Starting an Amazon Delivery Business
Get paid to quit your job. Sounds crazy, right? Not to Amazon, which is giving some of its employees $10,000 to start their own package delivery businesses. Why?
Ten years ago, who would have thought we’d become so impatient to receive our orders? ‘Two hours? TWO? HOURS?” In relentless pursuit of reduced shipping times, to get your orders into your hands faster, Amazon is exploring all sorts of different strategies, including delivery by drone which is still in the testing phases.
For a while now, your Amazon orders have arrived via lots of of different carriers – USPS, FedEx, UPS, some dude in a ’95 Accord, some chick in a souped up Camaro – so why would Amazon support, much less fund, these businesses?
From Amazon’s perspective, it offloads a tremendous amount of liability. I’m pretty sure whatever contract these delivery businesses sign to become an Amazon vendor places the risk of loss, accidents, and damage to property or people squarely on the small business. That said, it’s a great opportunity for people to reclaim a little autonomy and get a business started. It’s also a great opportunity for insurance brokers to research the types of insurance these businesses will need and be ready to churn out quotes.
So, how would one start a package delivery business in Nevada?
As with many thing, Amazon has done an amazing job outlining the process of getting approved as a vendor. For a primer on how to start a business in Nevada, this is a good place to start. We’d of course strongly recommend forming an entity, likely an LLC. This might even be a requirement to serve as an Amazon vendor. In addition to the reasons listed in that article, you will be traveling all over the valley to carry out the services, which means being on our roads. With other drivers. Who can’t drive. Especially in the rain, when it rains. Don’t get me started. So, in addition to the insurance policy you should have (and is also probably a requirement), having an entity puts a protective corporate veil between your business activities and your personal assets. In other words, if you were to blow a stop sign and crash into someone while en route to making a delivery, your LLC should protect you from being personally liable. As with anything legal, however, there are circumstances under which you would be held liable but we’ll tackle those in another post.
Once you have an entity and your EIN number, and have a bank account you’ve put a little money in, then you’ll want to contact an insurance broker to get a sense of how much your policy will cost. Then, when you’re ready to file your application with Amazon, head to https://logistics.amazon.com/. They ask certain questions to qualify applicants including whether you’re a military veteran, if you have experience building a team, if you’ve ever owned a business before, if you’ve filed for bankruptcy, and if you have at least $30,000 in available cash to fund your startup. We’ve submitted a test application and will report back as we learn more about the process.
Once you’re approved by Amazon, and 30-45 days before you plan to transport your first package, you’ll want to apply for your local license. Though these categories sometimes change, you’ll want to research Delivery Service licenses for the City of Las Vegas, and Clark County (NAICS 492000). Unless you’re a regulated business, Henderson requires general business license forms. The City of North Las Vegas still requires you to send a description of your activities so that they can send you the correct forms.
If you’re going into business with someone else, even if that someone is your spouse (and sometimes especially if it’s your spouse), you’ll want to have an owners’ agreement. It’s a lot like a prenuptial agreement because going into business partnership is very similar to getting married, with all the associated emotional and financial pitfalls.
Stay tuned for more information as we learn more about Amazon’s process!