Amazon said interested partners could start a business with "as little as $10,000"-not including the cost of hiring drivers-and no logistics experience is required". Businesses will also be able to get discounts on vehicles, uniforms, fuel and insurance.
Nichols believes FedEx's customer profile is so diverse that Amazon's new program will not be a major hit to its operation-especially since Amazon admits it will still use FedEx and UPS to ship packages around the world.
Those who succeed in the new Amazon delivery program can earn as much as $300,000 in annual profit by operating a fleet of as many as 40 delivery vehicles, according to Amazon. Algorithms will determine which packages are sent to Amazons 75 delivery centers across the country and which packages will be delivered by UPS, FedEx, and other delivery services.
To solve its ongoing last mile delivery problem, Amazon turned to solutions like the Flex program, that paid individuals to use their own cars for deliveries.More news: N Korea still building at nuclear site: Monitor
But labor professors say the arrangement allows Amazon to reap the benefits of a vast delivery network without having to shoulder numerous risks and liabilities involved. Each entrepreneur will oversee 40 to 100 employees who will use 20 to 40 Amazon-branded vans to deliver packages year-round, using Amazon's own logistics systems to facilitate the process.
Then there's the political cost: President Trump, in tweets, has attacked Amazon for "costing the United States Post Office massive amounts of money for being their Delivery Boy".
At a press event in Seattle, Amazon unveiled one of the dark grey Prime-logoed vans that it wants to lease to delivery businesses on what it says are attractive terms.
"We have great partners in our traditional carriers and it's exciting to continue to see the logistics industry grow", said Dave Clark, Amazon's senior vice president of worldwide operations, in a statement about the launch. Last-mile delivery is among the retail industry's biggest challenges as customers increasingly expect quick and cheap delivery of nearly anything ordered online.More news: Anonymous man buys $1 million worth of Toys 'R' Us inventory
Olaoluwa Abimbola, a Delivery Service Partners beta tester, is an early program success story.
"This is exciting. It's great [and] something that we're building for us, for our community, and having the opportunity to work with a company like Amazon is really something", Roberto Ramon said.
"Over the next several years we expect to create hundreds of small business opportunities", Madan said.
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