Amazon wants an army of couriers it can control without having the risks and costs associated with hiring them. Introducing the Delivery Service Partner program (DSP), where Amazon will train people to operate their own delivery businesses but with a crucial difference: they'll be limited to delivering Amazon packages only.
Amazon starts off DSPs with five routes/day and monitors their performance. "Successful owners add five additional routes in their 5th, 9th, and 11th week, bringing their business to 20 or more routes after three months."
What happens if they have a bad week due to circumstances outside their control? It's easy to see how this could happen: vans break down, employees quit or don't meet their performance standards, auto accidents occur - the list goes on. Amazon could reduce the DSP's routes, presumably with or without cause.
It seems unlikely Amazon will guarantee the number of routes it will provide DSPs, and the revenue figures it quotes in its brochure are based on a fleet size of between 20 - 40 vans (that would require a sizable number of employees). "As a result, a delivery company may not achieve the revenue figures in the range until it operates a fleet size of 20 to 40 vans for a full year, if ever."
The brochure states:
Successful owners can expect:
- Startup costs as low as $10K
- Annual revenue potential: $1M - 4.5M
- Annual profit potential: $75K - 300K
*Figures are projections for owners operating with 20 to 40 vans.
Amazon said over time, it would empower hundreds of new small business owners to hire tens of thousands of delivery drivers across the US.
The announcement comes a week after the White House announced its inclination to privatize the US Postal Service.
Amazon is increasingly building out its own logistics to ensure it can deliver orders to customers, and while that's good for sellers who use its FBA program, it does nothing to help merchants and retailers who don't sell through the Amazon platform.