Amazon’s current vans are based on the 2018 Mercedes-Benz Sprinter 2500, which has a cost price of $50,860. You cannot buy an Amazon van on your own, but you can join Amazon’s Partnership Program to lease them through Amazon. Partners then hire drivers to drive the vans and do deliveries with them.
Amazon’s Partnership Program means that van drivers do not work for Amazon directly; they work directly for Amazon’s Partners. As a result, the Partners let the van drivers they hire use the vans to deliver packages.
The partners that hire the delivery drives also do not buy the vans themselves; they lease them from Amazon. Amazon’s partners are trying to build up their own businesses by growing the number of routes they serve and the number of drivers they hire to do this.
Amazon would have bought their vans for a lower price than most people get them for, as they placed an original order for 5,000 in 2018 and then later ordered a further 20,000.
This may seem like a large order, but it is not as large as their latest venture. Amazon intends to replace their fleet of delivery vans with electric vans and so has now ordered 100,000 all-electric delivery vans from the US car maker Rivian.
Amazon has invested $700 million in the company and claim they will have 10,000 all electric vans on the road in 2022 and all 100,000 on roads globally by 2030.
Used Amazon Vans
The dedicated Amazon vans were only introduced in 2018, and so currently most of them are still within their service life. When they do become available for resale, it is doubtful that Amazon will sell them directly. It is more likely that they will be sold on their behalf by their delivery partners via auction.
If you are considering buying one of the retired Amazon vans when they become available you should perhaps think twice.
Although the vans may have been professionally maintained they will still have been primarily used as delivery vans. This means that in many cases they will have undergone short trips with an abundance of stops. While this may be what they were designed for, most vehicles will reach better longevity by having regular, long uninterrupted drives.
What Amazon Vans Are Used For
Amazon uses their vans for what they call ‘the last mile’ of delivery. This is the delivery of packages from their depots to the actual addresses. Until 2017 Amazon had relied on UPS, FEDEX, or the US Postal Service for this, the last leg in delivery.
When deliveries in 2017 exceeded 5 billion a year, the company decided it was time to organize their own system for delivery for the last mile.
Delivery Service Partners
Instead of creating one huge network of delivery vehicles, Amazon decided to invite people to become delivery service partners, each operating a minimum of four or five different routes.
It was advertised that to be a delivery service partner, all you would need is $10,000.
The idea was that each partner would control their own staff of drivers, their own vehicles and deliver a minimum of four to five routes. This would mean that Amazon did not have to hire drivers nor maintain their delivery vehicles as this would fall under the responsibilities of their delivery partners.
In exchange for maintaining these routes, Amazon vans would be made available for the partners to lease plus they would be guaranteed packages for delivery.
To be accepted as a delivery partner though there are other criteria Amazon expects you to meet besides having the $10,000. Potential partners would also be expected to have a good credit history and liquid assets of at least $30,000. Amazon insists that this is to ensure they can withstand financially while the delivery routes are in their early stages.
Although Amazon would also prefer their partners to have a background in business ownership, it is not essential if a candidate shows good entrepreneurial and business sense.
While Amazon does not guarantee the success of any of their partners, they will provide adequate work for them to be successful, especially if they grow their numbers of routes to 20 or 30.
Using Amazon and Non-Amazon Vans
Amazon insist that their partners only deliver Amazon packages in the unique Amazon vans available, however they will allow Amazon packages to be delivered in other vans.
This means that a partner does not necessarily have to lease Amazon vans, but if they do, they can only be used to deliver Amazon parcels.
Expected Income for Delivery Service Partners
Amazon predicts that if a service partner functions efficiently, they can expect to receive as much as $7,500 per route in profits annually, this is the difference between what they have to pay the staff member and other costs, and the revenue they get for doing the delivieries.
This equating to what seems like a healthy amount of $300,000 if a partner operates 40 routes.
Having less than 20 routes though will not seem as enticing, especially when FedEx delivery businesses can make as much as $25,000 or $30,000 per route, three times as much.
There may however be vast differences in what each company considers the size of each route and while FedEx is well-established, Amazon are still adjusting as necessary.
Amazon assumes that their delivery partners will be encouraged to increase their number of routes and therefore profits, resulting in the need for fewer partners. They maintain that any partner should be able to increase their number of routes from the initial 5 to 20 or more in just 3 months.
Fleet of Electric Vans
The introduction of all electric vans is part of Amazon’s pledge to be a carbon-neutral company by the year 2040. Obviously as their all electric fleet builds in numbers, their non-electric fleet will become available for resale in increasing numbers.
Ravian who are an electric vehicle manufacturer backed by Amazon, claims that their all electric vans will have an initial price of $70,000.
They also claim that the vans will be able to accelerate to a speed of 60 MPH in under 3 seconds and be able to travel as much as 400 miles on a single charge. Ravian is also suggesting that in the not too distant future their all electric vans will include driverless options.
Amazon Electric Vans Will Have Lots of Driver Aids
Amazon claim that the vans Ravian will provide for them, as well as being all electric will also feature multiple screens for driver assistance, including 360 degree outside camera coverage.
Alexa support will also be available in all their vans. The Alexa support is expected to be able to assist the driver in finding optimum routes and also be able to warn them of potentially hazardous weather conditions.
New Concept in Deliveries
It is clear that Amazon intend to try and establish a new concept in mass deliveries. Unlike previous giants in the delivery business such as FedEx and UPS, Amazon are outsourcing the actual last mile of their delivery service.
If successful Amazon may inspire other fleet delivery services to relook at their own systems and designate to partners rather than control all the vehicles and drivers themselves.
Regardless of the actual organization of existing delivery fleets, Amazon may show encouragement for them to also go electric in terms of their delivery vans.
Amazon Flex
Amazon Flex drivers don’t need an Amazon van either, they can use their own vehicle, which does not have to be a van or truck, it can even be a 4 door mid-size sedan, or SUV.
This is where people work directly for Amazon; they don’t get a salary as they are paid for the number of deliveries they do. The advantage for the drivers is they can set their own schedules and work whenever they want to.
An Amazon Flex driver uses their own vehicle, but Amazon helps them with things like 6% cashback when they buy fuel using an Amazon credit card, and other discounts
Conclusion
It is perhaps no surprise that Amazon is now taking control of their own deliveries for the last mile, considering that even before the pandemic they had over 5 billion packages delivered per year.
Each of these deliveries cost on average almost $7 each for the last mile when delivered by a 3rd party such as FedEx or UPS.
There is no doubt that in the coming years the iconic blue Amazon vans will be an increasing sight on the streets and highways. While you can be sure that these blue vans will be carrying Amazon packages, for the foreseeable future some Amazon packages may still be being delivered by other vans.
