How Much Does It Cost to Start an Amazon DSP?

May 13, 2025
By The Badger

Thinking of starting your own Amazon DSP? Here’s what it really costs.

Launching an Amazon Delivery Service Partner (DSP) business is about having the right financial setup from day one.

To start, you’ll need $10,000 in startup costs and $30,000 in liquid assets just to qualify. That’s before you’ve hired your first driver or turned the key on your first delivery van.

But here’s the good news — leasing vehicles instead of buying can significantly reduce your upfront investment. Amazon offers attractive leasing options and discounts that can give you some much-needed breathing room in the early months.

Of course, the financial picture doesn’t stop there. You’ll also need to plan for ongoing operational costs: think payroll, insurance, vehicle maintenance, and more. Profitability is achievable — many DSPs report annual earnings between $75,000 and $300,000 — but only if your numbers are tight from the start.

In this guide, Ad Badger breaks it all down. Just real-world numbers, pro tips, and smart moves to help you decide if Amazon DSP is the right step for your business journey.

Initial Investment for an Amazon DSP Business

Launching an Amazon DSP business involves a detailed initial investment, including startup costs and liquid asset requirements. The minimum startup cost is around $10,000, covering necessary expenses such as training and equipment.

Prospective DSP owners must also demonstrate liquid assets of at least $30,000 to ensure financial stability during the initial phase.

Startup Costs Overview

Startup costs for an Amazon DSP business are relatively low, beginning at around $10,000.

This investment covers essential activities like training expenses and other upfront costs, making it accessible for small business owners entering the delivery industry.

Potential DSP owners might need to secure funding to cover this estimated startup cost, which assumes starting with five delivery vehicles.

Liquid Assets Requirement

Financial stability is key to qualifying for the Amazon DSP program.

Prospective owners must show liquid assets of at least $30,000, providing a financial cushion for business operations and personal expenses during the initial phase.

Vehicle Leasing and Associated Costs

Vehicle leasing is a major component of the initial investment in an Amazon DSP business.

Amazon provides flexible leasing options through third-party fleet management, helping DSP owners manage costs effectively.

Often, leasing delivery vans through Amazon requires no upfront costs, simplifying the start for new business owners.

Amazon also offers exclusive deals to reduce startup costs, including low-upfront-cost vehicles and various business services.

Leasing vs. Buying Delivery Vans

New DSP owners must decide whether to lease or buy delivery vans.

Leasing can significantly lower upfront costs and provide financial flexibility compared to purchasing. While buying might appear advantageous, it often leads to higher long-term maintenance costs.

Thus, leasing is often preferable for new DSP owners aiming to minimize initial capital outlay.

Amazon’s negotiated delivery vehicle leasing program offers Amazon DSPs reduced costs on delivery vehicles and third-party deals.

The Amazon DSP program offers participating DSPs the benefit of lower lease rates compared to market standards, resulting in significant savings.

Operational Expenses

Operating an Amazon DSP business involves ongoing expenses beyond the initial investment, including employee wages, insurance, training, and vehicle maintenance.

A solid financial plan to cover these costs is crucial for smooth day-to-day operations.

Examining payroll, fuel, maintenance, and insurance requirements provides a clearer understanding of ongoing costs.

Payroll for Delivery Drivers

Payroll is a major ongoing expense for DSP owners.

Delivery drivers typically earn between $15 to $25 per hour, depending on location and experience.

Employers also cover benefits like health insurance, retirement plans, paid time off, and payroll taxes, adding an extra 7.65% to overall payroll expenses.

Fuel and Maintenance Costs

Fuel and regular vehicle maintenance are essential for operational efficiency.

Regular maintenance prevents costly repairs and ensures timely deliveries, which are vital for customer satisfaction.

Neglecting maintenance can lead to unexpected breakdowns, affecting delivery schedules and increasing operational costs.

Insurance Requirements

Insurance is another critical operational expense.

DSP owners must secure liability and workers’ compensation insurance to cover potential risks.

Workers’ compensation is mandatory for job-related injuries, while liability insurance covers accidents during deliveries.

Insurance costs vary based on the number of vehicles and drivers employed.

Training and Onboarding Costs

Training and onboarding ensure operational efficiency and adherence to Amazon’s standards.

Amazon offers a comprehensive training program with virtual instruction, in-person training, hands-on training, an operations manual, and an assigned business coach.

These programs are crucial for new DSP owners to acquire the necessary skills and knowledge.

Examining training program fees and onboarding costs provides a clearer picture of these expenses.

Training Program Fees

The DSP training program ensures operational efficiency and adherence to Amazon’s standards.

It includes a week of virtual instruction, in-person training, and support from a business coach, covered by the future DSP program fees.

