Starting and managing a successful courier business requires tenacity, hard work, and the ability to handle all aspects of the business to ensure happy customers. Courier services and delivery drivers are in high demand in this age owing to the rise in online shopping.
By becoming a courier business with an established brand like Amazon, you benefit from working with the biggest online retailer in the world while having access to cutting-edge technology that offers a viable revenue model based on how many packages are delivered.
Anyone interested in starting their own courier business should consider becoming an Amazon delivery service partner. Running a courier service as a service partner indeed comes with many benefits. As a courier business with Amazon, your business will run independently but will function as part of the Amazon family. This entails that you’ll have access to business and financial support that other courier businesses don’t have.
Steps on How to Start a Courier Business with Amazon
Table of Content
Conduct Market Research
It is very important to find out more about the opportunity at hand and what it would mean for you and your immediate environment. Carry out extensive research to identify not only the need for courier services in your area but also other existing competitors in and within your area. Also try to note an unmet need in the area, like the availability of couriers who will take on rush jobs or large, heavy packages.
a. Who is the Target Market?
As a courier business with Amazon, note that your job will be to fulfill deliveries placed through Amazon. While you will indeed run your own business and manage your own fleet of vehicles, you are working in direct partnership with Amazon to meet their own customer needs.
According to reports, Amazon’s target audience remains middle and upper-class consumers (evenly split between genders) with home computers or smart devices, aged 18-44 as of 2022.
b. Is Courier Business with Amazon a Profitable Business?
Yes. Working in alignment with the Amazon brand, even if you are one of numerous hundred delivery companies, is extremely lucrative and powerful. According to reports, delivery service business owners with Amazon can earn up to $300,000 a year in profit with startup costs as low as $10,000.
This is very possible especially since Amazon will support you by providing a dedicated business coach and access to value-added services, like uniforms and vehicle insurance, to ensure you run your business efficiently.
c. Are There Existing Niches in the Industry?
- Same-day delivery courier
- International courier service
- Drone delivery service
- Van courier
- Motorcycle courier
- Bicycle courier
d. Who are the Major Competitors?
Note there are over 100 Amazon delivery companies banded together to compete with delivery giants UPS and FedEx. Aside from these major brands, other notable competitors to be aware of include;
- LaserShip Inc.
- OnTrac Inc.
e. Are There County or State Regulations or Zoning Laws for Courier Business with Amazon?
Yes. Amazon is not currently looking for courier service partners in all areas. While a good number of states and cities across the US are eligible for the program, you could still be denied merely because you don’t live in one of them.
However, note that there are other basic requirements and regulations to deal with when looking to partner with Amazon, and these regulations will surely influence how long it takes your business to start. Amazon states that “From starting your application to making your first delivery, becoming an owner can take as little as one month or as long as six months, depending on the availability of opportunities in your area.”
f. Is There a Franchise for Courier Business with Amazon?
Yes. The official name that Amazon uses for owners of its package delivery franchises is “Amazon Delivery Service Partners.” According to reports, with an initial investment “as low as $10,000,” anyone can start a courier business that hires drivers and leases up to 40 vans to deliver packages from warehouses to homes.
Have it in mind that your drivers will wear Amazon-branded uniforms and the vans will also be designed with Amazon Prime logos — but the business will be owned by the entrepreneurs themselves and contracted by Amazon to complete deliveries.
g. What Do You Need to Start a Courier Business with Amazon?
Amazon notes five qualifications for their Delivery Service Partner program
- Experience in hiring and developing great teams.
- A willingness to commit to being a hands-on DSP owner full-time.
- Liquid assets of at least $30,000.
- A strong credit history.
- Previous business ownership is preferred, but this isn’t a requirement.
According to Amazon, after you express interest (and confirm that you have $30,000 in the bank); there is a longer application you will be required to fill out. After that, it can take anywhere from one month to six months to get started as a Delivery Service Partner.
