Drone delivery services are a terrible idea. Here’s why – Retail Technology Innovation Hub


Ladd argues that the products offered for drone delivery can best be characterized as of little value and little necessity. “Yes, delivery of recipes by drone is possible, but the percentage of such deliveries will be minimal.”

He notes that according to internal Amazon documents, each drone delivery will cost $63 per package in 2025, the year the e-commerce giant aims to deliver 1 million packages a year this way.

“That’s almost 20 times the cost of an average ground delivery that Amazon does.”

“It is currently estimated that $4.50 to $5.50 is spent per package when shipped via third party delivery partners. It costs approximately $3.47 per package for products shipped through Amazon’s own logistics network.”

Ladd explains: “From a research perspective, I question the wisdom of using drones when a cheaper and more efficient solution is to stock vans with the most requested products and allow access to the vans via an app.”

“This model allows consumers to call a store to come to their home 24 hours a day, 365 days a year. In many housing estates, the vans can drive autonomously.”

Instead of one drone delivery, a van can make many deliveries to many customers. The optimal goal of any last-mile delivery solution is a ratio of many vehicles making many deliveries — something that cannot be achieved with drones, Ladd believes.

“I would also like to point out that drones are actually flying leaf blowers. I can’t imagine that any homeowners association would authorize the use of loud drones to deliver Snickers bars and Diet Cokes. (I spoke to several HOAs who contacted me and I warned them not to allow drones).”

Another issue is liability. Recently, an Amazon drone crashed in Oregon, starting a forest fire.

“Who is liable when drones crash into houses and set them on fire? Note: It will not be the drone company or retailer that brought the drone to market,” says Ladd.

He concludes: “Do drones have their place? Yes. Absolutely. I am not anti-drone. I am against using drones where they do not make sense.”


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