Amazon Wants to Help You Start a Business! Is It a Good Deal?
Starting a business can be a path to financial success and autonomy. The ultimate goal is to reap the benefits while others do the toiling. There are a few catches though. One, It’s extremely difficult to start a successful business, and most of them fail fairly spectacularly. Two, the overhead costs for starting pretty much any business are (appropriately) through the roof. Amazon may just have a solution to the second problem.
As more and more people use Amazon, they as a company will have to find more and more ways to get their product out. They already have fleets of delivery drivers, a contract with the federal government, and various other means. However, apparently, it’s not enough. In an effort to fix this, they are offering a special “Start your own delivery service” bundle for the low low price of $10,000.
Ten grand probably doesn’t immediately sound like a low price. But when it comes to investing in a new business for less than half the price of a new economy car; it’s not a terrible offer…at least at first glance.
Here’s essentially what they’re offering: You invest $10,000, they help you get trucks, training materials, insurance, and various other things to help you get on your feet. Most importantly, they give you the thing that no new business can survive without, a customer. The bait Amazon is using is the claim that with enough vans in your fleet, you can earn as much as $300,000 in a year. Hypothetically, how much you earn is dependent on how hard you work, the people you hire, and how much you’re willing to invest.
Let’s cut any suspense right here… This is not as great an opportunity as it seems, and there are a whole lot of cons. For starters, while you may have access to discounted equipment and training materials, everything is on you. Unless you rely solely upon their logistics paradigm, if you don’t have human resources experience, accounting experience, payroll experience, and a whole host of other specialties, you’ll be driving blind. Granted, you could hire people to do that, but then you’re already inflating that initial $10,000 figure.
Next, as it turns out, having a contract with Amazon is super expensive. In fact, that’s the reason why they are doing this. The pre-established delivery services are moving away from working with Amazon because they require their delivery drivers to be employees instead of contractors. An employee is considerably more expensive than a contractor. Employees require taxes, benefits, and insurance just to name a few of the costs.
Then there’s that $300,000 number. Amazon freely admits, to hit that number you’d need 20 to 40 vans to potentially get there. Not only is that a lot of employees, it’s a logistical puzzle with ever-moving pieces. You have to schedule all these people, have contingencies in place for call-offs and be available at a moment’s notice should any problems arise. It’s a 24/7 gig.
It may seem like we’re just counting hard work as a con, but that is not the case. For all the time and money you are investing in this venture, you could likely earn as much or more as a regular delivery driver yourself, with normal hours. What you get out of this venture is not worth all that you would have to put in.
While this particular offer may not be all it’s cracked up to be, starting a delivery business isn’t a terrible idea in and of itself. In fact, the industry is currently booming with all the online commerce. Not everyone requires you to hire employees the way Amazon does. You can rent a van and start making deliveries yourself with relatively low start-up costs. The trade-off – you won’t have one of the world’s biggest companies as a guaranteed client. Just something to think about!