Amazon wants to use small businesses in yet another fulfillment channel.
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Amazon indicated partners might bring in about $27,000 per year in revenue, which Axios says would translate into about $2.50 per package.
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That according to a report from the Axios.com website on Monday.
Under the plan, small businesses such as coffee and IT shops, florists and more can become delivery partners. Amazon would pay a small fee for each package a partner delivers, as it looks to expand its fulfillment reach.
The program is called Amazon Hub Delivery.
It would work like this: small shops in the program would receive packages for Amazon customers who live in the area. The shop owner or the business’ employees would then deliver those packages to those customer locations.
Axios says that Amazon has been exploring this program for some time, and reports that Amazon is already accepting applications from potential partner stores on its website. In fact, Amazon's concept actually originated in India, with a model called “I Have Space” in 2015.
Amazon says that partner stores typically receive 20 to 50 packages per day, seven days a week. These partners are required to have a secure area for storage of items before they are delivered.
Of course, this program would in a sense compete with Amazon’s Delivery Service Partner (DSP) program started a few years ago, and which delivers on-line orders in Amazon vans owned by local entrepreneurs who manage up to 40 vans in their area, with the vans, insurance and more offered using Amazon’s giant purchasing power.
However, Amazon says it will actually be a DSP that delivers the packages to local businesses.
According to Amazon’s referral program, it is targeting small and mid-size cities, such as Columbia, Missouri, Eau Claire, Wisconsin, Fayetteville, Arkansas and Findlay, Ohio, in 23 states to start. But it is also actively recruiting businesses located some 20 urban areas, including Boston, New York, Los Angeles and Seattle.
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Amazon hopes to sign up 2,500 small business partners for the program by the end of 2023.
It has been noted by some that with this program Amazon is putting some dollars in the hands of some local retailers which may have seen their revenue go down substantially from customers moving their purchases from their shops to Amazon.
Amazon indicated partners might bring in about $27,000 per year in revenue, which Axios says would translate into about $2.50 per package.
But how much time does it take to deliver 30 packages? What about the cost of gas, and wear and tear on the car?
Sure doesn’t seem like a real winner for the partners.
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