In June, Amazon announced that it wanted to recruit a network of “hundreds” of entrepreneurs across the country, who would then start small delivery companies.
They’d have contracts to deliver for Amazon, and they’d use Amazon-branded vans that they actually leased from Amazon itself. In the best cases, Amazon was predicting that small businesspeople should be able to take home about $300,000.
But now there are some new numbers out, and they’re suggesting something very different.
First, Amazon says it didn’t just get “hundreds” of applications. It’s received “tens of thousands,” according to Dave Clark, Amazon’s SVP of worldwide operations.
“We expected a lot of interest but the sheer volume — the tens of thousands of people who actually went all the way through the process to make themselves eligible for the program — has been really humbling,” he told CNNMoney.
Second, while Amazon originally was talking about ordering 5,000 delivery vans to lease to these delivery service owners, they’re already way above that: they’ve entered into a deal to obtain 20,000 Mercedes-Benz Sprinter vans.
How big is a 20,000-vehicle fleet? Compare it to:
- FedEx Ground, which says it has about 60,000 “motorized vehicles.” We can assume that’s not just counting last-mile delivery vans, but includes big tractor trailers, and other vehicles, too.
- UPS which has, by my count, about 94,000 total vehicles in the U.S., including “package cars, vans, tractors and motorcycles.” (UPS doesn’t break out its vehicles by country, so it’s an estimate based on its total worldwide fleet of 119,000 vehicles).
- The U.S. Postal Service, which has about 100,000 Grumman LLVs, which are the slope-hooded vans you probably think of when you think of a mail truck.
Obviously Amazon is massive. But the idea of creating a network of private delivery companies that’s functionally about a fifth the size of the U.S. Postal Service, and doing it within a matter of months–that’s pretty darn impressive.
They’re launching the equivalent of one of the largest private delivery services in America–and one that would apparently have only one customer. So, obviously UPS and the postal service should be a bit worried. If Amazon has its own network, it presumably would use the legacy package services less.
But the most important question for entrepreneurs is whether this news of the program’s scope suggests it’s a better deal or less so for would-be delivery service owners?
I’m not sure, actually. It shows Amazon’s serious about the program, but it also suggests there could be a lot more competition than people might have originally thought.
Still, if you were coming to me for investment, even without this program, and said you wanted to start a delivery program that would have Amazon as a client, and that you’d be able to get lower cost vehicles, technology, and training from them, I’d certainly listen.
One way or another, you’ll start seeing them soon. Clark told USA Today that some of the vans will be on the road shortly, and the full 20,000 vans, to be built at a new Mercedes-Benz plant in South Carolina, will be on the road during 2019.