Amazon May Try Out Delivery-Sharing

In its endless search for better, cheaper, faster deliveries, Amazon may have hit upon a crafty solution: Get the crowd to do it. Through a mobile app, it might be able to manage an army of freelancers who could pick up items at a store and drop them at their final destinations. There are "folks out there who are happy to take on part-time jobs like this," said Pund-IT's Charles King.

Amazon is developing a mobile app that will be the cornerstone of an Uber-type service for neighborhood package delivery, The Wall Street Journal reported Tuesday.

Under the scheme, the app would allow Amazon to compensate people to deliver packages in lieu of using a commercial carrier. People would pick up packages at brick-and-mortar stores, where Amazon would rent space or pay a per package fee, and make deliveries on their way to another destination, unnamed sources told the Journal.

There was no indication of when the service might launch — if ever.

Amazon did not respond to our request to comment for this story.

People as a Service

Walmart kicked around a similar idea a couple of years ago. It was thinking of giving customers shopping in bricks-and-mortar stores discounts for making local deliveries to customers who had made online purchases from the retailer.

The program never achieved liftoff, but it earned some praise as a clever tactic for taking advantage of something Amazon doesn’t have: in-store customers. However, a mobile app could neutralize that advantage.

Amazon isn’t alone in mulling crowdsourced delivery. Deliv and Uber reportedly are working on schemes using contract labor. Google and eBay are testing same-day delivery crowdsourcing.

“This is People as a Service,” said Patrick Moorhead, founder and principal analyst at Moor Insights and Strategy.

“Whether it’s delivering groceries or delivering stuff out of an Amazon warehouse, it’s all about getting people to do odd jobs,” he told the E-Commerce Times.

It’s also about a grand design.

“It’s about Amazon’s desire to be at the center of everything you buy,” Moorhead added.

Christmas Fiasco

Crowdsourcing would allow Amazon to get “more feet on the street,” noted Rob Enderle, president and principal analyst with the Enderle Group.

“Like Uber, where you have lots of drivers on the street to pick up people, Amazon would have more drivers to move packages,” he told the E-Commerce Times.

“It would probably be most useful during holidays when they have an excess load,” he added.

That might help Amazon avoid the kind of fiasco it suffered in 2013 when some Christmas presents weren’t delivered on time and the company had to dig into its coffers to make those customers merry.

The crowdsourcing program is far from a go.

“I wouldn’t get too excited about this until they decide to do it,” Enderle cautioned. “They’re just looking for other ways to reduce costs.”

Shipping costs have been painful for Amazon in recent times, having increased 31 percent to $8.7 billion last year — that’s 9.8 percent of sales — compared with 8.9 percent in 2013.

Amazon ships 3.5 million packages a day.

Nation of Freelancers

If Amazon decides to enlist customers to deliver packages, there won’t be a labor shortage, noted Charles King, the principal analyst at Pund-IT.

“The popularity of ride-sharing services like Uber and Lyft have shown that there’s a willing group of folks out there who are happy to take on part-time jobs like this,” he told the E-Commerce Times.

“Hiring individual drivers to deliver packages will allow Amazon to get purchased products to customers, in many cases, faster and more flexibly than working with a dedicated service like UPS or FedEx,” he said.

There is a huge demand for this type of service, Moorhead added, but there are risks involved.

“If you’re not hiring employees, then anyone who wears your shirt or represents your company has the potential to do some very bad things to your brand,” he pointed out.

There are some potential rewards, too, especially if customer satisfaction increases.

“If you get a following of consumers happy with this kind of service, it’s going to be hard to get them to change services,” Moorhead noted.

In the future, having multiple crowdsourcing gigs will be common, he said. A person may “work for multiple companies at the same time — much like a freelance journalist.”

John Mello is a freelance technology writer and contributor to Chief Security Officer magazine. You can connect with him on Google+.

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