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Amazon Seeding Delivery Startups

Amazon may be a victim of its own success

Amazon may be a victim of its own success.

Its explosive growth — the company accounted for 44 percent of all U.S. e-commerce sales last year, according to eMarketer — has strained its fulfillment system, forcing the e-tailer to look beyond traditional carriers like FedEx, UPS and the U.S. Postal Service.

See: Amazon Building Hub For Prime Air Jet Fleet

Now, in an effort to buttress its last-mile distribution network amid demand for same-day and even one-hour deliveries, the company is sowing new businesses to help bring home the goods.

The e-tailer envisions the startups as dedicated delivery fleets with up to 40 Prime-branded vehicles, and hopes to foster hundreds of these regional carriers. To help prime the pump, it’s providing training, algorithmic delivery technology and operational support, plus exclusively negotiated discounts on vehicle leases, fuel, insurance, Amazon-branded uniforms, and other resources that can help keep startup costs as low as $10,000.

Amazon will also kick in $10,000 in reimbursements for military veterans, and can offer all the startups a steady supply of work.

Interested entrepreneurs need little to no logistics experience, Amazon said, and can generate upwards of $300,000 in annual profit.

Dave Clark, worldwide operations senior VP, said the new delivery services will supplement its existing, albeit overtaxed network of traditional carriers and smaller freight handlers.

“Customer demand is higher than ever and we have a need to build more capacity,” he said. “As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

Amazon anticipates the creation of tens of thousands of delivery driver jobs as a result of the initiative, which already entered a beta phase. The company also operates its own fleet of trucks, ships and planes, and hires local drivers to make one- and two-hour deliveries through its Uber-like Flex program.

Related: How Dealers Can Compete In A Same-Day-Delivery World