Amazon Flex: How does this Business Model work?

Amazon Flex is the latest Business Model launched by Amazon. Basically, it is a “Last Mile Delivery” of package by non-regular and independent “Drivers”, who are locally available as per their own schedule. The “Last Mile Delivery” accounts for about 50% of the shipment cost and 80% of the unreliability of delivering the article on time, when it was being done by the conventional Delivery Persons (mostly Uber Drivers).

This Business Model works on the principle that people, while moving in their own localities, in their own vehicles, can stop for a while to deliver a packet in their own area, and can earn handsome money on a go. The best thing about this concept is that the Delivery Person can decide his own availability.

Initially, Amazon Flex was launched in selected regions like North America, Germany, Spain, Japan, Singapore and the UK, and now it has come to India as well.

Now let us see how this Business Model actually works.

When a person wants to be associated with Amazon through Amazon Flex, he/she has to download an Android App and register as “Driver” for this business. Next, he has to declare time-blocks of his availability (usually blocks of 1~2 hours) to Amazon Flex. At the start of his block, he has to visit the nearest Amazon Warehouse to collect the Packets to be delivered. Then as per the instructions provided by the Flex App, he visits each end customer and delivers the Packet.

By using this model, although Amazon has been able to manage its other end of trouble, there are still many challenges in this concept. First challenge being, the Driver may not get enough “Business” in his convenient spare hours, so he may have to select odd timings (like late nightm as per availability of the client at home). Secondly, like any other Business Model, the success of this Model also depends upon the Demand-Supply principle. If the number of Packets to be delivered are more than the availability of Drivers, then the earnings of Drivers will be good and available time slots will be as per their choice. But when reverse happens, motivation of Drivers will die out and they will quit this business. So it as to be a closely monitored and flexible and dynamic scenario, in order to be a success in long run.