Amazon’s Delivery Service Partner (DSP) program enables entrepreneurs to operate last‑mile delivery during e‑commerce fulfillment under the Amazon brand. It’s ideal for ambitious business owners who want to run a logistics operation aligned with one of the world’s top delivery networks.
Initial Investment and Setup Cost
1. Franchise Fee & Liquid Assets
- No formal franchise fee is charged, but Amazon expects liquid assets of approximately ₹1.5 lakh to ₹5 lakh to support setup and compliance needs. Overall, you should have ₹6–8 lakh available for a stable launch.
2. Office Space
- A small warehouse or delivery station of 200–500 sq ft is required for parcel handling and operations.
- Monthly rent:
- Tier‑1 metro: ₹20,000–₹50,000
- Tier‑2/3 cities: ₹10,000–₹30,000.
3. Delivery Fleet
- Required vehicles: ~20 vans and 40 bikes.
- Amazon may lease vans, but you can also source your own (non-branded) vehicles:
- Two-wheelers: ₹60,000–₹1 lakh each
- Vans: ₹4 lakh–₹7 lakh each
4. Equipment & Tech
- Essential infrastructure: laptops/desktops (₹25k), internet and routers (~₹10k).
5. Uniforms & Branding
- Amazon-branded uniforms and vehicle decals cost around ₹50,000–₹1 lakh total.
6. Working Capital
- Maintain ₹2 lakh–₹5 lakh initially to cover staff salaries, fuel, maintenance, and miscellaneous expenses.
Total Investment Range
Putting it all together, setting up a viable Amazon DSP operation typically requires ₹10 lakh to ₹15 lakh, excluding vehicle fleet costs which could be ₹1.5–2 crore if purchased outright—or lower if leased or rented.
Operational Requirements & Eligibility
Amazon expects selected DSPs to:
- Operate round-the-clock with 40–100 delivery associates on multiple shifts (including Sundays and holidays).
- Manage and grow a fleet under Amazon’s branding standards and logistic protocols; Amazon closely audits compliance in payroll, vehicle maintenance, and route efficiency.
- Be prepared for contractual and operational discipline—Amazon holds DSPs financially and legally accountable for service standards, accidents, or violations.
Revenue Potential & Profitability
Annual Revenue & Profit
- Annual revenue projections range between ₹1.8 crore to ₹3.6 crore, with expected annual net profit around ₹19 lakh to ₹38 lakh—assuming effective operations and route volume.
Margins & Efficiency
- Net margins generally fall between 10–15%, though well-run DSPs with efficient routing and fleet utilization may reach ~20%.
Break-even Period
- Most DSPs break even within 6 to 18 months, with scalability improving profitability as routes and delivery volume grow.
Scale and Growth
- As per Amazon policy, DSPs may operate 20–40+ routes, each route representing a delivery team. Amazon’s own disclosures estimate profit per DSP could reach $70k–$300k annually for fully scaled operations.
Key Advantages
- Brand strength and built-in demand due to Amazon’s e-commerce dominance.
- Minimal technology investment; Amazon delivers routing software, training, and operational support.
- Scalable model: add vehicles, staff, and routes as business grows.
⚠️ Challenges & Risks
- Amazon retains tight control over operations: performance breaches may lead to termination with little warning, and returning leased vans can be costly—or even leave you with repair bills into lakhs of rupees if vehicles are damaged.
- Operational complexity: High staff turnover, fleet maintenance, route efficiency, and compliance to Amazon’s audit standards add pressure and require robust management.
- DSPs take on full financial and legal liability—even for delivery crew errors or accidents—despite operating under Amazon’s branding.
Final Verdict: Is it Worth Investing?
For motivated entrepreneurs with access to working capital, fleet management capacity, and willingness to operate a high-demand service under strict standards, the Amazon Delivery Service Partner program presents a scalable and profitable logistics venture. With ₹10–15 lakh initial spend and additional fleet costs, you can build a business that returns 15–25% margins and achieves break-even within a year.
But the operational rigor is demanding, and Amazon’s control over performance and compliance is non-negotiable. If you can build a professional delivery operation with disciplined leadership, this can be a viable path to long-term logistics entrepreneurship in India.
