Amazon (NASDAQ: AMZN) has started a new internal incentive program to help its workers start their own businesses as delivery service operators. The company announced a new initiative this week that would subsidize workers who quit and become delivery drivers.
It is believed the company has made this move in an effort to meet its increasingly demanding delivery deadlines, such as one-day shipping for Prime customers.
$10,000 for Employees Who Quit Their Jobs
Amazon is expected to spend up to $800 million in the second quarter to meet its one-day shipping agreement with Prime customers. To achieve this, the company wants its staff to consider becoming Amazon branded delivery contractors.
Amazon will pay employees $10,000 and three months’ salary to start their own delivery companies. It will also provide discounts on branded delivery vans, insurance, and uniforms.
This will be a compelling option for many employees who want to leave the warehouse environment and start owner-operator businesses. In addition to the initial economic advantages, these employees would develop key skills to help them in future business endeavors.
Amazon is pushing to change its image. This latest move comes after the company implemented a minimum wage of $15 for all its U.S. employees.
Consumers See Shipping as a Major Differentiator
Amazon customers can pay $119 per year for a Prime account that includes 1-day shipping in most areas of the U.S.
Research has shown that consumers prefer to shop online when free shipping and fast shipping is available. Amazon’s one-day service makes it competitive with other retailers who are trying to catch up, including Target (NYSE: TGT) and Walmart (NYSE: WMT).
Walmart is expected to release its own program to compete with the one-day shipping deal, but it could already be too late to edge Amazon’s huge market share and mind share with the average consumer.
Amazon Stock Still One of the Strongest in Market
Amazon’s latest initiative could create more public goodwill and improve the reputation of the company. It has been criticized in the past for its treatment of employees.
Stock has performed well in 2019, and it remains one of the best growth investments on the market today. Amazon shares have increased 22.51% year to date, compared to 13.07% across the S&P 500, and 16.57% across the NASDAQ Composite Index.
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