Amazon made a monster splash on Thursday with a couple of major announcements, spurring an uptick in the company’s stock before lunchtime on the East Coast.
The one-time online book store has grown into the world’s largest online retailer, making founder Jeff Bezos the richest man on the planet. And the company is about to rake in more money with its newest opportunities.
First, Amazon announced it is adding virtual pharmacy PillPack, which offers pre-sorted dose packaging and home delivery, to its online e-commerce arsenal.
Shortly after, the company shook things up again by announcing a new program where individual contractors around the country can launch their own Amazon package delivery businesses, buying in for as little as $10,000.
The move will allow Amazon to have even more ways to deliver its millions of products to consumers without having to rely solely on companies like UPS, FedEx and the United States Postal Service, which President Donald Trump has repeatedly called on to charge Amazon more.
I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!
— Donald J. Trump (@realDonaldTrump) April 3, 2018
While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars. The Failing N.Y. Times reports that “the size of the company’s lobbying staff has ballooned,” and that…
— Donald J. Trump (@realDonaldTrump) March 31, 2018
Senior Vice President of Worldwide Operations Dave Clark said the new program is not in response to Trump’s lobbying for increased fees.
“This is really about meeting growth for our future,” he said.
Contractors who buy in will be able to lease their own blue vans with the Amazon logo on it, buy uniforms for employees and get help growing their business directly from Amazon. Customers also will have more power over tracking their packages on a map, and could even contact the driver to change where a package is left.
Each contractor can also use his or her own vehicle to deliver the packages and don’t have to lease the vans, which can only be used to deliver Amazon packages, the company said. Individual contractors are responsible for hiring delivery drivers, with Amazon serving as the customer and paying each business to pick up packages from its 75 U.S. centers to drop off on doorsteps.
Olaoluwa Abimbola participated in Amazon’s test program, hiring 40 workers in five months. He said the number of packages the company needs delivered is more than enough for a thriving business.
“We don’t have to go make sales speeches,” he said. “There’s constant work, every day. All we have to do is show up.”
Shares of pharmacy chains got hit hard after the announcements were made. Shares of Walgreens dropped 9.2 percent to $60.16, and CVS skidded 7.9 percent to $64.54. Medication distributor Cardinal Health shed 6.3 percent to $49.59.
The package delivery announcement caused UPS to drop 2.4 percent to $105.75 a share, and FedEx declined 2.3 percent to $224.55.
The Associated Press contributed to this report.