How to Start an Amazon DSP Business

amazon dsp

If you’ve ever wanted to start and run your own package delivery business, the Amazon Delivery Service Partner may be your answer.

Entrepreneurs have been launching the businesses as an Amazon Delivery Service Partner since 2018. Many a success story starts with DSP.

With the pandemic-fueled trend towards online ordering, there’s no time like the present for you to become part of the Amazon delivery service partner program.

What is Amazon DSP?

First, it’s not a franchise. It’s a business opportunity for an entrepreneur.

The Amazon delivery service partner program connects a need – Amazon has gazillion packages to deliver – with someone who wants to be a business owner. An entrepreneur who becomes an Amazon delivery service partner gets the advantages of integration with Amazon logistics business expertise.

You’ll need about $10,000 in startup costs. In a nutshell, you run a fleet of leased Amazon delivery vans. Your drivers pick up packages at an Amazon warehouse and delivery routes.

What would your day be like? Remember that the work is 7 days a week, 361 days a year.

On a daily basis, you’ll be scheduling drivers, setting up routes, tracking progress during the day, fixing any problems, talking to workers at the end of the day, and making sure the fleet is parked and full of gas, ready to go the next day.

An Overview of the Amazon DSP Program

Your first step is to find out if the delivery service partner program is available near you. Go to http://www.logistics.Amazon.com/marketing/getting-started.

Delivery service partners typically need about $10,000 in startup costs. A DSP owner starts with up to 5 vans and delivery drivers.

Amazon offers complete training to cover all you need to know to run a delivery business. In the DSP program, you’ll train with other DSP owners.

Basically, your drivers pick up packages at an Amazon warehouse and delivery routes. Routes must be delivered 7 days a week, 361 days a year.

You lease the vans, which is common in the delivery business. The vehicles display the Amazon Prime logo and your employees wear Amazon uniforms.

Since Amazon started the delivery service partner DSP in 2018, the majority of business owners have grown to run from 20 to 40 delivery vehicles, and 40-100 employees.

What is the Average Amazon DSP Owner Salary?

The DSP program owner’s salaries vary. As with typical delivery companies, the gross proceeds are reduced by costs, mainly delivery vehicles and costs associated with the workforce.

The 10,000 startup costs come from the cost of business licensing, professional services (accounting, legal), computer equipment and software, your travel to training, and employee hiring and training.

Once you’re up and running, the revenue potential is very good. Annually, owners with 20-40 delivery vehicles are seeing gross revenue of $1 to $4.5 million.

Of course, expenses eat into the gross revenue but the profit potential is great. Expenses include vehicle leases and maintenance, administration and professional services, uniforms, and employee wages, benefits, and insurance. The net profit realized by delivery business owners after those expenses ranges from $75,000 to $300,000.

Delivery businesses are highly competitive. One of the biggest benefits of being a delivery service partner DSP for Amazon is that you’re not alone.

The Amazon training is extensive. Through Amazon, you can choose to get assistance with legal issues, as well as payroll, tax, and accounting services. You’ll also get an Amazon dedicated business coach.

Why Entrepreneurs Should Consider Starting an Amazon Delivery Service Partner Business

  1. Compared to the cost of starting a similar delivery business, the start-up cost is low at $10,000.
  2. Through the connection with Amazon, the constant workload of packages to deliver is steady
  3. DSP owners have access to Amazon technology, logistics, and training.
  4. DSP owners are the bosses of their delivery companies. Owners set up the hiring process for their drivers. Delivery service partners decide how drivers are paid and what type of benefits they receive.
  5. You’ll be partnered with a giant in the competitive delivery business. The package delivery business is growing.

How to Set Up an Amazon DSP Program Business

Once you’ve learned whether or not Amazon delivery service partners is available in your area, you can begin the process.

7 Key Steps

1. Fill in the Online Application

The online application is the first step, and it is quick. There are a series of yes-no questions.

Here’s what Amazon wants to learn about you:

  • If you have experience hiring and developing teams of workers.
  • If you’re ready to commit to being a hands-on, full-time DSP owner.
  • If you have available liquid assets of at least $30,000.
  • If you have a strong credit history.
  • If you have previously owned a business. That’s not required but it is preferred.

2. Pass the Amazon DSP Program Screening Process

The first step of the screening process is a second application. The second application is more in-depth.

You may want to update your resume to include hobbies or activities that aren’t typically included on a resume. Amazon highly values community involvement. Have you coached a community team? Have you been on local committees, which prove your community involvement? How would you engage members of your community to help you hire people?

As with any employment opportunity, you’ll be vetted.:

  • You’ll need an up to date resume that proves a steady work history
  • Your driving record should be clean, especially of moving violations.
  • You’ll undergo a background check, which will include a criminal records check and credit check.