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a courier business are;
- Everyday Couriers
- Quick Express
- Delivery Express
- Supreme Couriers
- Fast Lane Deliveries
- Pigeon Flights
- Neighborhood Couriers
- One Mile
- Next door Messenger
- Atlas Delivery
- Sunrise Delivery
- Eagles Speed
- Earth Flash
- Solo Logistics
- Monsoon Express
- Wilding Courier
- Reliable Couriers
- Checkers Air
- Custard Express
- Delivery Experts
Register your Business
a. What Type of Business Structure is Best for Courier Business with Amazon?
This is one very crucial decision you will have to make sooner rather than later, as you’ll need it when applying to work with Amazon, or even when seeking a business license and a federal tax identification number. While you can choose to start as a sole proprietorship, note that experts suggest you consider registering as an LLC.
A Limited Liability Company (LLC) protects your personal property, as it is seen to be separate from your business, as long as you adhere to certain guidelines of keeping your business separate from your dealings.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Pick a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Courier Business with Amazon?
The licenses required to start this business will vary based on your business location and concepts; however, here are some basic licenses to consider.
- General Business License
- Zonal Permits
- Seller’s Permit
- Sales Tax License
- Home Occupation Permit
d. What Type of Certification is Needed to Open a Courier Business with Amazon?
While there are no required certifications needed to work as a courier business with Amazon, it is still recommended you consider some delivery business owner courses to boost your industry reputation. Some of these courses mentioned below will provide you with certificates carrying your names.
- Certified Manager Certification (CM)
- Master Project Manager (MPM)
- ITIL Foundation
- Six Sigma Green Belt
- Computer Service Technician (CST)
- Standards Professional Certification (CStd)
- Project Management Professional (PMP)
e. What Documents are Needed to Open a Courier Business with Amazon?
- Business License
- Business Plan
- Driver Contracts
- Business and liability insurance
- Federal Tax Payer’s ID
- Franchise Agreement
- Operations Manual
f. Do You Need a Trademark, Copyright, or Patent?
As a courier business with Amazon, aside from protecting your business name, you might have no reason to bother with intellectual property protection.
Do your Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Courier Business with Amazon?
You need to have at least $30,000 in liquid assets to set up your Amazon Delivery Service Partner company. Note that this will cover the essential expenses of setting up a business in the US, including licensing, hiring delivery personnel, training costs, and other extra costs.
However, to help keep the start-up costs low, Amazon offers to provide access to third-party deals on costs like leasing the vans, getting insurance, and buying mobile devices with data plans.
b. What are the Cost Involved?
- Setting up a business name and corporation: $150 – $200
- Licenses and permits: $200 – $300
- Insurance: $100 – $300
- Business cards and brochures : $200 – $300
- Website setup: $1,000 – $2,000
- Vehicle leases on Amazon’s branded vans: $0 – $20,000
- Initial marketing budget: $200 – $500
- Branded uniforms for employees: $300 – $1,700
- Handheld devices for scanning packages: $600 – $2,400
- Fuel cards: From $2.19
- HR costs (background checks, drug tests, and interview costs): $400 – $1,200
- Accounting services and payroll: $1000 – $3,000
c. What Factors Determine the Cost of Opening a Courier Business with Amazon?
- The Cost of Insurance
- The Cost of registering the Business
- Liquid Assets
- The Choice of Location
- The Necessary Licenses and Permits
d. Do You Need to Build a Facility?
No, you won’t need an office, a warehouse, or a fixed business location. To start and run this business, all you need is a reliable method of transport and preferably one with large storage space, so you can carry large items and multiple orders at a time.
You can start your business from home, by yourself. As a courier business with Amazon, you also get the benefit of operating out of an Amazon delivery station, reducing or eliminating the need to operate your facility.
e. What are the Ongoing Expenses for Running a Courier Business with Amazon?
- Vehicle maintenance
- Fleet management software
f. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner): $54,600/ Year
- Human Resources and Admin Manager: $48,930/Year
- Information Technologists: $46,800/Year
- Courier Drivers: $41,579/Year
- Accountant: $38,710/Year
- Call Center Agent: $23,490/Year
g. How Do You Get Funding to Start a Courier Business with Amazon?
