Why is Amazon paying employees to quit their jobs?
Amazon needs to build its fleet of delivery vehicles and is looking to its own employees to help put trucks on the road. On Monday, the e-tail giant announced an expansion of its Delivery Service Partner (DSP) program, which helps entrepreneurs with little or no logistics experience start their own businesses delivering packages sold on Amazon’s site.
The new initiative offers to pay current Amazon employees including warehouse workers up to $10,000 to fund startup costs and the equivalent of three months of their salaries to quit their jobs and join the DSP program.
Amazon said the initial response to the launch of DSP has been “overwhelming” and that many of its own employees were those who expressed interest in trying the entrepreneurial life. When the program launched, Amazon claimed that owners could earn up to $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. To date, Amazon reports, more than 200 new small businesses employing thousands of drivers have been set up as part of DSP.
“We’ve heard from associates that they want to participate in the program but struggled with the transition,” said Dave Clark, Amazon senior vice president of worldwide operations, in a statement. “Now we have a path for those associates with an appetite for opportunities to own their own businesses.”
Upon acceptance to DSP, employees will need to resign their positions with Amazon. The e-tail giant will provide them with training on how to start their own package delivery businesses, discounts on customized Amazon-branded vans and access to the company’s tech. Importantly, Amazon is promising “consistent delivery volume” for all former employees who join DSP.
Amazon is billing the new initiative as a further indication of its focus on helping employees to achieve their personal career goals.
- Employees Turned Entrepreneurs: New Amazon Initiative Helps Employees Start Their Own Package Delivery Business – Amazon.com/Business Wire
- Amazon calls on entrepreneurs to help deliver its packages – RetailWire
- Amazon takes multi-pronged approach to owning the last mile – RetailWire
DISCUSSION QUESTIONS: What impact might having former Amazon employees join its Delivery Service Partner program have on delivery efficiency? Do you expect other large retailers to primarily rely on their own fleets, internally-associated vendors (similar to DSP) or independent third-parties (FedEx, UPS, USPS, Uber, etc.)?