3. Go for an Interview

In-person interviews take place at Amazon fulfillment locations, as available, and at locations nearest to you.

To learn where those locations are, go to this link: https://www.logistics.amazon.com/marketing/faq.

The interview process, from the initial quick application and through the in-person interview process can take months. There will be more than one in-person interview.

Applicants who have successfully gotten through the interview process will get advance notice of that acceptance. They can then join the Future Delivery Service Partner Program. In fact, it’s a great move.

Competition is fierce between those striving to get into the delivery service partner program. The Future DSP Program provides access to continued online and hands-on training. Those who are actively engaged in the Future Delivery Service Partner program go to the head of the line.

4. Receive an Offer and Rate Card for Your Business

The numbers on offers and rate cards can vary by area of the country and route. The rates are:

  • A fixed monthly payment based on the number of vans
  • A route rate based on the length of a route.
  • A per package rate based on the number of packages delivered.

5. Complete and Pass the Amazon DSP Program

An Amazon Delivery business owner will have 3 weeks of hands-on training in classroom and warehouse settings, gaining logistics experience. That initial period is followed by 2 weeks of instruction in the field – working with other delivery business owners.

As you’re waiting for routes to become open, take part in the Future Delivery Service Partner Program. People who are involved and active in that program are most likely to be tapped for a route when it becomes available.

By taking advantage of all the instruction that’s offered, you’ll become more comfortable and educated on all the developments in the logistics industry.

6. Set Up Your Amazon Delivery Service Partners Business Program and Employ Staff

Newbies to the program typically start with 5 vans. That means you’ll need to lease 5 vehicles and you’ll need 5 drivers, right from the start.

How do you choose from the pool of candidates? Look for people who have experience working for delivery companies. You also want to see a steady work history and logistics experience. You may choose to employ Amazon Flex drivers. An Amazon flex driver is a self-employed subcontractor.

What else? One of Amazon’s strengths as a company is its customer service. You may find applicants who have the ability to deliver packages, but not interact positively with customers. In the delivery business, disgruntled customers can ruin the reputation of a business.

Candidates should have a strong work ethic, the ability to pick up from a delivery station and complete a route, all while remaining focused on keeping customers happy. Your role as the owner is to maintain the reputation of the program, with timely deliveries and satisfied customers.

7. Get Started with Your New Profitable Business

Once you’ve ordered and received your delivery vans, electronic delivery program devices, fuel cards, and uniforms, you’re ready to pick up at delivery stations.

You’ll need “motor carrier operating authority” and insurance for the leased vehicles. Amazon has recommended vendors and has negotiated rates for the program.

Once you’ve started your business, you’ll be eligible for many different types of rewards.

Top Tips for Getting Started with the Amazon Delivery Service Partner Program

Amazon delivery partners are in charge of their own success. Everything you do – finding the right location, building your team, interviewing a driver, choosing from a pool of administrative candidates – will have a direct impact on your success, and amount of profit.

There are additional factors that affect your success, such as your own level of logistics experience and your affinity for hard work.

Here are some tips for success:

  1. Negate the startup costs with access to a Diversity Grant. Amazon is offering $10,00 grants to applicants who are Black, Latinx, or American Indian.
  2. Know your jobs market and area. What’s the status of the workforce in your location Will you have access to good workers? Take advantage of your access to Amazon company guidelines and teaching on how to hire and train people, and build a team.
  3. If you don’t have extensive logistics experience, take advantage of the support offered by Amazon. Amazon offers support to DSP partners 24/7.
  4. Business owners should be comfortable in leadership roles in a company and know-how to build a good team. Leadership is a key to success in any company.

Is Amazon DSP profitable?

Newbies start work with 5 vans. Most add more within the first couple of months.

How profitably your company becomes is up to you. Owners with 20-40 delivery vehicles earn profits from $75,000 to $300,000.

How much does Amazon pay DSP per route?

Per route pay per route varies. You’ll know the rate upfront. Amazon will supply an offer with a rate card for a route. The rates are:

  1. A fixed monthly payment based on the number of delivery vehicles.
  2. A route rate is based on the length of the route.
  3. A per-package rate is based on the number of deliveries.

Is Amazon DSP a good opportunity?

Is connection to the Amazon logo your success? Many a success story starts with the Amazon company.

With Amazon, you’ll have access to support for everything you need to run each part of a business – such as a payroll, taxes, accounting, insurances. You’ll be part of a team – on a huge, worldwide scale – yet be the leader of your team.

For entrepreneurs, the business services offered by Amazon can be a huge bonus.

Image: Depositphotos

This article, "How to Start an Amazon DSP Business" was first published on Small Business Trends



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