Onboarding New Employees

Onboarding new employees incurs additional costs for training supplies, sessions, and compliance checks.

Effective onboarding is vital for meeting Amazon’s operational standards and preparing new employees for their roles.

Technology and Software Costs

Technology investments are crucial for the smooth functioning and efficiency of an Amazon DSP business.

Essential investments include laptops and software solutions for managing daily operations.

Amazon offers legal assistance, recruiting tools, insurance options, and accounting software discounts to help DSP partners streamline operations.

Examining route optimization software and delivery management tools highlights their logistics expertise and importance.

Route Optimization Software

Route optimization software is crucial for improving delivery efficiency.

This software optimizes delivery routes and reduces fuel expenses, significantly impacting operational efficiency.

It helps DSPs manage delivery operations more effectively and ensures timely deliveries through a delivery service partner DSP.

Delivery Management Tools

Delivery management tools streamline operations in an Amazon DSP business, enhancing efficiency, productivity, and cost management while working with delivery service partners in the delivery business.

This is crucial for Amazon delivery service partners, the delivery team, and Amazon delivery station leaders at the delivery station, utilizing Amazon’s logistics tools.

Investing in route optimization software and delivery management tools is essential for effective delivery operations and improved delivery services.

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Miscellaneous Costs

Starting an Amazon DSP business involves miscellaneous costs in addition to primary expenses.

These include unexpected expenses, uniforms, and branding materials. Factoring in these additional costs ensures a comprehensive budget.

Examining uniforms and branding, along with office supplies and equipment, provides insight into these additional costs.

Uniforms and Branding

Branded attire is crucial for DSP drivers to maintain a professional appearance.

DSPs must provide Amazon-branded uniforms, ensuring a consistent and professional image.

Branding materials for delivery vans are vital for maintaining visibility and professionalism in the delivery service.

Office Supplies and Equipment

Office supplies and equipment are essential for managing daily operations efficiently.

Investing in technology, including handheld devices and software solutions, is necessary for tracking deliveries, handling administrative tasks, and ensuring operational efficiency.

These investments form the backbone of an Amazon DSP’s operational capabilities.

Profitability and Return on Investment

Understanding profitability and return on investment is crucial for any business venture.

Potential net earnings for Amazon DSP owners can be three to four times $150,000 annually.

However, there is a significant risk of losing the contract after one year of operation.

Examining expected earnings and factors influencing profitability provides insight into potential financial outcomes.

The expected annual profit for high-performing Amazon DSP businesses ranges between $75,000 and $300,000. Earnings depend on factors like location, fleet size, and performance metrics.

While potential earnings can be lucrative, success varies widely among DSP owners.

Several factors significantly impact the profitability of an Amazon DSP business.

Ongoing expenses like fuel, maintenance, and payroll can quickly add up. Delivery efficiency improvements through route optimization software reduce operational costs and enhance profitability.

Location, fleet size, and delivery area also play crucial roles in determining the overall success of the business.

Summary

Starting an Amazon DSP business is an exciting venture with significant potential.

From the initial investment and vehicle leasing to operational expenses and profitability, understanding each aspect is crucial for success.

With Amazon’s support through financial assistance and comprehensive training programs, aspiring DSP owners have a robust foundation to build their businesses.

Remember, while the journey involves various costs and challenges, the rewards of running a successful delivery service partner business can be substantial.

Embrace the opportunity, plan meticulously, and leverage Amazon’s resources to thrive in the e-commerce logistics industry.

Frequently Asked Questions

How much is the initial investment to start an Amazon DSP business?

The initial investment to start an Amazon DSP business can be as low as $10,000, which covers essential startup expenses. This financial commitment provides a foundation for launching your operations effectively.

Why do I need $30,000 in liquid assets to qualify for the Amazon DSP program?

You need $30,000 in liquid assets to demonstrate financial stability, ensuring you can support your business operations during the initial phase of the Amazon DSP program. This requirement helps mitigate the risk for both you and Amazon as you launch your delivery service.

What are the benefits of leasing delivery vans through Amazon?

Leasing delivery vans through Amazon offers the benefit of no upfront costs, enhancing financial flexibility and minimizing initial capital expenditure. This arrangement allows you to focus resources on growing your business rather than vehicle acquisition costs.

What are the ongoing operational expenses for an Amazon DSP business?

The ongoing operational expenses for an Amazon DSP business primarily consist of employee wages, fuel, vehicle maintenance, and insurance. Managing these costs effectively is crucial for maintaining profitability.

What is the expected annual profit range for an Amazon DSP business?

You can anticipate annual profits for a high-performing Amazon DSP business to fall between $75,000 and $300,000, depending on factors like location, fleet size, and performance.