When CBS News Moneywatch needed perspective on Amazon’s announcement that it would help set up new delivery companies, it turned to A4DD co-founder Peter Schlactus. Schlactus is a risk management professional with decades of delivery sector experience. He contributed the bulk of CBS’ analysis. View the full text of the article here: Pros and Cons of that $10,000 Amazon Delivery Business Offer.
Amazon’s Bottom Line
Amazon is promoting how budding entrepreneurs can start a delivery business by investing as little as $10,000. Amazon will assist them to get the leased vans, insurance, gas cards and training to launch their own delivery fleet. The new firms can count on work from Amazon too. It is dangling the promise of big bucks for successful fleet owners, regardless of experience.
Amazon forbids using independent drivers
CBS notes that Amazon requires delivery companies to hire employee drivers, rather than work with independent contractors. Schlactus points out that this makes the costs of working with Amazon so substantial that independent delivery companies are increasingly turning away Amazon’s business: “The challenges of doing delivery work for Amazon have taken many dozens of delivery owners by surprise,” Schlactus says. “My read is that Amazon is doing this to address a dwindling supply of independent delivery companies who are willing and able to work with them.”
“It is a 24/7 management commitment,” he adds. “It would be interesting to see what your pay would work out to on an hourly basis.”
Better to Be a Delivery Driver
The pros and cons of dealing with Amazon need to be weighed against the opportunities that abound for independent drivers. CBS quotes Schlactus saying there’s never been a better time to be a delivery driver or operate a delivery business. More sales are happening online and more companies are trying to compete on service as well as sales. So delivery drivers are in high demand. “There is a shortage of commercial drivers”, Schlactus notes, “which means they can command better terms and better conditions than any time in recent memory.”
A4DD’s Bottom Line: Approach Cautiously
CBS asked Schlactus for his overall assessment of Amazon’s offer. “My advice would be to approach this cautiously,” he responded. “Do your homework. Plug into trade associations, such as ours and the Customized Logistics and Delivery Association. Talk to people. Many current and former Amazon service providers belong and can tell you what it’s like.”
Member Service Team
Association for Delivery Drivers www.a4dd.org