By Debbie Cockrell
The News Tribune (Tacoma, Wash.)
WWR Article Summary (tl;dr) “More than $4 of every $10 spent online in the U.S. is on Amazon.com,” according The Wall Street Journal, “and the number of its deliveries topped more than a billion last year, according to analyst estimates.”
The News Tribune (Tacoma, Wash.)
Some days, it’s a fire hose of announcements streaming from Amazon.
To recap Thursday’s flurry of news from the online retail giant:
Amazon’s $1 billion acquisition of PillPack.
The pharmacy startup delivers medications via mail order in pre-sorted packaged doses and organizes refills and renewals. It’s particularly appealing for patients who must keep track of multiple prescriptions daily.
“PillPack is a smart play by Amazon,” Bob Niedt, Kiplinger.com’s online editor, told The News Tribune in an email. “Its acquisition of Whole Foods had a big hole in it: No pharmacies in Whole Foods stores, and for traditional grocers, in-store pharmacies are gold.”
PillPack’s cofounder, T.J. Parker, the son of a pharmacist, was featured in Forbes’ 2015 30 Under 30 list of innovators.
“I didn’t want to work at a traditional retail pharmacy,” Parker told Forbes in a 2015 interview. “I wasn’t interested.”
At that time, Forbes estimated PillPack would make $15 million in revenue, which grew to an estimated $100 million last year, according to CNBC. And that’s before Amazon’s involvement.
The deal is subject to regulatory approvals. On Wall Street, CNBC reported the announcement caused Walgreens, CVS and Rite-Aid collectively to lose billions of dollars in market value, with Amazon gaining billions for its own market value.
CVS, for its part, told CNBC, “We already have the capabilities that PillPack is offering and we have scale in the business.”
The St. Louis Post Dispatch reported in October that Amazon had received approval for wholesale pharmacy licenses in at least 12 states: Nevada, Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New Hampshire, Oregon and Tennessee, with an application pending in Maine.
It has not applied for such a license in Washington state, according to a Department of Health records check.
An unidentified source told The Wall Street Journal the PillPack purchase was made with the intention of keeping the brand and the pharmaceutical licenses.
No word yet as to how or if PillPack will transform into an in-store model, though deliveries theoretically could be made to the Amazon storage lockers at Whole Foods.
Amazon’s call for entrepreneurs to start delivery businesses.
Amazon’s sprawling retail marketplace, already heavily reliant on third-party entrepreneurs, is looking for a similar small-business model for deliveries not involving FedEx, UPS or the U.S. Postal Service.
“More than $4 of every $10 spent online in the U.S. is on Amazon.com,” according The Wall Street Journal, “and the number of its deliveries topped more than a billion last year, according to analyst estimates.”
Amazon’s pitch emphasizes the enormity of the potential for startups: “Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles.
“Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services.”
The plan is to bring on “tens of thousands” of delivery drivers nationwide to join its existing network, which beyond the main name-brand carriers, includes individual drivers working for Amazon Flex.
If you’re curious about your own driving opportunities, a YouTube review posted by GeekWire on Christmas Eve showed the reviewer delivering three packages in the Seattle area and earning $60 (minus gas). The reviewer said his apartment deliveries were more complicated than those to houses, and noted questions from recipients about deliveries by unmarked vehicles.
This new program addresses the latter issue, with mention of uniforms and branded vehicles.
“To help keep startup costs as low as $10,000, entrepreneurs will have access to a variety of exclusively negotiated discounts on important resources they’ll need to operate a delivery business,” Amazon said. “The deals are available on Amazon-branded vehicles customized for delivery, branded uniforms, fuel, comprehensive insurance coverage, and more.”
Also of note, Amazon says it’s “committing $1 million toward funding startup costs for military veterans, offering $10,000 reimbursements for qualified candidates to build their own businesses.”
Keep in mind if you are intrigued by this idea to start your own delivery fleet, or work for one, or even drive for Amazon Flex, there are insurance considerations.
Your personal insurance isn’t going to cover you “if you are engaged in activity as a commercial driver, whether for passengers or packages, and are being paid,” said Kenton Brine, president of the Northwest Insurance Council. “There are clear exclusions in personal policies on this.”
“Contact your insurer and make sure you are covered,” he added.
For those interested in starting a delivery company, Amazon has set up a page: https://logistics.amazon.com/
“With President Trump’s questioning of the Postal Service delivering Amazon packages … and getting paid by Amazon, the need to secure other delivery options is likely more urgent for Amazon,” said Niedt of Kiplinger’s.
The U.S. Postal Service, in response to The News Tribune for comment, didn’t seem too concerned about Thursday’s announcement.
“The Postal Service needs to earn its customers’ business every day by providing great service at a competitive price,” the agency said in a statement, “and we continue to attract e-commerce customers and business partners because our customers see the value of our predictable service, enhanced visibility, and affordable pricing.”
Amazon announces upgrades to Fire tablets.
In addition to offering a new Fire HD 10 Kids Edition, Amazon is upgrading its Fire tablets to become Echo Shows (Echo with a screen), bringing a renewed focus to its tablet (separate from its Kindle e-readers).
“We’re now taking that Alexa experience one step further with Show Mode and the Show Mode Charging Dock,” the company said.
“Place your tablet into the dock and it transforms into a more immersive Alexa experience — just ask to see the weather, news, a TV show, make a video call, and more; pick up your tablet from the dock to access your favorite apps, books, and websites.”
The rollout on existing Fire HD 8 and Fire HD 10 tablets will start Monday (July 2).
The upgrades follow Echo Look becoming widely available so customers can judge their wardrobes and Alexa for Hospitality coming to hotels this summer to serve as an e-concierge.
