Amazon is encouraging individuals to launch delivery businesses that will lease van fleets from Amazon to give the company additional options for last-mile delivery.
Last-mile delivery has been a tough nut to crack for Amazon. Outsourcing delivery to startups seems like an odd way to save money. That is, until you recognize the real game that Amazon is playing. The U.S. postal service is used for much of Amazon’s last-mile delivery. With President Trump calling for higher shipping prices for Amazon, the e-commerce giant is in a weak negotiating position. Creating a network of delivery businesses improves the company’s negotiating position.
The company is encouraging individuals to launch delivery businesses that will lease van fleets from Amazon, which will offer discounts on uniforms, fuel and insurance coverage.
It says it wants to keep start-up costs as low as $10,000, with business owners potentially making as much as $300,000 in annual operating profit with fleets of up to 40 vehicles.
The new programme will give Amazon additional options for “last mile” delivery of its parcels, which are typically handled by FedEx, UPS and the US Postal Service. The company also uses individual drivers to deliver packages in US cities using their own cars under a programme called Flex.
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Jeremy Jones, CFA
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