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New Amazon Program Cultivates Different Take on UPS, FedEx

Amazon has launched a program aimed at helping entrepreneurs build their own companies delivering Amazon packages, while serving as a solution to the “last mile” challenge.

Under the initiative, successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles, with Amazon taking an active role in helping interested entrepreneurs start, set up and manage their own delivery business. Individual owners can build their businesses knowing they will have delivery volume from Amazon, access to the company’s delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” Dave Clark, Amazon’s senior vice president of worldwide operations, said. “Customer demand is higher than ever and we have a need to build more capacity. 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.”

Over time, Amazon said it sees the program leading to hundreds of new, small business owners hiring tens of thousands of delivery drivers across the U.S., joining a robust existing group of traditional carriers, as well as small-and-medium-sized businesses that already employ thousands of drivers delivering Amazon packages. The offering provides technology and operational support to individuals with little to no logistics experience, the opportunity to manage a delivery business.

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“Amazon’s new delivery program will afford the company more ‘last mile’ capability and control,” Moody’s lead retail analyst, Charlie O’Shea, said. “Proprietary control over this key last mile is a critical missing component of Amazon’s arsenal as it competes with brick-and-mortar, and depending on how much capability this new venture generates, will serve to close this gap.”

Jonathan Root, Moody’s senior vice president, said, “UPS and FedEx will face minimal negative impact from Amazon’s new ‘last-mile’ delivery program using small delivery companies. Amazon volumes will still flow to UPS and FedEx’ networks, while any reductions in volumes from Amazon would free up capacity in these companies’ networks to be utilized for other, presumably higher-paying customers as e-commerce grows.”

To help keep startup costs as low as $10,000, entrepreneurs will also have access to a range of exclusive discounts on important resources they’ll need to operate a delivery business, Amazon noted. The deals are available on such products and services as Amazon-branded vehicles customized for delivery, branded uniforms, fuel and comprehensive insurance coverage.

Amazon said it is constantly looking for hands-on leaders who can think outside of the box and find new ways to deliver value to customers. With that in mind, the company is committing $1 million toward funding startup costs for military veterans, offering $10,000 reimbursements for qualified candidates to build their own businesses.

“I had prior experience running my own business, but not in logistics,” Olaoluwa Abimbola, one of Amazon’s beta participants in the new offering, said. “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.”

Amazon noted that it has long supported businesses in connecting with customers around the world. Its Marketplace, which uses Amazon’s websites and logistics operations to connect customers with third-party sellers has helped more than 140,000 small-and-medium-sized businesses to do more than $100,000 in sales each.

More than half of all the items sold on come from third-party sellers, the company noted. Amazon has also developed technology, devices and services, such as Amazon Web Services that benefit developers who operate as small businesses.