Business & Investing
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Amazon Delivery Service Partners

4,877 Views | 22 Replies | Last: 2 yr ago by bco2003
wcb
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AG

Quote:

The business owners will be able to make as much as $300,000 a year in profit running a full-sized fleet of 40 vans and managing 100 employees, according to Amazon. They'll be plugged into Amazon's software, which will determine where the drivers go.

Interesting proposition.

Link
Tonyperkis
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I was intrigued by this as well. It seems like it's similar to being able to run a Chick Fil-A except with a much lower barrier to entry. It's going to be a grind it out management job, but is good pay and a lot different than sitting at a desk all day.
HalifaxAg
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Having worked for UPS and then WM doing this exact same job...let me tell you, 40 routes and 100 employees will eat your lunch. That is not a 1-person job. Maintenance of vehicles, payroll, driver safety training and accountability, human resources aspects... and that's just the tip of the iceberg.
singer10
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HalifaxAg said:

Having worked for UPS and then WM doing this exact same job...let me tell you, 40 routes and 100 employees will eat your lunch. That is not a 1-person job. Maintenance of vehicles, payroll, driver safety training and accountability, human resources aspects... and that's just the tip of the iceberg.


This. Sounds like a terrible way to spend $10k and "hope to make up to $300k in profit".
Ulrich
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First impression is that this is a terrible deal for the "business owner". The scale is that of an actual company, not a fast food restaurant or sole proprietorship. That is a lot of financial exposure and liability for upside profit of 300k as a company.
BBDP
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That only $250 per month profit per employee......
administrative errors
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They Just acquired a pharmacy related company, might be a way to get into medicine delivery services early on.
***
Coming soon:
AE Ventures - sooner than soon
*Psychedelic Retreats
*Physical and mental exercises
*Addiction services

Step 3: property found

Step 4: set date

Step 5: plan agenda for participants, food, logistics etc, integration and counseling post-experience

Step 6: long-term planning

I am amped.
Bird Dog
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Copy/paste from Amazon:

"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 20-40 vans Learn more"

planoaggie123
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...if it was a great money maker don't you tend to think Amazon would continue to do it itself? Good opportunity for people willing to put in the work with maybe limited other opportunities but will be a grind. There will be so many facets to deal w/ on this as mentioned above in addition to just ensuring your employees are doing their job
IrishTxAggie
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planoaggie123 said:

...if it was a great money maker don't you tend to think Amazon would continue to do it itself? Good opportunity for people willing to put in the work with maybe limited other opportunities but will be a grind. There will be so many facets to deal w/ on this as mentioned above in addition to just ensuring your employees are doing their job
This. Amazon has shown time and time again that if they can make the lion's share on it, they will do it. Them outsourcing this type of stuff should tell you all you need to know with how they feel about handling this aspect.
Guitarsoup
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FedEx essentially does the same thing, don't they? I've heard owning FedEx routes is a great money maker.
AgCPA95
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Guitarsoup said:

FedEx essentially does the same thing, don't they? I've heard owning FedEx routes is a great money maker.
Here is an old thread I remember reading on this subject including reddit and quora links to for in dept discussions

FedEx routes
JSKolache
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Yeah but Fed-ex uses USPS to do some last mile deliveries.

My guess is Amazon is growing tired of hearing feedback from Prime Customers that USPS is effing up package delivery times. It happens daily in every neighborhood in America. AMZN is wise to want to take control of its own delivery to solidify the Prime brand.
Dr. Horrible
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JSKolache said:

Yeah but Fed-ex uses USPS to do some last mile deliveries.

My guess is Amazon is growing tired of hearing feedback from Prime Customers that USPS is effing up package delivery times. It happens daily in every neighborhood in America. AMZN is wise to want to take control of its own delivery to solidify the Prime brand.
I believe this. Amazon should be pissed when USPS reports "Address does not exist" on every random odd package now and then when they've sent hundreds of packages to the exact same address for years. And they have the data to prove it.
HalifaxAg
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planoaggie123 said:

...if it was a great money maker don't you tend to think Amazon would continue to do it itself? Good opportunity for people willing to put in the work with maybe limited other opportunities but will be a grind. There will be so many facets to deal w/ on this as mentioned above in addition to just ensuring your employees are doing their job
I love Amazon but I hate to say this is borderline deceptive practices. Some unwitting people are going to take out loans or plop down $10K thinking it's something it's not and lose their investment when they realize what this really is.

Even using the aforementioned numbers $300K profit on $3M in revenue, yikes. Are those perfect world numbers? Are they planning for any damage claims, employee comp claims, vehicular or property damage claims by employees....I doubt it. Say goodbye to your profit if anyone of those things happen and I promise you they will.

What about the x-factor of fuel costs? UPS, FedEx, USPS have dedicated teams of professionals whose only job is to negotiate and purchase fuel futures and at quantities that they can get deals. This model will more than likely put the owner-operator paying market rates for fuel.

UPS has dedicated staff for maintenance and repair of vehicles and the management thereof. I know for a fact that FedEx owners are responsible for their own repairs. Significant expenses, downtime and rental vehicle expense here.

I could go on and on. This simply doesn't pass the smell test.
mhayden
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I think it passes the smell test, I just don't think it's meant for anyone that is/was capable of running a small business on their own. It would be tough to lose money, but you just probably aren't going to make that much.

It's also angled more towards people who already run a fleet for whatever purpose... Your successful hot-shot delivery type companies that are looking to expand and the like.
dc509
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I think it's interesting. Especially if down the road you could aggregate other service partners. That said I haven't read the fine print.
OldArmyBrent
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Seems like the profit margins are obscenely low. Only $300k/year for 40 trucks? That's only $7500/year per truck. I can see how it might make sense for someone adding Amazon deliveries to a similar business. Say a florist that already has drivers delivering flowers and can expand to have some do Amazon deliveries. Not sure how you'd be able to use the subsidized trucks in that scenario, though.
Guitarsoup
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Quote:

Not sure how you'd be able to use the subsidized trucks in that scenario, though.
Big magnets to cover the Amazon logo?
TrustinAgs
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Would NOT recommend doing business with Amazon on a partnership level. They have a LONG history of screwing everyone over.

HarleySpoon
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Last post on this topic was 2018.

My youngest thinks this is a real opportunity. Does anyone have any practical experience, knowledge, insight or thoughts on this now three years later? My impression is that it would require 80 hours a week, constant headaches, and produce very low margins that could be taken away in a heartbeat by your one and only customer. In short, an opportunity for a really hardworking person that doesn't have any other viable options and doesn't want a life. Is that too harsh? Any insights/experience now that it is three years since the last post?
2wealfth Man
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HarleySpoon said:

Last post on this topic was 2018.

My youngest thinks this is a real opportunity. Does anyone have any practical experience, knowledge, insight or thoughts on this now three years later? My impression is that it would require 80 hours a week, constant headaches, and produce very low margins that could be taken away in a heartbeat by your one and only customer. In short, an opportunity for a really hardworking person that doesn't have any other viable options and doesn't want a life. Is that too harsh? Any insights/experience now that it is three years since the last post?
Where is he going to get the liquidity to buy/lease 40 vans; how is maintenance paid for, insurance. Seeing lots of expenses and potential liabilities with a hard road to recover your capital and then make a meaningful profit.
Redstone
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Amazon is not a good faith partner. Plenty of testimonies of this.
bco2003
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Here's a pretty good CNBC video on the topic.

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