Amazon recruits small businesses to execute last-mile delivery

Your next Amazon delivery may come from a familiar source.

The e-tail giant is launching a new program called Amazon Hub Delivery that partners with small businesses to deliver Amazon packages in their local neighborhoods. The initiative is flexible, allowing participating businesses to work with their existing staff, at times that works best for them.

Amazon says its goal for the program is to recruit 2,500 partners in 23 states by the end of the year. Local businesses Amazon is encouraging to participate include florists, coffee shops, clothing boutiques, gas stations, plumbers, and hair salons.

For example, a hair salon owner, with clients in the morning and evening, might use Amazon Hub Delivery to fill the gaps in their schedule during the day. Amazon has piloted the program in rural areas of the U.S., and now plans to scale it and bring it to large cities like New York, Los Angeles, Seattle, and Boston.

Partner businesses can make up to $27,000 in incremental income a year, If Amazon reaches its goal of onboarding 2,500 partners, the company says this program could result in $38 million in incremental income for participating businesses in 2023.

Spots to participate in Amazon Hub Delivery are limited, and the retailer says applications will be reviewed on a first come, first served basis.

.“As customers’ needs evolve, we’ve seen differences in how we deliver in towns and cities we serve and the need to find a nimbler solution in specific geographies, like super rural areas or dense large cities,” said Beryl Tomay, VP, last mile delivery and technology at Amazon, in a corporate blog post. “That’s why we are excited to launch our newest delivery program, aimed at empowering small businesses and creating new opportunities for them to grow and scale their businesses.

Amazon reduces delivery costs

Amazon has been making efforts to reduce last-mile delivery costs, which can account for half of total shipping costs. Its new Amazon Hub Delivery program expands its capacity to make fast local deliveries without adding any infrastructure or employees.

In May 2023, the e-tailer began providing a financial incentive for some Prime shoppers to forgo delivery of their orders. Media reports indicated Amazon has been emailing an “unknown number” of Prime members with an offer of $10 to pick up Prime shipping orders worth $25 or more at established pickup locations, such as Kohl’s or Amazon Fresh stores. Amazon declined comment.

Presumably even with the $10 incentive, Amazon will save on last-mile delivery costs through this program.