Entrepreneurs Can Make $300K Annually from Amazon’s New Program, Here’s How
Delivery Service Partners
Amazon sometime last week announced the launch of a new business. According to the e-commerce company, the business would be suitable for anyone who had sufficient savings and had a desire to be self-employed.
The program according to the company would include getting drivers and operating delivery trucks on behalf of the company. The program known as Delivery Service partners would help handle the issues affecting last-mile delivery. Amazon stated that with a starting investment of $10,000 minimum, anyone could begin the delivery business of hiring drivers and leasing about 40 vans for transporting delivery orders from warehouses to their respective destinations.
According to the company, the drivers would have uniforms that were Amazon-branded, and the vans would also have the company’s logos. However, the business would belong to the entrepreneurs who would only be contracted for the fulfillment of deliveries. A media outlet reported that the company would not allow vans that bore the Amazon logo to be used by competitors.
The company also stated that to reduce the start-up costs for entrepreneurs who were interested in the program, it would also give the entrepreneurs access to other agencies where they could get deals on expenses including the purchase of mobile devices and data plans, lease of vans and getting insurance. In a brochure explaining the program, Amazon stated that the third-party deals were not compulsory and start-ups could still be a part of the main program without taking up the deals. However, it was stated that the third-party deal was because most of the start-ups might be unable to raise the start-up costs of at least $10,000 in the absence of the deals.
Amazon has estimated the potential yearly profits on the business to be within the range of $75,000 and $300,000 for the owners who operated between 20 and 40 vans. It was, however, stated in the brochure that the estimated yearly profits varied, depending on individual business’ costs and the location.
Becoming a Delivery Service Partner
According to the company, the first step in becoming a Delivery Service partner is that the interested parties would be vetted and approved by the company. In the online application, Amazon also stated five requirements to become a part of the program. The requirements included, experience in hiring and building great teams, a readiness to commit to becoming a full-time partner, availability of liquid assets of $30,000 minimum, robust credit history and preference for previous business ownership, although the last requirement isn’t compulsory according to the online application.
After filling in the primary contact details, interested applicants are required to provide answers to specific yes or no questions bordering on current financial assets, past bankruptcies and other experiences.
After an indication of explicit interest and confirmation of $30,000, the website noted that the applicant would then fill a long application. Subsequently, the application stated that applicant would have to wait for a period ranging between a month and six months before kicking off as a Delivery Service Partner.
Opinions On The Program
While speaking to a news outlet about the Amazon program, Anindya Ghose, a professor at New York University Stern School of Business stated that applicants who got accepted into the program should not underestimate the power of the brand. Ghose further noted that if one started a business, it could take years to establish the brand. He noted that this was why it was great for a business to be associated with the Amazon brand which is an established brand.
However, the managing director of the Eugene Lang Entrepreneurship Center and an adjunct marketing professor at Columbia Business School, Jeremy Kagan, warned that the like other businesses, the business model wasn’t foolproof.
He advised people not to quit their current jobs on the hope that they would end up with $300,000 after the first year. He noted that this was the reason why the e-commerce company made provisions for a wide range of estimated annual profits depending on different factors.
He added that the fact that the business would be Amazon-branded meant that the business was fully linked to Amazon in a way, and that could limit the ability of the business to scale. He noted that a business that wasn’t attached to a brand could establish its independent brand over the years, profit from the business and sell at will. However, he stated that the chances of that happening with a business whose brand was dependent on another brand as its sole customer might not be easy as there wasn’t much room for growth with such an arrangement.
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