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Amazon will help entrepreneurs form companies to deliver its packages

Amazon will help entrepreneurs form companies to deliver its packages

Amazon.com needs help going the final mile. Well, more accurately, lots of little partners. Both of these things are great for Amazon stock. Back in April, the president attacked Amazon on Twitter, telling followers that it's "costing the United States Post Office massive amounts of money for being [the company's] Delivery Boy". Kroger, the grocery giant, is also upping its delivery game partnering with the self-driving auto company Nuro. That's a lot of revenue, but also a lot of deliveries. It already owns 7,000 of its own trucks and 40 airplanes, which along with external delivery partners, shipped more than 5 billion Prime items past year.

So far, that hasn't been enough ensure Prime customers get their packages in time.

Each delivery unit will start their day at one of 75 current Amazon stations in the USA where parcels ordered from Amazon.com are picked up by drivers wearing blue-collared shirts with an Amazon logo and black hats. So far the threat hasn't hurt Amazon stock, but there is the worry that it might. Introducing the Delivery Service Partner program (DSP), where Amazon will train people to operate their own delivery businesses but with a crucial difference: they'll be limited to delivering Amazon packages only.

Amazon also notes that this offer will have startup costs as low as $10,000. According to the Seattle-based company, its new partners can potentially make up to $300,000 in annual profit. According to Amazon, drivers in the Flex program make $18 to $25 an hour.

Amazon is looking for entrepreneurs to buy in on the local level and run a fleet of up to 40 delivery vehicles.

The company will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business. In return, Amazon gets more ways to ship its packages to shoppers without having to rely on UPS, FedEx and other package delivery services.




Amazon is also taking a big leap in the delivery business.

The Delivery Service Partners program gives Amazon more control over the last step of the delivery process.

WHAT KIND OF A CHALLENGE DOES THIS POSE TO THE LIKES OF FEDEX and UPS?

Competition for online shoppers is heating up as Walmart Inc (NYSE:WMT) continues to boost its web presence. Amazon envisions empowering hundreds of new small business owners to hire tens of thousands of delivery drivers, joining its existing community of delivery service partners.

Amazon is getting into the package delivery business, with Youngstown one of many markets the company is targeting. It's another way for Amazon to gain greater control over how its packages are delivered. And some Amazon Prime members can have packages dropped inside their homes or auto.

As of this writing, William White did not hold a position in any of the aforementioned securities.

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