It sounds like Amazon strong arms these companies into ONLY serving them.

FTA: "The incident is notable as it appears to be the first public example in the United States of Amazon delivery service partners, small businesses that deliver packages exclusively for Amazon"

This is the program for Amazon Delivery Service Partners https://logistics.amazon.com/

Seems to me it's basically Amazon Flex but for people with capitol who want to be able to get up and started with their "own business." But when you join you can't contract for anyone else.

> It sounds like Amazon strong arms these companies into ONLY serving them.

I don't really understand this. Amazon can't "strong arm" you unless you let them. If Amazon "requires" you to dump your other clients, you can also "require" that such a clause means they must offer compensating guarantees and more money.

Sheesh.

Don't start a business where the business plan is to have only one customer, or at least if you do, don't complain when they realize they have you over a barrel.

>Don't start a business where the business plan is to have only one customer, or at least if you do, don't complain when they realize they have you over a barrel.

This is great advice, such good advice that it should be given over and over.

Unfortunately, there is someone out there who hasn't heard it yet. Amazon will just shop and shop until they find that person.

It's a rookie mistake. I signed a couple bad contracts before I learned that lesson.

I like to think of this as the "un-lucky 10,000"[x]

[x] - https://xkcd.com/1053/

My impression is that these businesses are started specifically to work for Amazon.

I wouldn't start such a business without an ironclad contract with Amazon (or anyone else, for that matter). Not a chance.

That's exactly it. You get sold on "You get a slice of the amazing growth of Amazon", but are buying into the fact Amazon can cut you out at any time, for any reason, and you have no recourse.

> the fact Amazon can cut you out at any time, for any reason

That's why you READ THE CONTRACT before signing it, because they can't do that unless it is in the contract. It's the whole point of a contract.

Now, if you don't like the terms in the contract, negotiate. Yes, you can negotiate. Yes, you are entitled to negotiate. Yes, you are a sucker if you accept the other party's opening default contract.

Or perhaps "don't get into a contractual relationship with someone much more powerful than you.

But that's exactly the point of the system Amazon set up. They don't want to deal with UPS/USPS/etc.

I once had a contract with a very large and powerful corporation. They violated the terms. They laughed at me. I sued them and won.

Contracts work, they're a great leveler.

P.S. The breach was so bad, my lawyer took the case on contingency.

I'm curious: did they violate their contract terms, or did they violate terms that you negotiated onto them.

The latter.

Having negotiated thousands of contracts in my career, and litigated several dozen times when things didn't work out, I hope cruel experience never dulls your enthusiasm for how contracts should work, as opposed to how it all does work in practice.

It's even worse than that, Amazon will razzle-dazzle you with that "amazing growth" potential, but they likely don't highlight the fact that you are entering into a monopsony franchise. Except it isn't at all like FedEx, where the franchise is the route--for Amazon, they get to decide arbitrarily what, where, when, and how you deliver to whom, all while dictating your employee's pay and everything about your equipment.

How is anybody supposed to craft a business plan when Amazon can't guarantee what sort of business you're gonna do, and also change it for whatever reason they like?

I am altering the deal... pray I do not alter it further [MANIACAL LAUGHTER emanates from THE FLYING FOX]

I've heard of this happening with small companies. They have a product, are slowly growing their business then someone big like costco wants to order a LOT of the product for sale everywhere.

It's risky to ramp up the business when the one customer may (and will probably) stop ordering abruptly.

also, why don't consumers spread their amazon purchases evenly throughout the week? :)