If you assume a driver’s wage is at least the Seattle minimum wage of $15 per hour, add nominal fulfillment and delivery costs of $5 per order (the contractor’s fuel, car etc.) and nominal sales and marketing and general administration costs of $5 per order, Amazon needs to fulfill close to eight minimum order ($35) deliveries per hour to breakeven just on the variable costs
Across 25 associates, the average number of orders was only 3.
There's a third option for how this service survives: increase adoption so that:
- variable SG&A drops from $5 per order
- stops are closer so delivery costs drop from $5 per order
Across 25 associates, the average number of orders was only 3.
There's a third option for how this service survives: increase adoption so that:
- variable SG&A drops from $5 per order
- stops are closer so delivery costs drop from $5 per order
- drivers can deliver more orders per hour