Although Amazon provides its courier partners with exclusive deals on insurance, handheld devices, vans, and other services so that they can get up and running as quickly and as cheaply as possible, you may still need to source external funding. Options to consider include;
- Business loans
- A business line of credit
- Friends and family
- Angel investors
Write a Business Plan
a. Executive Summary
Eagles Speed will be a new Amazon Delivery Service Partner in the city of Oregon tasked with the delivery of essential goods and packages to members of our community. Eagles Speed will be an independent owner-operator business that will hire, train, develop and retain an experienced group of motivated delivery professionals who will efficiently deliver Amazon packages to people within our area.
As a DSP, we will schedule our drivers, set up routes, hand out devices and do equipment checks daily. We will also provide coaching and motivation for our team as well as monitor success metrics to ensure we always offer exceptional customer service.
b. Products and Service
Just as it was noted above, Eagles Speed as an Amazon Delivery Service Partner will primarily deliver essential goods and packages to members of our community. Amazon will provide us with the technology and the tools necessary to run our delivery franchise successfully.
c. Mission Statement
Our mission at Eagles Speed is to strive every day to meet performance levels set by Amazon and to meet with Amazon’s representatives and our account manager to add a specified number of routes in a week.
Our vision at Eagles Speed is to get steady access to Amazon’s existing courier technology and their guaranteed customer demand to grow our business. We also intend to enjoy a reliable delivery volume, special discounts on vehicle leases, continual training, and many other benefits.
d. Goals and Objectives
- Establishing a credible and dependable brand.
- Providing the best services in the sector.
- Maintaining 100% customer satisfaction.
e. Organizational Structure
- Chief Executive Officer (Owner)
- Human Resources and Admin Manager
- Information Technologist
- Courier Drivers
- Call Center Agent
a. SWOT Analysis
- Amazon brand reputation
- Benchmarked training programs ensuring professionalism and efficiency.
- The use of fast, eco-friendly delivery vehicles (bicycles).
- On-time deliveries
- The time needed to adapt to new technology
- Damage in transportation
- Over-dependence on the US market
- Increasing fuel rates
- The ability to balance time devoted to operations versus business development.
- The use of digital marketing by Amazon
- Innovation in the company
- Amazon’s quest to make delivery faster
- Intense competition
- Currency fluctuations
b. How Do Courier Businesses with Amazon Make Money?
According to reports, Amazon’s payment structure is based on the number of vehicles, route length, and the number of successful deliveries. While per route pay will surely vary, you will know the rate upfront. Amazon will supply an offer with a rate card for a route. The rates are:
- A fixed monthly payment based on the number of delivery vehicles.
- A route rate is based on the length of the route.
- A per-package rate is based on the number of deliveries.
c. Payment Options
- Payment via bank transfer
- Payment via online bank transfer
- Payment via mobile money transfer
d. Sales & Advertising Strategies
When you work as a courier business with Amazon, Amazon works to ensure that your business keeps growing. They are tasked with providing delivery jobs so you can focus on building a great team and developing your people.
A Delivery Service Partner delivers packages and essential goods to their community. As an owner-operator, you will be hiring, training, developing, and retaining a team of delivery associates, who will deliver thousands of packages to Amazon customers in your area.
a. How Much Should You Charge for your Service?
Note that Amazon will most often dictate how much you earn from the services you offer to the company. Just as was noted above, Amazon’s payment structure is based on the number of vehicles, route length, and the number of successful deliveries. You’re paid based on a fixed monthly payment.
b. How Much Profit Do Courier Businesses with Amazon Make a Year?
According to Amazon, if you own one of these franchises and have around 20 to 40 vans, you could generate revenue of around $1 million to $4.5 million per year and your profits will be around $75,000 to $300,000 per year.
c. What Factors Determine the Amount of Profit to Be Made?
- Length of the route
- per package rate
- Number of vehicles
- Number of successful deliveries
- Business expenses
d. What is the Profit Margin of a Courier Business with Amazon Business?
According to Amazon, the gross margins generated from serving as the company’s courier service partner is extremely high with $.80-$.90 of each dollar of revenue generated going towards gross profit.
e. What is the Sales Forecast?
