07/13/18

Amazon Promises to Help You Start a Business

Amazon has long dealt with the issue of getting packages to customers in a short amount of time. Their reliance on companies like the U.S. Postal Service has landed them in hot water with President Trump, who says Amazon’s deal is “costing the United States Post Office massive amounts of money for being their Delivery Boy.”

Instead of fighting back against Trump, however, Amazon is taking a different approach that gives aspiring business owners the opportunity to start their own delivery service for an initial investment as low as $10,000. This investment, promises Amazon, gives individuals access to leased vans, insurance, gas cards, and training to launch their own delivery fleet.

Amazon promises that a full fleet of 20 to 40 vans can earn up to $300,000 a year. “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,” Amazon said in a press release Thursday.

As part of this program, Amazon has set aside $1 million to specifically recruit and help military veterans become partners. “This program signals that Amazon would like to ramp up its last-mile logistics operation more quickly,” said Colin Sebastian, an analyst at Baird.

Consequent to the announcement of this program, shares of FedEx were down more than 2% Thursday afternoon, while UPS stock fell about 2.5%. Clearly, the Amazon program is already causing a bit of an economic stir.

Unfortunately, there are some notable downsides to the program. For starters, no new delivery business is guaranteed to make $300,000 a year. In fact, there are a few factors working against this possibility, including liability for deliveries and employees. No drivers hired in these instances may be private contractors, meaning that all the liabilities and expectations in relation to businesses and employees must be carried by the operator of the business.

But, unforeseen costs aside, Amazon is making an interesting offer to the general public – one that could yield hearty profits for entrepreneurs who dare to give it a try.

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About the author

Andrew Mosteller
Andrew Mosteller
Andrew Mosteller is a freelance writer and regular contributor to Lendio News. His upbringing in an entrepreneurial family nurtured a passion for small business at a young age. Andrew's father, an equity fund manager, taught him the ins and outs of investment financing. Now, Andrew spends his time writing copy for business owners, helping them expand and advertise their unique brands. He's also studying Strategic Communications at the University of Utah. When Andrew's fingers aren't glued to the keyboard, he spends his time reading, podcasting, composing music, and bombing down the ski slopes.

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