It looks like Amazon will be forced to turn down thousands of business hopefuls who applied to become an Amazon Delivery Service Partner. This is despite increasing their order for Mercedes Benz Sprinter vans from 5,000 to 20,000.
Originally when Amazon announced their Delivery Service Partner program they said they would recruit hundreds of new entrepreneurs to start businesses delivering Amazon packages. They said at the time that successful owners could earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. This offer turned out to be so attractive that tens of thousands completed the application to become Delivery Service Partners.
“We’ve been really blown away by the number of people who approached us. We expected a lot of interest but the sheer volume — the tens of thousands of people who actually went all the way through the process to make themselves eligible for the program — has been really humbling.”
– Dave Clark, SVP of Worldwide Operations, Amazon, speaking to CNN Money
With that many applications and knowing that Amazon’s order is for 20,000 vans, only about 500 operators will become successful. It’s a staggering amount of people keen to run businesses to serve the insatiable demand of consumers buying on Amazon. However it will inevitably mean that tens of thousands (minus 500 successful applicants) will be turned down.
So, how do we put 20,000 delivery vans into context? As a comparison Royal Mail has a fleet in the region of 49,000 to 50,000 vehicles. We don’t know how many delivery vans Amazon Logistics already has in the US, but an additional 20,000 on the road means that they are well on the way to becoming as large an operator as a National Postal carrier.
Amazon are deadly serious about reducing their reliance on third party couriers and Postal carriers. They will doubtless have contracts specifying 7 day a week deliveries which is already better than postal services and carriers. Whilst some delivery services do deliver 6 or 7 days a week, very few actually collect over the weekends except from very large businesses and so effectively still only offer a 5 day service. Amazon want to be able to deliver on Monday even if an order is placed on a Sunday.
National Carriers and couriers were worried enough when Amazon first announced Amazon Delivery Service Partners in the US. They will be even more concerned now that they have effectively quadrupled their order for vans, not to mention the tens of thousands of people lining up to become courier services serving Amazon Logistics.