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Amazon.com, Inc. (AMZN) Has a New Delivery Mantra: For the People, By the People

Amazon.com, Inc. (NASDAQ:AMZN) is almost always looking for new ways to get ahead of its rivals and cut down on ever-rising shipping costs. Its latest mantra to do the same is delivery for the people, by the people!

The Wall Street Journal reports that the e-commerce giant is now contemplating paying ordinary people like you and me to deliver packages to customers who along the way to their destination.

The project is tentatively being called “On My Way,” though nothing related to it has been made public. The WSJ, citing people familiar with the matter as its sources, says that it is possible that Amazon doesn’t go ahead with the plan at all.

For now, Amazon is already offering lockers for clients to pick up deliveries according to their expediency at 7-Eleven and other retailers. “On My Way” would store packages at retailers and alert couriers to probable package pickups by means of a mobile app.

Is Crowdsourcing the Latest Trend?

This move would basically crowdsource a few of Amazon’s deliveries. However, Amazon is not the only one trying this method out.

In 2013, Walmart tried out this “For the People, By the People” concept. Presently, Uber and Instacart are testing same-day delivery with contract workers. Google Inc. and eBay Inc. are not far behind. They are also experimenting same-day deliveries through contracted workers.

Pros and Cons of Crowdsourcing

The WSJ says that Amazon’s shipping costs increased a whopping 31% last year, while sales grew only 19.5%.

In case the Seattle-based e-commerce giant goes through with this plan, it could possibly save costs via limited adoption of freelance delivery. This would significantly increase its profits, given the size of the company.

However, this plan has serious setbacks as the cost-saving structure comes with logistical, legal and business partnership challenges in employing the program. Amazon has to come out with a fool-proof plan to avoid theft and insure that the packages are delivered safely to the customers.

Last Word

Though various companies are trying their hand at crowdsourcing, so far, none of them have been seriously able to challenge parcel-delivery giants or carriers like United Parcel Service and FedEx that usually carry the “costly leg of a package’s journey.” (According to WSJ).

At present, Amazon mainly uses UPS to get its packages delivered though it also has enlisted the U.S. Postal Service for Sunday deliveries.

“On My Way” has just started its journey, and is far from being actually launched. Amazon, for example, hasn’t decided whether to pay cash or credit for deliveries to the people, the WSJ reported.

Amazon’s success depends on its ability to weed out the cons of crowdsourcing. For now, we think it will be simpler to get those delivery drones off the ground

  • Andrew K

    crowdsourcing is ok, but unfortunately has some big “cons”… and always will. Best to use a reliable source (ie, UPS, FedEx, etc) until someone starts their own company where they provide oversight of these “crowdsourced” people. Until then, it will always pose a risk and not be fully effective to the commerce giants.