Amazon is paying employees $10,000 and 3 months' salary to quit and start their own business
In June, Amazon announced a new business opportunity for almost anyone with enough savings and a desire to be their own boss — running a fleet of delivery trucks for the e-commerce giant through its Delivery Service Partner program. The company said potential annual profits for business owners could be as much as $300,000.
Now, Amazon is incentivizing its own employees to quit their job and start their own Amazon delivery business through the program by offering them $10,000 and the equivalent of three months' salary to participate.
In addition to the money, Amazon says through the program employees "will leave their role at Amazon to build their business knowing they will have consistent delivery volume from Amazon, access to the company's sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including Amazon-branded vans customized for delivery, branded uniforms and comprehensive insurance," according to Monday's announcement.
"We received overwhelming interest from tens of thousands of individuals who applied to be part of the Delivery Service Partner program, including many employees," said Dave Clark, senior vice president of worldwide operations. "We've heard from associates that they want to participate in the program but struggled with the transition. Now we have a path for those associates with an appetite for opportunities to own their own businesses."
As the Associated Press notes, Amazon's new employee incentive comes at a time in which Amazon is trying to speed up its Prime delivery shipping from two days to one. The offer is available to most part-time and full-time Amazon employees, including warehouse workers.
According to Amazon, almost any entrepreneur can start a business with its Delivery Service Partner program with an initial investment as low as $10,000 to hire drivers and lease up to 40 vans to deliver Amazon packages from a warehouse to a person's home.
Amazon has said that for "successful owners" operating between 20 to 40 vans, it estimates potential annual profits will range from $75,000 to $300,000 (although it can vary depending on city and the individual business' costs).
And while associating with Amazon "is extremely powerful," according to New York University Stern School of Business professor Anindya Ghose, no business is foolproof. Participants shouldn't expect to suddenly make $300,000. Even Amazon provides a broad range of potential profits per year — and lots of fine print.
Plus the branding connection and incentive will mean business owners will be beholden to Amazon in some ways, Jeremy Kagan, an adjunct professor of marketing at Columbia Business School and the managing director of The Eugene Lang Entrepreneurship Center previously told CNBC Make It. And that can limit the ability to scale.
"When you go through all of the trouble of setting up a business, usually it will be in the later years when you've gotten established, you've got your employees, you've got your business, that you start really reaping the rewards of growing it, and maybe ultimately selling it," Kagan said. But with a business that depends on another brand as its primary (or only) customer, "I don't know that you have a lot of ability to grow from there."
As for the incentive program, this isn't the first time Amazon has paid its own employees to quit. The e-commerce giant also has a Pay to Quit program, in which once a year, the company offers to pay full-time associates at Amazon fulfillment centers up to $5,000 to leave the company. The company says it only wants employees who want to be there. Those who accept the offer can never work at Amazon again.
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