Amazon launches local business delivery network


Amazon is set to enlist a multitude of small businesses across the United States, ranging from bodegas to florists, to facilitate the delivery of its packages by year-end, according to an exclusive report by Axios.

In a significant development, Amazon will commence active recruitment of small businesses in 23 states, including Alabama, Alaska, Arkansas, California, Florida, Iowa, Indiana, Illinois, Massachusetts, Minnesota, North Carolina, North Dakota, New Jersey, New York, Ohio, South Dakota, and Washington, starting from Monday.

The program will initially target at least 20 cities nationwide, including prominent metropolitan areas such as Boston, New York, Los Angeles, and Seattle. This ambitious initiative aims to collaborate with diverse businesses, spanning from florists and coffee shops to clothing stores. Notably, Amazon emphasizes that prior delivery experience is not a prerequisite for a successful partnership.

Referred to as Amazon Hub Delivery, this venture represents the e-commerce and logistics behemoth’s latest endeavor to expand its “last mile” network, which encompasses the final stage of the delivery process, ultimately reaching customers, through external workforces.

Here’s how it operates: Participating businesses will handle an average of 30 packages daily, seven days a week, excluding major holidays. Concurrently, drivers affiliated with Amazon’s Delivery Service Partner network will deliver the packages to local businesses, which are required to provide a secure storage area.

While Amazon has not disclosed the exact compensation per package, an estimated rate of approximately $2.50 per package can be inferred based on an annual earnings projection of $27,000. Beryl Tomay, Vice President of Amazon Last Mile Delivery and Technology, states in an email interview with Axios that this new initiative will “create opportunities for delivery partners interested in growing a business… and supplementing their income.”

It is worth noting that Amazon’s inspiration for this program traces back to India, where a model called “I Have Space” was introduced in 2015. Since then, the program has been implemented in Japan and Spain, and a pilot program tailored to rural regions of the United States was launched toward the end of 2020.

From a broader perspective, Amazon aims to demonstrate to businesses the potential for additional revenue streams through the Hub program. The earnings of individual businesses will likely vary based on geographical location and the number of participating entities.

Amazon has set an ambitious target of partnering with 2,500 small business drivers by the conclusion of 2023.

On a macro level, while consumer spending may have experienced a slight deceleration, customers still demand certainty regarding shipping services. Against this backdrop, Amazon must continually fortify its delivery capabilities while grappling with mounting costs, intensifying competition in the labor market, and criticism over its treatment of drivers.

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