If you every dreamed of owning your own business boy does this Seattle based company called Amazon have a deal for you or do they?
With an initial investment of as little as $10,000, the company claims that it will get you leased vans, insurance, gas cards and training to launch your own delivery fleet provider service. The site also promises to be your first – and, possibly, only – customer. A delivery fleet owner with 20 to 40 vans can potentially earn $300,000 a year, Amazon says.
The site goes on to say:
Amazon continues its long-time commitment to supporting small businesses with an innovative new offering that helps individuals build their own delivery companies
Over time, Amazon will empower hundreds of new small business owners to hire tens of thousands of delivery drivers across the U.S., joining an existing community of Delivery Service Partners
Amazon commits $1 million to fund startup costs for eligible military veterans to start their own delivery businesses
“Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance,” Amazon said in a press release Thursday.
Sounds pretty amazing, huh? Well, all that glitters isn’t gold. What they won’t and can’t promise you is that you will make any profit and actually you might end up making minimum wage yourself as a fleet owner.
The costs of working with Amazon are so substantial that independent delivery companies are increasingly turning away Amazon’s business, says Peter Schlactus, co-founder of the Association for Delivery Drivers. The reason: Amazon requires that delivery companies hire their drivers as employees, rather than work with independent contractors.
This is another brilliant way Amazon is making good on its increasingly demanding product delivery schedule without having the responsibility of it all.
“The challenges of doing delivery work for Amazon has 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.”
Why is Amazon’s requirement that you hire, rather than contract with, drivers so onerous? Because it subjects the delivery company to a wide array of expenses, from employment taxes, workers compensation and unemployment insurance levies, as well as to substantial additional liability.
“If an independent contractor gets into an accident, they cover the damages and liability from their own insurance,” says Schlactus. “If they are your employee, you are liable.”
Worse, he says, if your van is emblazoned with an Amazon logo, it may put a target on your back.
“When people see a major company’s logo on your van, they won’t hesitate to make a claim and to make a claim more aggressively than if they think they are dealing with a small business with limited resources,” he says.
Then, too, to make the kind of money Amazon is talking about requires an extraordinary amount of work. You’ve got to find 20 to 40 fit and responsible individuals with good driving records to operate your vans, do background checks and process employment paperwork and then manage the mind-boggling job of scheduling not only their time, but the delivery of thousands of packages per month within tight allotted time frames.
“It is a 24/7 management commitment,” he says. “It would be interesting to see what your pay would work out to on an hourly basis.”
That said, Schlactus says there’s never been a better time to be a delivery driver or operate a delivery business. Because more sales are happening online and more companies are trying to compete on service as well as sales, delivery drivers are in high demand.
“There is a shortage of commercial drivers, which means they can command better terms and better conditions than any time in recent memory,” he adds.
Solo delivery drivers can earn $30,000 to $50,000 annually with nothing more than a passenger car, he says. If you have a van, you can earn twice as much.
Notably, you can even drive for Amazon without starting a business. Amazon Flex hires independent contractors to deliver packages and pays between $18 and $25 per hour, according to job rating and review site SideHusl.com.
As for Amazon’s offer, Schlactus says: “My advice would be to approach this cautiously. Do your homework. Plug into trade associations, such as ours and the Customized Logistics and Delivery Association, and talk to people. Many current and former Amazon service providers belong and can tell you what it’s like.”
The fleet owners are set up in a row behind a large wooden desk in a large hot warehouse . All set up side by side in this row and behind their wooden grate looking desks are metal cages with locks that hold the keys to the vans, the rabbit and whatever else they may need.
Now let’s go back and talk about the demand on the responsible individuals with good driving records that the delivery fleet owners has to hire themselves.
The rules of the game changes everyday. Amazon is constantly changing the rules and demands on the fleet owners. If this need can’t be met they will take away routes from the fleet owners. So say for instance they generally give the fleet owner 30 routes per-day they will ding the fleet owner and lessen his number of routes for that day if these drivers can’t meet the time frame allotted and when the 30 drivers come in the next day expecting to work there aren’t enough routes for all the drivers.
Amazon also expects the driver to delivery 20 packages or more within an hour but with a “rabbit” which is a handheld device like a cell phone that has all your deliveries for that day loaded on it, your goggle map to the guide you to delivery and the phone number to amazon customer service. This “rabbit” has the delivery person sometimes driving around in circles, it can’t find the location or it even states you’re not at the location but yet you are. This “rabbit” also half works. So how can a driver , deliver 20 or more packages within 1 hour when it is being led 5-10 minutes in one direction only to return to deliver a package to the house of a neighbor that you just delivered to 20 minutes prior?
Also, the drivers they are giving anywhere from 180-250 packages with sometimes up to 180-200 stops for a day but yet they are expected to be done within a 10 hour period but it doesn’t count the time it takes to load , gas up the van and get to the 1st initial delivery point ,which can be an hour away or the fact that this rabbit has them driving around in circles. Most drivers have 10-14 hour days but yet with the threat of being written up if they don’t finish it within a 10 hour time frame for only $14.00 per hour.
I don’t know if you have been adding this up but that is literally 3 minutes per house for these 200 stops. The driver has to find the house, get the package out of the van, walk up to the door, scan the package, take a picture of the package and walk back to your van. Unless you are THE FLASH from the popular tv serious on the CW, this isn’t going to happen.
Another issue with the fleet owners is they over schedule drivers. Yes, I understand that people call out or quit but if you come to work and expect to work it shouldn’t be a 1st come , 1st service basis like your in a soup line begging for free soup. People have bills and no one lives for free.
The drivers are also promised a 30 break minute which is taken off of their daily time but with this schedule when would a driver be able to time for a break for food or to use the restroom? The demands on the drivers are unrealistic and I can only foresee that this will leave the fleet service owners scrambling for drivers or creating a unhealthy work environment.
Amazon has certainly changed the market and we know that every logistic business owner has the same issues with insurance, getting good workers and the liabilities that come with it. Do your research, talk with other amazon owners and decide with caution if this the road you want to travel either becoming a fleet owner or working as a driver for a fleet owner.
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