The Amazing Amazon Gig Venture
BY: AMAN BHANGOO ON TUESDAY, JULY 03, 2018
It was bound to happen, and it did. Amazon evolved, again. Just like those sci-fi movies such as “evolution” where ever so often (and more frequently than we expect, Amazon goes off and changes into something else.
This time Amazon grew up and realized that it was not managing its final mile distribution chain properly. Now, it has come up with a new venture for entrepreneurs that are willing to become fleet managers.
Essentially, Amazon is outsourcing its fleet of cars and vans, complete with uniforms. This new venture will give anyone with the gumption to rent out several vehicles from any location, and then manage their own Amazon fleet.
The concept comes after the Amazon Flex “disaster” which is not one disaster, but an accumulation of badly managed courier gigs that created an overall bad experience for customer and drivers alike.
What is Amazon Today?
Amazon today is 44% of all online US sales. It is investing in brick and mortar companies to supplement their online sales by creating located sales as well as converting every location into a mini Amazon warehouse. This is their answer to the last mile distribution issue.
According to Dave Clark, Amazon’s senior vice president of worldwide operations; “We have great partners in our traditional carriers, and it’s exciting to continue to see the logistics industry grow. Customer demand is higher than ever, and we have a need to build more capacity.”
Amazon already runs its P2P BPO; Amazon Flex is the Uber of Amazon, where drivers use their own vehicles to deliver goods in what they term blocks.
A block is taken via the Amazon Flex app. and the drivers must deliver these blocks within 2-4 hours.Just like Uber, an Amazon Flex driver is an independent contractor, so there are no employee relations between them and Amazon. Since you can’t really make enough income from being an Amazon Flex driver, and since there are a lot of issues with Flex, Amazon evolved and developed the Freight concept.
The Amazon Outsourced Fleet
The message that Amazon is using is “Entrepreneur’ this is their catchphrase. It’s a get rich quick scheme designed to attract unsuspecting fleet managers that want to become overnight logistics demons. Catch phrases such as invest as little as $10,000 and earn up to $300,000 in a year, make the ROI look so amazing, that it's unbelievable. Imagine an ROI of 1 month, well that’s what they are proposing here. Or, if you take their words, you can earn anywhere from $75,000 to $300,000 in profit each year if you build a fleet of 20 to 40 vehicles.
Now that we have put the fantasies behind us let's take a closer look at this amazing deal.
To start off with you will need to invest in renting a fleet. This means paying every month for the use of the van, and you get to wear Amazon delivery clothes too. However, don’t be mistaken, you are not an Amazon employee, neither are your drivers. You are a self-employed fleet owner, you manage a business where your capex is the rent on your vans, and the Amazon logistics center is your schedule maker (not the Amazon Flex App).
You will need to source for drivers, basically turning you into an employee. You will take on the responsibilities of your employees, the costs of maintenance of your vehicles and manage all issues related to deliveries. Sure, Amazon will help you out,
Flex vs. Freight
As an Amazon Flex driver, you manage your own schedule, adhere to the Amazon block and perform within the Amazon constraints. You can do whatever you want with your vehicle, and as an independent contractor, you are not linked to Amazon in any employee-related contract. Your only responsibility is yourself, and your expenses.
As an Amazon Freight operative, you take on the responsibility for a few Amazon-owned vehicles. You are an “Amazon Delivery Service Partners,” but cannot use their vans for your own purposes.
Your responsibility is to Amazon, your employees (drivers) and of course your expenses.
What Amazon is doing is outsourcing its logistics to individuals that want a chance to become a business. This means that you take on responsibilities of a business, you employ people with all the headaches of being a boss. You manage maintenance and expenses. You juggle management and provide solutions.
Yes, it's more lucrative than being a ridesharing driver and courier, but it is a big step in the direction of being a business owner.
The big difference between being a gig worker and a business owner is huge; I mean huge. This is not about driving around by yourself; this is about managing other people. Forget the expenses of fleet maintenance, the biggest issue you will have is controlling and managing your fleet of drivers.
When you take on the Amazon Freight call, you will understand why Uber doesn’t want to employ drivers directly. You will also understand why many find ridesharing driving so attractive and are willing to forgo the headaches of business management for a smaller income, but a much easier one.
On the other hand, this is a gig for entrepreneurs. So, if you have the gumption and guts, if you have the drive and burning desire to manage a fleet of 40 vans, maybe even more, then this is the best new gig in town.
Sure, you will need a few grand to start the ball rolling, but heck, why not team up with some partners, build up a pool of cash and invest in a small fleet together. You can even drive it at first, learn the ropes from within. Once you have the hang of the new system, outsource for drivers.
Take this one step at a time, but take the step, it will be a life changer.