Amazon (NASDAQ: AMZN) is speeding up its delivery partnership program with local small businesses after purchasing 20,000 Mercedes-Benz Sprinter vans.
When Amazon announced its Delivery Service Partners program just a little over two months ago, the goal was to bring in local small delivery business. With the purchase of the 20,000 vans, Amazon is accelerating the process as it looks to control the delivery of the products it sells in the “last mile.”
The best way to make this happen is by using local small businesses familiar with their surroundings.
When the program was first announced, Dave Clark, Amazon’s senior vice president of worldwide operations, pointed out the company’s intent to provide small businesses with opportunities.
Why Amazon Ordered Sprint Mercedes-Benz Vans
Clark 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.”
For its part, Daimler AG, the manufacturer of the Mercedes-Benz Sprinter is making the delivery of the vans to Amazon a priority. Daimler says the first Sprinter out of new production was delivered to Amazon.
The vans were manufactured in North Charleston, South Carolina. The purchase of the 20,000 vans will make Amazon the world’s largest Sprinter van customer.
Initially, Amazon was looking to use businesses who already have their own fleet of 20 to 40 vehicles or allow entrepreneurs to create delivery companies by purchasing new vans.
The new plan will farm out the Sprinter vans to fleet-management companies. They, in turn, will buy and lease them to local small businesses to provide the delivery of the last mile.
Amazon will also assist small businesses by providing access to delivery technology, uniforms, insurance, fuel and more.
The Cost of the Last Mile Delivery
The last mile of delivery is the final step of the process, which begins in warehouse shelves and ends at the home or office of the buyer. According to a report by Business Insider, the last mile problem is full of inefficiencies and it accounts for 53% of the overall total cost of shipping.
While many have seen this purchase by Amazon as a way to compete with FedEx, UPS and the USPS, the goal seems to be to make the last mile as efficient as possible and lower the cost in this part of the delivery process.
For small businesses, this will mean new opportunity to be part of an organization that is now the second trillion dollar company in the US.