Nichols believes FedEx's customer profile is so diverse that Amazon's new program will not be a major hit to its operation-especially since Amazon admits it will still use FedEx and UPS to ship packages around the world.
Each potential partner will first be vetted by the company. Yahoo Finance's Seana Smith, Dion Rabouin, Myles Udland and Dan Roberts discuss.
This also addresses some of the problems the gig work Flex drivers faced - gas prices would often cut far too much into profits; the lack of insurance; and the general challenges associated with trying to delivery packages from an unbranded, small vehicle. The idea is that someone can work with Amazon to start their own independent delivery service, with access to Amazon's delivery infrastructure and guaranteed work, given the high volume of deliveries Amazon makes every day. It's also setting aside $1 million to specifically recruit and help military veterans become partners. And of course, Amazon is also offering a steady stream of packages for them to deliver to its customers.
Painting a very rosy picture of life in the delivery industry, the company added: "Amazon will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business".
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While the program appears to benefit entrepreneurs, it could also help Amazon cut costs significantly. "In just five months, I have hired more than 40 employees, and it's encouraging to know that any driven individual can use Amazon's support and the Delivery Service Partner community to build a successful, thriving business". "The deals are available on Amazon-branded vehicles customized for delivery, branded uniforms, fuel, comprehensive insurance coverage and more".
Amazon has been constantly fine-tuning its delivery options in an attempt to stay ahead of e-commerce rivals, including Amazon Key in-home, and the recent Key In-Car delivery services that take convenience to a new level.
Amazon is looking for entrepreneurs to buy in on the local level and run a fleet of up to 40 delivery vehicles.
Numerous businesses joining Amazon's newest venture will have "little to no logistics experience", which may give 3PLs some breathing room before the competition heats up. Amazon ended up offering refunds to customers - a situation it would no doubt like to avoid in the future.
The company has been building up its own fleet of 7,000 of trucks and 40 airplanes to cover the "middle mile" of delivery.