stock Can Rise to New Record Highs.)