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.