The delivery wars are heating up, and this time Amazon is recruiting small businesses to assist in battle.
Amazon announced Thursday it's launching a new program that will let entrepreneurs operate their own delivery enterprises under the Amazon Prime name. The Delivery Service Partners program not only lets the e-commerce giant better control costs of delivery, but it could also launch hundreds of small businesses, Amazon said in its announcement.
Entrepreneurs who take part can run a network of up to 40 vans, which they would lease from the company. Amazon said entrepreneurs can launch their business for as little as $10,000 by using resources like company-branded delivery vehicles and uniforms. It is also offering discounts on insurance, fuel, and other expenses, as well as hands-on training. Amazon said it expects successful partners could earn up to $300,000 in annual profit.
Amazon will vet applicants, who will be responsible for recruiting and hiring drivers once they're accepted into the program. The company estimates it will ultimately hire "tens of thousands" of new drivers.
While the program appears to benefit entrepreneurs, it could also help Amazon cut costs significantly. In its latest annual financial filing, the company reported shipping costs jumped to $21.7 billion in 2017, from $11.5 billion in 2015. Additionally, the new program could mitigate the risk of relying on external delivery partners like UPS and FedEx. "If we are unable to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience," Amazon wrote in its filing.