- First Fiscal Year (FY1): $258,000
- Second Fiscal Year (FY2): $720,000
- Third Fiscal Year (FY3): $1,470,000
Set Up your Office
a. How Do You Choose a Perfect Location for Courier Business with Amazon
According to Amazon, this opportunity is only offered near its 75 delivery stations, which are located all across the country. Courier businesses with Amazon will have to operate in the most populous cities in the country, where the economics of delivery are often stronger thanks to population density and the volume of business.
Have it in mind that Amazon Delivery Service Partners will also get the benefit of operating out of an Amazon delivery station, reducing or eliminating the need to operate their own facilities.
b. What State and City are Best to Open a Courier Business with Amazon?
- Riverside/San Bernardino, California
- Philadelphia, Pennsylvania
- Riverside/San Bernardino, California
- Atlanta, Georgia
- Chicago, Illinois
- Dallas/Ft. Worth, Texas
c. What Equipment is Needed to Operate?
Coupled with choosing the right courier vehicle, there are other types of equipment that can help you get your courier business off to the right start.
- Tractor or trailer for larger goods
- Paper goods and miscellaneous office supplies
- Technology to run the business (e.g., phones, laptops, tablets)
- Standard dolly or manual hand truck
- Moving and packaging materials
- Cargo straps, blankets, and other protective devices for hauling
- GPS units
The hardest part of being a courier business owner with Amazon is hiring, training, and managing a high-performing team. Owning a courier business that serves Amazon takes strong leadership coupled with a lot of grit and hard work.
Consider using the best software to recruit the most important people in your business – your drivers. This software is designed for hiring employees at scale. It’s leveraged by top courier companies to hire different workers at one time and it makes it an ideal recruitment platform for new DSPs to source and hires their drivers.
You’re expected to show leadership skills to train employees and let them know what’s expected of them. You also need to set up payroll, and human resources and use effective shift scheduling software to plan your drivers’ shifts.
Launch the Business Proper
After you must have scaled through the entire necessary Amazon training, note that it’s now time to see how your business fares in the real world. Just as with any other business, there will be some rough patches the first few days you make deliveries.
Truth be told, Amazon expects this, and they have support personnel to help you resolve issues. But aside from that, it falls on you to grow your business and make it profitable. Amazon will continue to provide guidance, but you are the one in control here, so make the most of the opportunity you have.
a. What Makes a Courier Business with Amazon Business Successful?
Becoming a courier business with Amazon comes with many benefits. However, as with any new business venture, you first have to consider the upfront costs of running a courier business before committing to anything. To ensure you achieve success in this business, here are simple tips to consider;
- Use a digital fleet tracking service to increase cost efficiency and visibility
- Add GPS live tracking technology to monitor compliance, driver-performance and also get instant alerts
- Use configurable fleet reports to visualize your fuel, maintenance, and performance metrics and make the necessary changes to enhance your delivery business
b. What Happens During a Typical Day at a Courier Business with Amazon?
On a typical day, you can expect to carry out the following tasks:
- Schedule drivers for delivery routes
- Set up your routes for the day, hand out equipment to drivers, and ensure that all vehicles are properly working
- Lead a morning huddle to inspire and inform your drivers about the goals for the day
- Track driver progress during the day and deal with any issues (flat tires, trouble delivering packages, etc.)
- Debrief delivery drivers at the end of the day, addressing any issues that arose with packages or routes
- Ensure vans are fueled and parked for the night, as well as address any vehicle maintenance needs
- Receive feedback from your local Amazon delivery team
- Consult with Amazon support personnel and your account manager for help with issues like routes
- Manage and evaluate your team’s progress on an ongoing basis, always striving to hire and nurture the best talent you can
- Stay aware of advancements in eCommerce and delivery technology
c. What Skills and Experience Do You Need to Build a Courier Business with Amazon?
- Previous industry experience
- Geographic knowledge of the area
- Organization skills
- Attention to detail
- Customer service skills
- Troubleshooting skills
- Adaptability Skills
- Accounting Skills
- Creativity Skills
- Strategy Skills