Franchise Gator has long helped budding entrepreneurs become a part of a larger name brand operation by way of buying a franchise or business opportunity. And now Amazon, one of the largest global companies, is offering the opportunity to lead a fleet of their delivery vehicles.
Why would Amazon create such an opportunity?
It’s an important question. Amazon knows what makes a customer tick, and the words "free shipping" have been one of those draws that has become a bedrock. 70% of Prime members note free shipping as a reason they pay the Amazon membership fee. The never-ending focus on keeping costs low enough to continue to be the top spot for online shopping would ultimately shift the attention towards shipping costs. Amazon has long kept the headaches of employing the delivery fleet at bay, with the likes of UPS and the USPS handling the last mile. With Prime memberships growing rapidly, increasing by 50% in the past year alone, the math tells Amazon now is the time to bring as much shipping in-house as possible.
Find more statistics at Statista.
What does it cost?
According to their website, a minimum of $10,000 is needed to get started. Based on the fine print, it appears $10,000 doesn’t get you the 20 – 40 vans needed to achieve the $75k – $300k in profit they tout as potential. This is a volume play. The more vans the higher the earning potential. Plain and simple.
What are the requirements and benefits of this opportunity?
Amazon’s website does do a nice job of detailing the benefits of buying into their opportunity, including training and access to their sophisticated tracking technology. They are also very upfront in what they are looking for in a business partner: someone who knows how to lead a team and is customer-obsessed. Just as critical is an understanding that this is a 7 day-a-week / 356 day-a-year operation. Experience requirements aren’t very detailed, but it is hard to imagine that jumping in without any delivery or courier experience would not come with some bumps and bruises.
What are the risks?
The finer print notes that this is a "new program". Projected start up costs and profit estimates are not based on any history. This is not a franchise, but rather a business opportunity. No FDD is available to help one crunch the numbers. If interested, research is critical. There are no shortage of articles offering insight, such as this report from CBSnews.com that cites a conversation with the co-founder of the Association for Delivery Drivers discussing the importance to Amazon that all drivers be employees rather than contractors.
If Amazon’s recent headquarter expansion tells us anything, it’s that their retail dominance is not slowing down anytime soon. They need delivery assistance, which may lead to an opportunity that leaves a business owner with a smile on their face that is matched only by the one on the side of their truck.
About the author:Eric has been in franchising for well over a decade, wearing many hats along the way. His original stint was as a franchisee, where his most valuable experience was not as a business owner but rather helping others to buy a franchise of their own. Its that experience that has served him well at Franchise Gator, where he started in 2005.
Eric was appointed as General Manager of Franchise Gator in December 2013. Prior to that, Eric's chief role was as Director of Sales and Service, consulting with franchisors in an effort to help them connect better with those using Franchise Gator to find the perfect opportunity. Eric's expertise in this area was a driving force behind the Gator Dashboard, a platform that assists prospective franchisees during the exploration phase.
When not in the office, tends to his home based franchise, which consists of his wife Stacey and 2 kids, Presley and Spencer. Eric is currently working towards his Certified Franchise Executive (CFE) certification through the International Franchise Association (IFA).