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Amazon to partner with local startups to help with deliveries

With what it calls Delivery Service Partners, eCommerce giant amazon is seeking help small businesses to employ tens of thousands of delivery drivers across the U.S. by providing discounted vehicles, fuel, insurance, uniforms and access to “sophisticated delivery technology,” the Seattle-based company said in a statement

all this was made public on Wednesday by senior VP of worldwide operations Dave Clark who hosted a small event in Seattle to brief reporters on the plans.

The company said it will help entrepreneurs start, set up and manage their delivery business, promising as much as $300,000 in annual profit for as little as a $10,000 investment. Owners will have guaranteed volume from Amazon, access to the company’s delivery technology, training, and discounts on vehicle leases and insurance. Amazon envisions an eventual army of hundreds of small business owners with thousands of drivers and vehicles nationwide through the program.

The company is also trying to figure out how to move merchandise directly from merchants to consumers to avoid overwhelming its own warehouses with inventory

Experience in delivery is not required. “Predominantly, we’re really looking for people who have the right cultural, leadership kind of frame,” Clark says. “We want people who are people people . . . who enjoy being out in their community.” Amazon thinks that it’s an especially good opportunity for military veterans—and to encourage qualifying vets to take up the challenge, it’s setting aside $1 million so it can give them $10,000 apiece to cover startup costs.

Once a Delivery Service Partner is up and running, Amazon will provide not only stuff to deliver but also the back-end infrastructure needed to manage it; assistance with issues such as training, taxes, and payroll processing; and discounts on insurance, fuel, and truck leasing. The company will sign each firm to a contract based on goals for delivery volume and says that it will be possible to turn $300,000 in profit a year from such a business.

At the Seattle event, Clark introduced Ola Abimbola, an immigrant from Nigeria who had a technical desk job but found he “didn’t want to be cooped up behind a computer.” Abimbola began driving for Amazon Flex and, as part of the Delivery Service Partners beta test, started his own delivery company. Five months later, his Aurora, Colorado-based business has almost 40 full-time and part-time workers. Thanks to Amazon’s never-ending delivery needs, he said, “my employees, all they have to do is show up for work, and there is always work to do–great, steady income.”

Though this model may appeal to prospective Delivery Service Partners, the asymmetry of the relationships also lets Amazon call the shots in a way it can’t do when negotiating terms with a giant like FedEx or UPS. Or with the U.S. Postal Service, which the president of the United States keeps declaring isn’t charging Amazon enough to deliver its goods (justifiably or not).

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