Starting a delivery business might seem scary, but that’s not actually the case, all thanks to Amazon’s DSP program. So how much do DSP owners make?
What is this program, and how can you become a part of it? If you are willing to start a delivery business with the strong backing of Amazon, then keep on reading this useful guide!
What is Amazon DSP?
To reduce the dependence of Amazon on third-party delivery services, Amazon launched a program called Amazon DSP or Delivery Service Partner in 2018.
This program allows those who are interested in running a delivery business with the support of one of the biggest companies in the world- Amazon.
In Amazon DSP program, Amazon employs and trains interested individuals to start a package delivery system exclusively for products ordered on Amazon.
After joining this program, Amazon DSP owners can benefit from hands-on training, steady demand, and discounts on many services and assets.
What Do Amazon DSP Owners Do?
DSP owners are responsible for managing delivery vans, drivers, and administration staff who are delivering packages for Amazon. They are basically Amazon delivery contractors.
Starting a delivery business from scratch could be extremely challenging, and those interested in this business could benefit greatly from Amazon’s existing business setup.
Imagine being able to start a delivery business with steady demand right from the first day itself. Well, Amazon’s DSP program helps you with that.
Benefits of Being An Amazon DSP Owner
- Amazon DSP owners are given three weeks of intensive hands-on training that involves everything from choosing employees to scheduling drivers, tracking deliveries, setting up team routes, and much more. They are also given access to various technology and tools that helps them in carrying out processes smoothly.
- Liaison with Amazon means you will receive a steady stream of packages to deliver, ensuring a somewhat steady income.
- The cost of starting an Amazon DSP business is $10,000, excluding technological help, which is relatively less compared to starting a delivery business from scratch.
How Much Do DSP owners Make?
If you are an interested candidate and want to join the Amazon Delivery Service Partner program, then you might be eager to find out how much DSP owners make.
The earnings of Amazon DSP owners vary greatly as Amazon’s payment structure is calculated based on the number of vehicles, number of successful deliveries, route length, etc.
However, on average, Amazon DSP owners can expect to make anywhere between $75,000 – $3,00,000 annually in profits.
In fact, Amazon’s brochure for DSPs states that DSP owners can make:
- Generate $1-$4.5 million in revenue.
- Take home up to $300,000 in profit.
Each Amazon DSP owner can own and run as many as 40 trucks, making $7,500 per route per year.
This number does not include ongoing operational costs such as vehicle, asset, administrative, and driver costs.
So how much you earn considerably depends on how many vehicles you own. And as you can see, the operational expenses can be a lot which means you should expect thinner profit margins.
How Do Amazon DSP Owners Get Paid?
The following factors determine compensation for the Amazon DSP program:
Monthly Base Rate
DSP owners receive a monthly base rate which is also known as van reimbursement.
Amazon DSP owners usually do not own vehicles but lease them out from third parties facilitated through Amazon.
So when you lease vehicles from these third parties, the contract reimburses you for service charges, also covering the cost of the van leases. This means you do not have to worry about purchasing vehicles.
Hourly Base Rate
Hourly base rate is the compensation offered to cover the cost of running a route. This hourly base rate is calculated on the basis of:
- A set amount per hour
- Each route that dispatches that day
- The number of hours worked
Let us say you make $20 per hour per route and work for 10 hours a day; then your total for one route would be $200. So if you run ten routes, you will make $2000 in revenue, and so on.
Cost of Starting DSP Business
Although DSP owners can make as much as 1 million to 4.5 million annually in annual revenue, there are a lot of ongoing and start-up costs that reduce the profit margin greatly.
Here are the costs of starting a DSP business:
Start-Up Costs
- Business entity formation & licensing fees.
- Set up supplies – timekeeping software, laptop, etc.
- Travel for training cost.
- Professional services – lawyer’s fees, accounting costs, etc.
- Recruitment costs
Ongoing Operations Cost
- Vehicle costs – Routine maintenance, lease, insurance, and damages.
- Employee costs – Payroll, wages, etc.
- Asset costs – Uniforms, devices, etc.
- Administrative costs – Background and drug tests, Job postings, etc.
- Other professional services as needed.
Eligibility Criteria For Amazon DSP Program
Amazon receives a plethora of applications for its DSP program and has a very lengthy and competitive selection process.
Additionally, they only have limited seats available, making it al the more hard to make it through.
To be eligible, Amazon looks for the following:
- Candidates are looking for a full-time business opportunity with experience in managing teams.
- Ability to work in a fast-paced environment.
- Candidates must have liquid capital of $30,000 and $10,000 for initial investment.
- Amazon also looks at the candidate’s work history, education, financial information, etc.
How To Get Started With Amazon DSP Program?
If you meet the above eligibility criteria, then you can apply for the Amazon DSP program. Once your application gets shortlisted, this is what you will have to do:
- You would have to go through a screening process. For this, you would have to submit your resume and go through background checks. A background check will help Amazon identify any red flags in your profile.
- Once you clear this, you will be invited for a personal interview. After passing this, you will be invited for another personal interview until you reach the final stage.
- In the final stage, you are invited to join the Future Delivery Service Partner Program.
The Future Delivery Service Partner program is a pool of possible candidates. And Amazon further narrows down and chooses the best candidates from the pool when the slots become available.
- The final candidates will receive an offer letter from Amazon that will include the payment terms.
- After this, you will be required to take a three-week training from Amazon post, which you will be fully ready to run your business.
DSP Program is Available in Which Countries?
Currently, Amazon DSP program is available in the following countries:
- Brazil
- Belgium
- Canada
- Germany
- France
- Ireland
- India
- Itlay
- Japan
- Mexico
- Netherlands
- Saudi Arabia
- Spain
- UK
- USA
((https://logistics.amazon.com/marketing/faq))
Amazon DSP Driver Salary
DSP driver’s salary depends on the DSP owner and his location.
According to ZipRecruiter, however, DSP drivers make $15 an hour, or $32,225 per year on average. The top DSP drivers make as much as $19.23, and the lowest earning DSP drivers make $9.62.
Wrap Up
Amazon’s Driver Delivery Partner program is an excellent opportunity for people to start their own businesses with the support of one of the biggest companies globally.
Although becoming a DSP owner isn’t without its challenges, apart from $10,000 in initial investment and $30,000 in liquid capital, you also need to have excellent management skills, the ability to work under high pressure, etc.
If all of this does not scare you and if you manage to make it to Amazon’s DSP program, then this could be a great business opportunity for you.
We hope this article on “How much do DSP owners make was helpful for you.”
FAQs
Is Amazon DSP worth it?
Looking at the amount of applications Amazon receives for its DSP program, it is safe to think that Amazon DSP is worth it.
Not to mention starting a delivery business from scratch could cost a lot more and does not guarantee success.
However, by joining Amazon’s DSP program, you not only get to run your dream business for as low as 10,000 but also get steady demand due to Amazon’s existing network.
Is Amazon DSP profitable?
Yes, Amazon DSP is a profitable business given that you know how to manage employees, make deliveries on time, and are good with handling pressure. If you lack all these, qualities you might make the loss or meager profits.
Do I need my own delivery vehicles for DSP business?
No, you do not need to own delivery vehicles for Amazon. But you need to use commercially registered vehicles that meet local law requirements.
You also need a minimum of 120 cubic feet of cargo space for Amazon packages. You can even lease Amazon-branded vans for discounts.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.