Amazon eyeing small businesses to deliver packages

Jermaine Castillo
July 2, 2018

Delivery Service Partners will will oversee 40 to 100 people operating 20 to 40 Amazon trucks to deliver packages around the United States.

With these vans on the road, Amazon said more shoppers would be able to track their packages on a map, contact the driver or change where a package is left - all of which it can't do if the package is in the back of a UPS or FedEx truck. Dave Clark, Amazon's senior vice president of worldwide operations, said the new program is not a response to the president, but a way to make sure the company can deliver its growing number of orders.

The program is its latest attempt to simplify last-mile delivery around the country.

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If you have $10,000 and want to be your own boss, you can apply to start your own small business, delivering Amazon Prime packages in Amazon (AMZN) branded vans and uniforms.

The move comes as President Donald Trump has complained about the postal service undercharging Amazon to deliver packages.

Probably not. There are more packages to be delivered besides the ones shipped by Amazon. "This is really about meeting growth for our future", Clark said.

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Amazon says skilled entrepreneurs could start businesses for as little as $ 10,000, although this does not include the cost of hiring drivers. Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company's sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.

"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. Amazon has set aside $1 million for this program.

Cowen analyst John Blackledge, who rates Amazon at Outperform with a $2,000 price target, predicts in a report issued today that 34% of the company's packages will not be delivered by the USPS, UPS, or FedEx in five years, compared with 17% today. The contractor will be responsible for hiring delivery people, and Amazon would be the customer, paying the business to pick up packages from its 75 U.S. delivery centres and dropping them off at shoppers' doorsteps. This new Amazon offering continues the company's longtime commitment to enabling small-and-medium-sized businesses to grow with the rising tide of e-commerce.

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