Amazon Is Paying $10,000 To Employees For Turning Them Into Entrepreneurs – What Is The Weird Logic?

Amazon wants their employees to become entrepreneurs

Imagine working for a company, which is not only the best in what it does but also encourages you to leave the job if you’re not willing to continue your service and pay for it as well. Yes, you heard it right. The e-commerce leader, Amazon.com Inc. Announced on 13th that it is willing to pay its employees a sum of $10,000 if they wish to leave the company and start their own package delivery business.

The Interesting Deal of $10,000

The ‘last mile’ of delivery, i.e. delivering an order to the customers’ door has been an obsession for many e-commerce companies, to which they have gone to insurmountable lengths. In order to speed up its shipping time from two days to one for its Prime members, Amazon introduced the ‘Delivery Service Partners’ program in mid 2018, to give the company more control over the “last mile” of product shipments to consumers.

Now, Amazon has announced a new incentive program, wherein it is offering to pay its employees $10,000 to quit their jobs and start a small business operating package delivery companies. Amazon says it will cover up to $10,000 in startup costs for employees who are accepted into the program and will also pay them three months’ worth of their gross salary.

Since the launch of the Delivery Service Partner program in June 2018, Amazon has enabled the creation of more than 200 new small businesses that have hired thousands of local drivers to deliver packages to Amazon customers. The offer is open to most part-time and full-time Amazon employees, including warehouse workers who pack and ship orders.

How Will This Deal Affect Amazon

Amazon appears to prefer contracting with smaller delivery companies, typically having fewer than 100 workers and 40 vans, putting up the Amazon Prime logo on delivery vans. Each business owner approved for the program would oversee between 20 and 40 Amazon-branded delivery vans.

Amazon no longer wishes to rely on third part vendors like FedEx, United Parcel service and the U.S. Postal Service to handle package shipments to consumers. By augmenting the capabilities of its existing network, Amazon will, potentially reducing its shipping costs while ensuring additional capacity during times of peak volume, like the holidays.

Amazon currently has about 650,000 full- and part-time employees around the world, so leaving the places for 500 or 1000 employees is unlikely to affect other departments.

Becoming a delivery partner could also be a smart business decision, especially since self-driving delivery services are still years away. Amazon is still far posing a threat to UPS and FedEx, as these giants have thousands of trucks and hundreds of planes to get packages where they need to deliver and are doing way more than just delivering packages to doorstep.

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