Amazon Transport Services reduces payouts of delivery partners

The logistics arm of Amazon India, Amazon Transport Services, has reduced payouts to corner stores that double up as delivery partners, mainly to control costs and consolidate its network.

The stores act as pickup points, receiving deliveries on behalf of Amazon's customers. The company started this as a pilot project in 2015 to increase its logistics reach, and now nearly 13,000 stores across 65 cities are a part of its network.

Amazon is looking to consolidate this because of the huge costs associated with managing a vast network of stores and regional logistics partners. Akhil Saxena, vice president of India customer fulfillment at Amazon, is spearheading the changes.

The owner of the store in Delhi-NCR said, "Previously, Amazon used to give us Rs 18-19 per package. It has now said that it will reduce the payouts to Rs 12-14, depending on the density of orders we process."

Amazon Transport's decision will force stores with low order densities to pull out, he said on condition of anonymity. Flipkart, which operates a similar network of pickup points through pharmacies and corner stores under its logistics arm Ekart, pays Rs 12-13 per package.

A spokesman for Amazon India, said, "As volumes increase, the cost structure comes down on account of economies of scale. These benefits are passed on to customers in the form of lower prices, drawing more customers to the platform (and) thereby benefiting all partners including sellers and delivery partners."