![]() And if you try a little harder, those targets are a piece of cake to blow right by,” he said.īut all of the other DSP owners, managers and drivers interviewed for this story, including those making profits in the middle or higher end of Amazon’s advertised range, told Protocol they see their success as born from a combination of luck in terms of delivery location and a willingness to skirt Amazon’s rules for the program. “Their targets, you’ve gotta be barely average to hit those targets. For example, Ramos said that Amazon sometimes added DSPs with new, less-qualified owners just to ensure that deliveries were always fast (especially during the peak months of the coronavirus pandemic), even when there was less work available for each LLC. Ramos, who feels sympathy for Amazon’s business practices, believes the company’s decision-making is oriented toward maintaining delivery speeds and pleasing the customer, sometimes regardless of the consequences for specific DSPs. By August 2020, more than 1,300 DSP companies had launched across the U.S., Canada and Europe.įrancisco Ramos, an owner based in Denver, said he believes that Amazon’s system can make owners even more than the money advertised, and that those who fail to hit the range are simply making poor business decisions. And it worked: Less than a year after first advertising for the program in 2018, one-day delivery made its first appearance in a 2019 earnings call, the beginning of a ramp-up in delivery speed that continued until the pandemic began in March 2020. The company wanted to move faster than the two-day Prime standard, and subcontractors made delivery both cheaper and more flexible. The new DSP program was part of Amazon’s efforts to solve its problems with last-mile delivery. It was like a Blue Apron meal kit, but for your own small business. Once accepted into the program, Amazon would teach how to hire drivers, lease vans, pay taxes and get insurance. The company would take applications from individuals - not groups - who were willing to start their own LLCs. In June 2018, Amazon began advertising that almost anyone could become an entrepreneur, so long as they had $10,000 in cash. Of the people interviewed for this story, only one of them spoke favorably of the program. While some of the DSP owners interviewed for this story said they’re desperate to dissolve their companies, they told Protocol that they haven’t closed up shop because they are afraid of the tens of thousands of dollars in fees they might incur when they do.Īside from people who run successful DSPs or have since left the DSP program, everyone who currently owns or works for a DSP was granted anonymity for this story because they are afraid Amazon will retaliate. ![]() After more than a year working for the company, some of these Amazon delivery contractors - including a DSP owner who has filed a lawsuit against Amazon as well as the veteran who launched his business after finishing military service - are or were dependent on federal paycheck protection program loans to maintain cash flow and have grappled with profits below or at the low end of Amazon’s advertised range (below $100,000). Only for the veteran and some other DSP owners interviewed for this story, that isn’t all they got in return. ![]() Accept none of the liability, taxes or responsibility for worker’s comp.Īnd in return, each individual LLC owner gets their own ready-made, money-churning delivery business supplied with Amazon’s seemingly boundless demand. Take the algorithmic calculus that made two-day shipping possible and set strict rules for how quickly and precisely every delivery must be made. Rather than give subcontractors a geographical territory and have them just go at it (a la FedEx), provide them with specific routes. Take the delivery model proven successful by FedEx - subcontracted logistics companies like franchises - and Amazonify it. On its face, Amazon’s DSP program appears to be a smart business proposition for everyone involved. ![]()
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