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Have You Ever Thought About Making 5 Times The Median National Income By Operating A Fleet Of 40 Vans? Asking For Jeff Bezos

Get down or lay down.
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Jeff Bezos has a problem: he's got a shit load of stuff he needs to ship to you and he's running out of capacity to ship it.


Sure, UPS, FedEx and the US Postal Service work ok, but let's face it: those are middlemen. Anyone who has ever had a bunch of product to move knows that while middlemen with clout are often necessary and expeditious, their clout translates into bargaining power and relying heavily on them can ultimately lead to suboptimal outcomes if the myriad benefits that accrue from utilizing their networks and know-how don't end up outweighing the various costs (tangible or otherwise) of depending on them for distribution.

Here, let Amazon explain this to you idiots, courtesy of their latest 10K:

We rely on a limited number of shipping companies to deliver completed orders to our customers. If we are not able to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience.

For Bezos, this is compounded by the fact that one of his middlemen is under pressure from the President of the United States to raise costs.

So, Jeff is just going to go ahead and cut out the middleman entirely by turning us all into Amazon delivery van drivers. Here's Bloomberg: Inc.’s ever-expanding retail empire is going to need more workers and vehicles to get millions of packages to shoppers’ doors. To do so, the web retailer is encouraging people to start their own delivery businesses.

For those in the U.S. willing to strike out on their own in the service of the e-commerce giant, Amazon will offer financial and operational support, the Seattle-based company said in a statement. Startup costs can be as low as $10,000 and they will get access to discounted trucks, uniforms, fuel, insurance and other resources, Amazon said.

To be clear, anyone who follows Jeff Bezos knows this has been in the cards for quite a while and as Bloomberg reminds you in the same linked piece, the company "has been working on [other] ways to expand delivery capacity" including, but certainly not limited to, dropping shit off in your yard via drones and renting actual cargo planes.

But this latest step is amusing, even by Bezos standards. Here's how this will work, as documented by CNBC:

Each delivery unit will start their day at one of 75 current Amazon stations in the U.S. where parcels ordered from are picked up by drivers wearing blue-collared shirts with an Amazon logo and black hats. Algorithms will determine which packages are sent to these delivery stations, and which are sent to other delivery partners, like FedEx and UPS.

Yes, "algorithms will determine which packages are sent to these delivery stations, and which are sent to other delivery partners, like FedEx and UPS."

But depending on how many Americans Jeff can convince to quit their day jobs in favor of operating fleets of up to 40 Amazon-branded delivery vans, those algos might just start "determining" that every package is shipped through Amazon's network of local van operators and that's where the problem comes in for the traditional carriers. Here's Recode:

For years, Amazon has been laying more and more groundwork for its own logistics and delivery network — one that today only ships and delivers Amazon orders, but could someday do much more in a direct challenge to UPS, FedEx and the U.S. Postal Service.

Today, it is taking another big step toward that potential reality — even if it won’t say so for now.

"For now", Amazon is going with the following explanation when it comes to not tipping their hand regarding what is almost surely a longer-term plan to cut the middlemen out altogether (via Dave Clark, the company's senior VP of worldwide operations):

We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow. Customer demand is higher than ever and we have a need to build more capacity. As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses.

As Recode goes on to write in their piece, it seems likely that over the longer haul, these do-it-yourself, Bezos-sponsored logistics businesses will end up handling deliveries on behalf of companies that aren't Amazon.

But then again, it's not even clear that would be necessary because, as CNBC points out, "this year, more than 40 percent of all e-commerce purchases will be made on Amazon." Assuming that continues to converge on the logical end game (i.e., something close to 100% of e-commerce will be in one way or another controlled by Amazon), that growth would be more than sufficient to support Jeff's van army.

Meanwhile, Bezos has of course presented brick-and-mortar retailers with a simple choice: get down or lay down. Christopher Walken fans might liken it to Frank White from the cult classic "King of New York":

From here on, nothing goes down unless I'm involved. No blackjack no dope deals, no nothing. A nickel bag gets sold in the park, I want in.

So how long will it be before his vans are picking up avocados from Whole Foods and delivering them to Millennials living in homes Jeff owns the mortgage on? Or maybe that's already happening, hell I don't know.

For the van entrepreneurs out there, Jeff needs you to know that you can conceivably make something like five times the median household income if you think you've got what it takes to operate three dozen vans. Here's Bloomberg one more time:

Those who succeed in the new delivery program can earn as much as $300,000 in annual profit by operating a fleet of as many as 40 delivery vehicles, according to Amazon. They will be able to build their businesses knowing that Amazon will provide shipment delivery volume and give them access to “sophisticated delivery technology,” the company said.

Clearly, all of this is hilarious for all kinds of reasons and on all kinds of levels.

But for once, I thought I would close on a more somber note. Think about what this means for society and if you need help with that, I humbly recommend the latest from FT's Alexandra Scaggs called "The node to serfdom".



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