How to Start an Amazon Delivery Business + Startup Checklist

What if you could make a living running a package delivery business for one of the biggest retailers on the planet?

That’s exactly what the Amazon Delivery Service Partner (DSP) program aims to offer aspiring entrepreneurs who want to start a new business.

While there are plenty of advantages of running an Amazon delivery business, there are some downsides that need to be considered before signing on.

What is the Amazon Delivery Service Partner Program?

Through Amazon’s Delivery Service Partner (DSP) program, you can start your own small business delivering Amazon packages. 

Essentially, you lease a fleet of Amazon-branded trucks, hire drivers, and deliver packages to customers on the retailer’s behalf. Drivers wear high-quality, branded uniforms and drive branded trucks.

You’re not buying into a franchise, but it certainly looks and feels like you are.

The goal of the DSP program is to help the e-commerce giant fill the gaps in its logistics infrastructure. And since its launch in 2018, more than 3,000 DSPs have built their own businesses. 

DSP owners leverage Amazon logistics to help keep their fleets running smoothly, and the day-to-day is very hands-on.

How does it work? Here’s what you need to know

Amazon makes it relatively simple and straightforward to join their DSP. The process starts with a simple online form, which also includes a credit check and background check.

But as you may have guessed, it’s not as easy as registering an account and getting started.

Amazon wants to know that you’re capable of running a full-time business and can lead or coach a team. They’ll assess these qualities before welcoming you into their program.

How do they determine if you’re a good fit? According to the DSP website, you’ll need to show:

• A complete and updated resume with a full work history, education, and military service (if applicable).
• Proof of $30,000 in liquid assets (cryptocurrency and business accounts excluded).

After your financial assessment, the next step is to schedule an interview. If you’re a good fit, you can start your business as a DSP owner.

Just be prepared to wait for a decision. It may take a few months for Amazon to get back to you about your application.

If you’re approved, you can expect to receive ongoing support from Amazon to get up and running.

How Amazon supports DSP owners

Amazon says that you don’t need any logistics experience to get started. That’s because they provide ample support to DSP owners, including:

• Training: This includes an introduction to Amazon and time in a delivery station environment to learn from other DSPs.
• Business coach services to help you launch and grow your business.
• Logistics expertise: DSPs get access to Amazon’s logistics tools, providers, and technology to get things up and running.
• Benefits and services, including special deals on startup assets, business services, handheld devices, uniforms, and insurance.
• On-demand support if your drivers are facing delivery issues or you need assistance with the back end of things. 

Amazon is a leader in the logistics industry, so having access to their system will give you an advantage. 

What to expect day-to-day as a DSP 

So, what does a DSP owner do? Amazon gives a breakdown of what happens in a typical day:

• Review and assign routes. 
• Check in on your team and coach delivery associates.
• Inspect delivery vehicles and equipment.
• Lead a team meeting covering safety reminders and updates.
• Monitor your delivery drivers and provide assistance when needed.
• Review business metrics to ensure you’re meeting performance goals.

Of course, you’ll also be in charge of managing the financial and administrative side of things. 

Being a DSP is a full-time job, and it does require a serious commitment. 

If you’re ready to take on that responsibility, the next question is: How much do you need to get started?

How much does it cost to start an Amazon delivery business?

Amazon says you can start your DSP business for as little as $10,000.

In the United States, a diversity grant is also available for black, Native American, and Latinx entrepreneurs to help with startup costs.

The $10K startup figure supposes that you’re starting with five delivery vehicles. Depending on your location, there may also be room to scale. Some DSPs have dozens of vehicles.

How profitable is the Amazon delivery business?

The profitability of a DSP business depends on a wide variety of factors, but Amazon says high-performing DSPs can make an annual profit of $75K to $300K. 

Read the small print, though! Compensation rates vary depending on your location, fleet size, and delivery area. Amazon’s own financial notes say:

“The annual revenue and profit potential ranges are estimates for companies performing standard or rural delivery services operating 20 to 40 delivery vehicles”.

