According to a new report from Axios, Amazon wants to partner with small businesses, such as bodegas and IT shops, so that they can become delivery partners. The company pays a small fee to small retailers for each package they deliver.
With this program, Amazon wants to expand its last-mile delivery network and find new partners who can deliver packages for the e-commerce company. Every day, small partner shops receive packages for customers who live in the area. Shop owners or retail employees will then deliver those packages to Amazon customers.
In other words, Amazon wants to turn your florist, dry cleaner or hair salon into small Amazon storage spaces. More importantly, Amazon is always trying to find innovative ways to expand its external workforce. Some small business owners might be looking at ways to supplement their income.
The company has been exploring this idea for a while and it is accepting applications from potential partner stores on its website. Amazon says that partner stores receive 20 to 50 packages per day, seven days a week.
According to Amazon’s referral program, the company is targeting small and mid-size cities, such as Columbia, MO, Eau Claire, WI, Fayetteville, AR and Findlay, OH. It is also actively recruiting businesses located in Manhattan, NY.
Axios reports that Amazon now plans to expand the Amazon Hub Delivery program to dense cities, such as Boston, Los Angeles and Seattle.
There are many reasons why this program makes sense for Amazon. The company has been actively building its own last-mile delivery network based on third-party partners (Delivery Service Partners), self-employed drivers (Amazon Flex), and automatic lockers in stores, train stations or residence locations (Amazon Hub Locker).
This strategy is important for the company as it reduces the company’s dependency on other delivery companies. This way, Amazon can control the costs and differentiate its service offering from other e-commerce companies.
At the same time, Amazon has become so convenient that many customers now choose to order something online instead of buying it at a local store. Partnering with small retailers is a way to reverse the narrative as Amazon offers additional income (of couse, additional income is useless if you have to close your retail store due to declining sales).
It’s also going to be interesting to see if Amazon plans to leverage these relationships with small businesses to offer them additional services. For instance, some businesses could decide to become third-party sellers on Amazon. They would be able to hand out packages to the delivery person who already comes every day as part of the Amazon Hub Delivery program — how convenient.