To keep up with ever growing demand, Amazon recently announced its Delivery Service Partners program. This program empowers entrepreneurs to start and run their own Amazon-branded delivery companies, eliminating Amazon’s competition for last-mile delivery services like FedEx, UPS, DHL, and the U.S. Postal Service. The program is a big step forward for Amazon’s quest for world domination, but is this a big opportunity or big mistake for entrepreneurs?
Initially, this sounds like a foolproof opportunity. Teaming up with the world’s most powerful retail behemoth – what could go wrong?
First, Amazon is a lean, mean, efficient machine. The ecommerce giant specializes in controlling costs (that’s half the purpose of launching this program), so they’re bound to remove any chaff by increasing delivery competition. That means lower expenses for Amazon and tighter margins for Delivery Partners. Due to Amazon’s priorities, this program will likely create businesses that get by, not businesses built to last.
And it’s just as well since Amazon’s not been shy about their ambitious plans for owning more self-sustaining technology. Amazon is still pursuing drone delivery avenues while also looking into self-driving vehicles, too…all with the intent to one day replace drivers completely. I’s a dream that’s not about to come to fruition anytime soon, but you have to question allying yourself with a company currently investing money in technology intended to replace you.
While this program initially looks like a high risk, low reward opportunity, Amazon thinks differently. The company says successful delivery partners can make up to $300,000 in annual profit through the program. To help, Amazon plans to cut partners’ expenses by offering discounts on business expenses like fuel, insurance, and benefit programs.
With Amazon’s help, successful Delivery Partners will emerge on top. But how many unsuccessful partners will be sacrificed along the way? Time will tell whether joining the program is a big opportunity or big mistake for small business owners.