Starting a delivery business? Amazon wants to help
The e-commerce giant is looking for ways to keep up with customer demand.
Ben Fox RubinFormer senior reporter
Ben Fox Rubin was a senior reporter for CNET News in Manhattan, reporting on Amazon, e-commerce and mobile payments. He previously worked as a reporter for The Wall Street Journal and got his start at newspapers in New York, Connecticut and Massachusetts.
Amazon is keeping up its push to build its own delivery capabilities.
The online retailer said Thursday that it's going to support entrepreneurs who form companies to deliver its packages with its new Delivery Service Partners program.
Amazon will offer discounted vehicle leases and insurance, training and access to logistics tech, saying that its partners can earn profits up to $300,000 annually by operating a fleet of 40 delivery vehicles. Delivery Service Partners can start their own business with investments starting at $10,000, it said.
"Customer demand is higher than ever, and we have a need to build more capacity," Dave Clark, Amazon's senior vice president of worldwide operations, said in a release. "As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses."
The new program extends Amazon's already long list of logistics and delivery operations as it works to respond to surging customer demand. Last year, more than 5 billion items shipped with its Prime program worldwide, the company has said.
This Amazon site handles your biggest, bulkiest purchases
To keep up with that growth, Amazon last year announced plans for a new $1.49 billion air cargo hub in Kentucky, and it leases 40 Prime Air cargo planes. It also started Amazon Flex, a gig economy service that lets contract workers deliver Amazon packages, and already partners with many smaller local shipping companies throughout the country.Plus, Amazon created a network of package-delivery lockers in convenience stores and apartment complexes.
All those efforts have been seen as Amazon threatening its long-standing delivery partners: UPS, FedEx and the US Postal Service. Clark specifically mentioned that Amazon has "great partners in our traditional carriers," as a way of allaying those concerns. But as Amazon has repeatedly created in-house systems that it eventually sells to other companies -- such as its cloud-computing service and warehouses -- it's expected to eventually do the same with deliveries.
For now, though, Amazon's shipping operations are dwarfed by its three major partners, so it should keep using them for years to come.
Additionally, the new program could be seen as Amazon's response to President Donald Trump's repeated assertions that Amazon underpays the US Postal Service for package deliveries. The Postal Service has said that Amazon has benefited the organization, not harmed it.
"This doesn't play into that debate at all," Clark told The New York Times when asked if the Trump feud related to Thursday's announcement.
Olaoluwa Abimbola, one of the service's beta participants, said he used Amazon's resources to form his own company and has hired 40 employees in five months.
Amazon is also setting aside $1 million to offer funding startup costs to military veterans, with $10,000 reimbursements for qualified candidates to build their businesses.
Originally published June 28 at 5:15 a.m. PT. Updated at 7:45 a.m. PT: Added background information throughout.
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