Amazon Trying Unique Approach to Last-Mile Rural Delivery: Independent Shops

Amazon Trying Unique Approach to Last-Mile Rural Delivery: Independent Shops

Vox had an interesting article yesterday about how Amazon was trying to make inroads into the rural delivery market using a different model than it has tried for more dense areas.

Let's review the facts:

- About 31,000 post offices in the United States, yet there are something like 2,000 FedEx office and 5,000 UPS stores.

That means there is a large gap in network coverage within 10 miles of a final delivery station.

- Amazon looking at paying mom-and-pop shops something like $2.50 to $3.50 / package to deliver something like 600 to 800 packages weekly.

- Amazon is not able to replicate its Delivery Service Partner program in these rural areas to to lack of demand, not a big enough opportunity. Instead, they plan to use "slack" in existing shops and perhaps throw some of these independent businesses a lifeline at the same time.

My thoughts:

- This shows that Amazon is thinking on the right scale. There are ~150k convenience stores in the US, most of which are independent (not chains). It means that theoretically the strategy could work.

- This is straight out of the Amazon playbook of not "owning" things (i.e. more flexible than building 20k delivery stations) -- similar to their shipping DSP program.

- Assuming that the price is right per parcel, it could be a win-win for both sides.

- If Amazon could pull this off, they could be the de-facto nationwide delivery partner if the USPS is not able to modernize its infrastructure.

I might even predict that within the next 3-5 years, you could see a partnership between UPS and Amazon for Amazon's last mile delivery, in a twist of fate.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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