So the startup cost is based on five vehicles — but the reported profit range is based on 20-40 vehicles. You will need to grow your business substantially to reach these kids of profits.

How much you earn will also depend on your metrics. That’s right — Amazon measures your performance. 

And how you perform is critical to your DSP scorecard, which impacts your compensation.

If you can maintain a Fantastic or Fantastic Plus ranking, you will earn additional compensation per package. Some sources say a Fantastic ranking will get you 7 cents more per package, while Fantastic Plus will bump that up to 15 cents per package.

The pros and cons of starting an Amazon DSP business

The DSP program offers business opportunities to entrepreneurs with the leadership experience and financial liquidity to succeed.

But, like with any other business venture, there are pros and cons to consider.

The advantages of becoming an Amazon DSP

• Startup costs are low. The biggest hurdle for new small business owners is having the capital to get the business off the ground. Starting a logistics business for as little as $10K is certainly a perk. 
• Reliable business. Amazon.com, Inc., is one of the biggest retailers on the planet. You’ll have a steady stream of business that most delivery companies could only dream of.
• Hands-on training and coaching. Amazon provides its DSPs with training and business coaching. 

Disadvantages of being an Amazon DSP

• Amazon claims that DSPs can make up to $300k in annual profits. But there’s no guarantee that you’ll make this much — or any profit at all. Some would argue that you may make more working as a delivery driver for FedEx or the Flex program.
• You’ll be required to follow Amazon’s rules, including having to hire your drivers as employees instead of independent contractors. Hiring employees isn’t a bad thing, but it will add to your costs. 
• Driver turnover rates are high. One driver told CNN in 2021 that turnover is so high at their terminal that they must train 150-200 new drivers monthly. Others say the average turnover rate is 90 days.
• You have no control over your routes. Amazon plans them, and you assign them. Unfortunately, if you look at the buzz in online forums like Reddit, Amazon’s routes are notoriously bad.

💡If you want more control over your business, you might prefer to start your own delivery service. That will give you the freedom to choose your own tools, including route optimization software like Routific to help you slash your cost per delivery and reach profitability faster. 

How to start an Amazon delivery business: Your step-by-step checklist

You’ve weighed the pros and cons of the DSP program, and you’ve decided that it’s the right choice for you.

How do you get started? Here’s a breakdown of each step in the process.

1. Apply online

The first step to becoming a DSP is to fill out an online application. Give yourself plenty of time for this step. Amazon says the process can take 2-3 hours.

They’ll ask some personal questions and also some questions about your ability to lead and hire a team.

Your credit score will matter when applying, so you may want to consider improving your score (if necessary) before you start the application process.

Remember — you’ll need to prove that you have $30,000 in liquid assets, too.

2. Attend an interview 

Once you complete the initial phase, the next step is to attend an interview at a local fulfillment center. You may be asked to attend several interviews.

If all goes well, you’ll receive a formal offer.

3. Attend training

After receiving your formal offer, you’ll need to complete the training program. 

Training includes a week of virtual instruction (webinars, etc.), plus in-person training at an actual delivery station.

You’ll also receive an operations manual that explains how to provide on-road assistance to your team and how to process and track orders. A business coach will be assigned, and you can reach out to them for help with issues you may be facing.

4. Lease your trucks and hire employees

Before you can hit the ground running, you’ll need to lease trucks and hire a team.

A beginner DSP can start with five delivery vehicles and a team of five drivers. 

To ensure a positive subscriber and customer experience, look for drivers with:

• Experience in logistics or delivering packages
• Excellent communication skills
• Great people skills

Once you have your trucks and team in place, the only thing left to do is start delivering packages. 

Final thoughts

The Amazon DSP program offers you an opportunity to start your own small business and gain access to valuable support and resources that will set you up for success. 

But in exchange, you give up a great deal of control over your operations and, initially, will face an income ceiling (you can only start with five trucks).

The DSP program isn’t for everyone, but if you’re committed and go into the venture with realistic expectations, you have the opportunity to build a successful and sustainable business.