Local entrepreneurs join with Amazon to launch delivery businesses

The team that makes up Delivery Response: On-Time Parcel, or DROT as known by Amazon, pose for a group photo. As an early Amazon Delivery Service Partner, the company was one of the busiest. It delivers up to 10,000 packages a day. Photo contributed.

published on April 20, 2022 – 2:08 PM
Written by Frank Lopez

An entrepreneur’s particular set of skills can come in handy in ways they never expected.

That was one of the benefits of the Amazon Delivery Service Partner (DSP) program, which helps entrepreneurs create their own independent businesses while joining hands with the largest retailer this side of China.

The Amazon DSP program was launched in 2018 to help with the e-commerce giant’s delivery needs — reducing its reliance on UPS Inc. and the U.S. Postal Service — and to connect with entrepreneurs and help them scale their own logistics business.
Since the launch, Amazon DSP has grown to more than 3,000 local operators who employ more than 260,000 drivers across the globe.

Startup costs are as low as $10,000 to lease the first five Amazon delivery vans, with more established companies operating 20 to 40 vans. Amazon provides training to recruit, hire and coach a team of 40 to 100 employees. It also provides services such as uniforms, vehicle insurance, payroll, tax and accounting software discounts as well as legal support.

The application for the Amazon DSP requires $30,000 in liquid assets to cover start-up costs and personal expenses during training and launching of an applicant’s DSP.

Lisa Watt of Fresno, president and CEO of Delivery Response: On-Time Parcel, opened her own DSP through Amazon’s program in 2019.

Each DSP is given a unique code name by Amazon. Because of a clerical error, her DSP company was called DROT instead of DROP as she intended.

A majority of Watt’s career has been in the hospitality and financial industry, moving up the ranks in mortgage finance.

Right before she started her DSP, Watt was helping corporations get ahead. She wanted to see those benefits go towards herself.

She heard about the DSP program through a friend. The qualifications Amazon was seeking described Watt perfectly.

Watt told her friend she wasn’t interested, anticipating the competition for such a program would be intense. As an early applicant, she faced an application process more rigorous than it is today.

“We were one of the guinea pigs,” Watt said. “It was an intense process — providing your bio, your financials. It was like putting together an SBA loan package,” Watt said.

Watt applied and about a week later she was notified that Amazon wanted her to travel to Seattle for an interview.

She also attended training in Seattle for several weeks, as well as a week in San Diego. Watt launched her DSP program about a week after training ended.

Watt started out with five routes and 10 employees.

Though the company is partnered with Amazon, Watt said they are still an independent company.

“We walk like Amazon, talk like Amazon and look like Amazon, but we are DROT,” Watt said.

Currently, DROT has 143 employees and covers 55 routes mainly in the Fresno and Clovis area and some in nearby counties including Madera and Tulare.

On average, DROT delivers about 10,000 packages per day.

During DROT’s first couple of weeks in business, Watt received word from Amazon that her DSP was the top ranked in all of North America.

From then on, it was a constant effort to do the best job they could.

“We need to kick butt to make sure that we always maintain this high level of integrity in what we are doing, and making sure that everyone comes home safely and every customer that we could possibly reach gets a smile on their face,” Watt said.

Rodney Hannah is the general manager of Vested Logistics in Fresno, which he runs with his son, Rodney Hannah II, CEO of the company and a former NFL tight end for the Dallas Cowboys.

Right before starting the DSP with his son, Hannah had been enjoying his retirement from Bausch + Lomb for three years after 18 years with the company in various positions. He also spent 17 years in various positions with Miller Brewing Co., as well as JC Penney for four years right after college.

After hearing about the DSP program from his son, Hannah read about the qualifications and thought they should start moving gears right away.

They applied for the program in July 2018 and were approved in November 2018. The company officially launched in 2019.

Hannah started with five routes and by the end of 2019, Vested Logistics had 82 routes.

Going into 2020, seven more DSPs were added to the Fresno Amazon last-mile station to help ease the burden. Currently, Vested Logistics operates up to 45 routes during the peak season.

Hannah said his experience managing teams is what helps lead to success in running a DSP.

“Amazon emphasized the need for people who had experience in managing teams of people,” Hannah said. “Throughout my entire career, I was managing teams of people. As my positions evolved with these companies, it involved more responsibility and managing large groups — and that’s where my strength is,” Hannah said.

Currently, the company has 95 employees, with an average of 150 to 180 stops per day. The average number of packages delivered per day stands between 6,000 and 6,500.

When first starting, Hannah said finding dedicated and qualified employees always presents a challenge, especially more so during the pandemic.

Hannah said that a big hurdle for many starting entrepreneurs is the lack of access to capital — or they just don’t have the right idea.

The DSP program allows entrepreneurs to start off with lower financial barriers, and still allows business owners to run their own company, Hannah said.

“I would encourage anyone who wants to be an independent businessperson to start a DSP. It’s a great opportunity to start a business with family or friends, and it’s going to teach you a lot about not only business but also logistics,” Hannah said. “The competition is steep though”

Amazon is currently building its second last-mile distribution center in Fresno at Olive and Clovis avenues. It is expected to open this fall. For more information about the DSP program, visit logistics.amazon.com/marketing

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *