Amazon has a cruel irony baked into Seller Fulfilled Prime (SFP). You can follow every rule, hit every ship-by deadline, and still lose your Prime badge. Why? Because SFP doesn’t ultimately measure you, it measures whether your carrier delivered on time. And if they don’t, you pay the price.

Amazon fulfillment includes both Fulfillment by Amazon (FBA) and Seller Fulfilled Prime (SFP), with SFP serving as an alternative to using Amazon’s fulfillment centers for order processing and shipping.

To understand how Seller Fulfilled Prime works, it’s important to know that Amazon sellers can choose between FBA and SFP, and third-party Amazon sellers play a key role in both programs. In SFP, sellers ship Prime orders directly from their own warehouse, provided they meet Amazon’s strict criteria for fast and reliable delivery.

Unlike Fulfillment by Amazon (FBA), where Amazon handles the entire fulfillment process, FBA sellers send inventory to Amazon’s fulfillment centers, where Amazon manages storage, picking, packing, and shipping. In SFP, the seller manages the fulfillment process themselves. This means that your performance metrics are directly tied to how well you and your chosen carrier execute each step.

Introduction to Amazon Seller Fulfilled Prime

Amazon Seller Fulfilled Prime (SFP) empowers third-party sellers to offer Prime shipping benefits directly from their own warehouses, without relying on Amazon’s fulfillment centers. By joining the seller fulfilled prime program, sellers can display the coveted Prime badge on their listings, signaling fast and free shipping to millions of Prime customers. This not only boosts visibility but also helps sellers gain access to Amazon’s loyal customer base and expand their sales channels.

To qualify for Amazon Seller Fulfilled Prime, sellers must meet strict criteria that reflect Prime customers’ expectations, such as rapid shipping, high order accuracy, and exceptional customer satisfaction. SFP sellers are responsible for managing their own fulfillment process, including inventory management and shipping, to ensure every Prime order meets Amazon’s high standards. Sellers who successfully complete the SFP trial period and maintain Prime status can enjoy increased sales, improved customer trust, and a stronger presence in the competitive Amazon marketplace. For many online businesses, Seller Fulfilled Prime offers a unique opportunity to control their fulfillment process while reaping the benefits of the Prime program.

Enrollment and Eligibility

Enrolling in the Seller Fulfilled Prime program requires careful preparation and a commitment to meeting Amazon’s demanding standards. To get started, sellers must have a professional selling account and a default shipping address within the United States. Once these prerequisites are met, sellers can configure their shipping settings in Seller Central to enable Prime shipping and ensure their offers reflect Prime customers’ expectations for speed and reliability.

During the SFP Trial Period, sellers must demonstrate their ability to consistently meet Amazon’s minimum performance requirements, including on-time delivery, valid tracking, and fast shipping speeds. Maintaining a high level of customer service and meeting Prime requirements is essential for keeping Prime status and avoiding removal from the program. Sellers should regularly review their shipping settings and monitor performance metrics to ensure they continue to meet the standards of the Seller Fulfilled Prime Program. By understanding and preparing for these requirements, sellers can position themselves for success and provide an outstanding experience to Prime customers.

What Changed in Amazon SFP

Amazon recently tightened the screws on SFP with updated rules:

• 93.5% weekly On-Time Delivery Rate (OTD) across all SFP orders
• 100 minimum shipments per month to even qualify
• Strict one- and two-day delivery promises across 48 states
• Minimum Product Detail Page Views by product size tier
• ≤ 0.5% Pre-fulfillment Cancellation Rate tracking Seller-cancelled orders

These rules represent the minimum performance requirements that sellers must meet and maintain to qualify for and retain the Prime badge. Maintaining prime status once eligibility is achieved is essential to ensuring you keep the Prime badge and all the associated benefits for your Prime listings.

If you fall short, even by a sliver, your Prime badge disappears until you claw back up. If you do not meet the requirements, the Prime badge displayed on your Prime listings and Prime items will be removed, significantly impacting your product visibility and sales. It’s no longer about doing “most” things right. It’s about perfection. But here’s the twist: perfection isn’t even in your hands.

The Carrier OTD Problem

Carriers control the final leg of delivery, and Amazon grades you on their performance. SFP sellers must ensure fast shipping speed and nationwide delivery coverage to meet Amazon’s requirements, which adds significant logistical complexity. You can hand off a package on time, scan it into the network, and still get burned if the carrier misses its truck cutoff, misroutes at a sortation center, or has a weather delay.

For sellers, this feels rigged. You’re being measured on someone else’s reliability. And unlike FBA, where Amazon absorbs the risk, (and doesn’t ding itself for late deliveries), SFP makes your business hostage to the carrier’s OTD. Many sellers use Amazon Buy Shipping services to purchase shipping labels, manage shipments, and track deliveries through Amazon’s approved carrier network, but you are still responsible for the final delivery metrics.

Imagine running 1,000 SFP shipments in a month. You hit 100% On-time Shipment. But UPS or FedEx delivers 60 late. That’s a 93.9% OTD, barely scraping the requirement. If they miss 70? You’re at 93.0%. Badge gone. Sales crater.

Why Sellers Can’t Just “Pick a Better Carrier”

Some might say: use better carriers. But Amazon’s OTD system doesn’t care about nuance. Even the best carriers have bad weeks. Peak season surges, labor strikes, and regional weather, these events sink OTD performance fast.

Carriers are incentivized to protect their own high-volume clients, not your handful of SFP parcels. And regional carriers often can’t cover Amazon’s two-day footprint. To participate in SFP, you must assign your SKUs to a prime shipping template within Seller Central, which enables your products for Prime shipping. That leaves you with UPS, FedEx, or USPS, and each has blind spots Amazon Shipping is rolling out as a 4th option in many regions, but it has its own limitations.

A flexible prime strategy is essential to adapt to carrier performance and ongoing delivery challenges.

The Imbalance of Risk in SFP

Amazon frames SFP as freedom: control your inventory, keep FBA fees at bay, win the Buy Box. SFP also allows sellers to manage their own storage space, potentially reducing overhead costs compared to FBA. But the risk transfer is brutal. You carry the cost of fast shipping and the accountability for late deliveries you didn’t cause. These fast shipping costs can significantly impact your profit margins, making it vital to carefully calculate all expenses to ensure your business remains profitable.

This is why SFP feels unsustainable for many sellers. You’re punished for variables beyond your control, while Amazon shields itself from customer disappointment by pointing to you.

Merchant Fulfilled Network: The Backbone of SFP

The Merchant Fulfilled Network (MFN) serves as the foundation of the Seller Fulfilled Prime program, allowing sellers to fulfill Prime orders directly from their own warehouse while maintaining control over the entire fulfillment process. Through MFN, sellers can leverage Amazon’s shipping services, such as Amazon Buy Shipping, to purchase shipping labels, track shipments, and ensure fast and free shipping for Prime customers. Sellers who want to fulfill orders from channels other than Amazon can consider Amazon Multi-Channel Fulfillment (MCF), which allows the use of Amazon logistics across diverse ecommerce platforms.

Participating in the merchant fulfilled network requires robust inventory management, reliable fulfillment capacity, and a commitment to meeting Amazon’s strict performance standards. Sellers must carefully manage shipping costs, maintain inventory visibility, and ensure their fulfillment process can handle the demands of Prime orders. By optimizing their fulfillment operations and leveraging the flexibility of MFN, sellers can expand their online business, fulfill orders efficiently, and maintain a competitive edge in the Prime program. However, success in SFP depends on the ability to balance fulfillment costs, meet customer expectations, and consistently deliver a Prime-worthy experience.

Strategies to Survive Carrier OTD Dependence

So how do you navigate this trap? There are a few imperfect strategies. First, evaluate different fulfillment options, such as SFP, FBA, and third-party logistics providers, to determine which best optimizes your delivery performance and meets Amazon’s requirements. Having a clear prime strategy is essential for optimizing your participation in Seller Fulfilled Prime, as it allows for continuous adjustments to meet Amazon’s evolving standards.

• Spread Volume Across Carriers: Don’t let a single carrier’s bad week wipe out your badge. Split shipments where it makes sense.
• Build Weekly Monitoring, Not Monthly: Amazon now enforces OTD weekly. Track performance in real-time, not at the end of the month.
• Negotiate Carrier SLAs (Good Luck): Some enterprise-level sellers can hold carriers to OTD service guarantees. But for most, leverage is thin.
• Use Third-Party Tools and Networks: Automated routing, peer-to-peer fulfillment, or SFP-optimized 3PLs can spread risk across regions and carriers. Selecting a reliable fulfillment partner is crucial to consistently meet Amazon’s strict delivery standards and maintain Prime eligibility.
• Maintain FBA as a Safety Valve: For high-stakes SKUs, keep backup inventory in FBA. Effective inventory management is essential when balancing stock between FBA and SFP to ensure Prime eligibility and avoid stockouts. Planning for seasonal demand is also critical to ensure product availability during peak periods and to optimize storage and shipping costs. Losing Prime visibility can crush sales overnight.

Participating in Seller Fulfilled Prime allows you to create seller fulfilled prime offers, giving you the advantage of maintaining the Prime Badge and offering fast, free shipping while managing your own fulfillment. As an SFP seller, you are responsible for meeting strict performance requirements, but you also gain greater control over your fulfillment process and can benefit from increased competitiveness in the marketplace.

Bigger Picture: Why This Matters Beyond Amazon

This isn’t just about SFP. It’s a warning shot for ecommerce operators everywhere. As marketplaces push more accountability onto sellers, the margin for error shrinks. These challenges are highly relevant for anyone running an online business, especially third-party Amazon sellers, as fulfillment and logistics are critical to supporting growth and customer satisfaction.

The lesson: logistics performance is becoming a brand asset. Customers don’t see UPS or FedEx on the box. They see you. And if their package is late, they’ll blame you, not the carrier, not Amazon. Effectively managing customer service inquiries is also essential to maintain customer satisfaction and control over the sales process.

In other words: the weakest link in your supply chain isn’t optional. It’s existential. The competitive landscape for ecommerce is becoming more challenging as marketplaces continue to raise performance expectations.

Final Thoughts: The OTD Sword Hanging Over Sellers

Amazon has built SFP into an almost impossible standard. Sellers who want the Prime badge must first complete a Prime trial period, a 30-day window where they must meet strict Prime performance and shipping requirements to qualify for SFP. Even after qualifying, maintaining prime status is an ongoing challenge, as sellers must consistently adhere to Amazon’s high standards and performance metrics to retain the Prime badge. That’s not partnership, it’s risk transfer disguised as opportunity.

So the real question for sellers isn’t: can you hit the SFP metrics? It’s: can your carrier? And if not, what’s your Plan B when Amazon yanks your badge?

Frequently Asked Questions

What is the On-Time Delivery Rate (OTD) for SFP?

Amazon requires a 93.5% weekly OTD for all SFP shipments. Sellers must also maintain a low cancellation rate, specifically less than 0.5%, as high cancellation rates can jeopardize their Prime badge. This means carriers must successfully deliver nearly every package on time for sellers to keep their Prime badge.

How does Amazon calculate OTD for SFP?

Amazon tracks the promised delivery date vs. the carrier’s actual delivery scan. Even if you ship on time, the score reflects the carrier’s performance, not yours.

Can weather or carrier errors still hurt my SFP metrics?

Yes. Amazon doesn’t adjust for weather delays, misrouted packages, or carrier staffing shortages. Sellers are penalized for factors outside their control. Though more recently, Amazon announced that it, in its sole discretion, would exempt late deliveries due to weather conditions where they can verify that weather impacted carrier networks in a region. No Support Ticket necessary. But we’ve yet to see this in practice.

What happens if I miss the SFP OTD requirement?

If your OTD falls below the threshold, Amazon suspends your Prime badge. This usually results in an immediate drop in Buy Box wins and sales volume. Sellers must start over in the SFP Trial if they wish to re-attempt eligibility.

How can sellers protect themselves from OTD failures?

Options include diversifying carriers, tracking OTD performance weekly, using 3PLs with multi-carrier capacity, and keeping FBA inventory as a fallback for critical products.

Sellers should regularly monitor their performance metrics and manage SFP settings within Seller Central. Amazon Seller Central provides the most up-to-date information on SFP requirements and performance. To ensure you meet Prime delivery promises, configure shipping settings in Seller Central according to Amazon’s guidelines. Regularly reviewing and updating your shipping settings is essential to maintain Prime eligibility and optimize delivery performance.

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

I didn’t expect to wake up one day and think, “Wow, Amazon’s DSP is about to rewrite the ad playbook.” But here we are. As part of the broader Amazon Advertising ecosystem, Amazon’s Demand-Side Platform (DSP) is pulling ahead in a big way. Amazon’s Demand-Side Platform offers advanced, data-driven capabilities for targeted advertising, accessible to all advertisers. Amazon DSP stands out in the digital advertising landscape for its integration with Amazon’s data and its unique ability to reach audiences both on and off Amazon platforms.

Snapshot For Busy Brands

Amazon DSP ads aren’t just another channel; they’re a full-stack programmatic hub that lets you buy ad inventory across multiple platforms, including Amazon-owned properties and beyond. Think Prime Video, Fire TV, Amazon owned sites, Amazon owned websites, third party websites, audio, mobile apps, even CTV via Roku, as well as Amazon devices, all with Amazon’s data-rich targeting under the hood.

Amazon DSP offers a variety of ad formats and ad types, such as display, video, and audio ads, to reach customers at different stages of the journey. The platform provides access to premium ad placements and valuable ad space within a digital marketplace, maximizing your campaign’s reach and effectiveness. And ad spend on this thing is exploding.

Why Amazon’s DSP Is Surging

Let’s talk numbers: Amazon’s Q2 2025 advertising revenue hit $15.7 billion, a 22 percent year-over-year jump, far outpacing its core retail growth. Ad campaigns run through Amazon DSP have significantly contributed to this increase in ad revenue. Executives specifically credited DSP improvements and a new Roku-connected TV deal as major catalysts, noting measurable gains in campaign performance through enhanced targeting and reporting.

Early signs already show advertisers are doubling down. Prime Video ad buys made via DSP rose from 26 percent in Q3 2024 to 36 percent in Q4, and by late 2024, Amazon DSP accounted for 32 percent of all Amazon ad spend. Setting an appropriate marketing budget is crucial for Amazon DSP campaigns, as a minimum spend is often required to fully leverage its capabilities. For advertisers, new to brand sales have become a key metric when evaluating the impact of Prime Video ad buys through Amazon DSP.

Let me put it bluntly: Amazon is turning DSP into its playbook, for video, audio, programmatic display, streaming TV ads, you name it. Amazon DSP campaigns are now central to this shift. It’s cheaper on fees. It leans on unmatched first-party data. And it’s becoming the default for advertisers who want those data-driven, performance-rich hooks.

How Amazon DSP Works, And Where Your Ads Can Show Up

At its core, Amazon DSP is a tool for buying ad inventory through programmatic real-time bidding (RTB), same as other DSPs. This is a form of programmatic advertising that leverages ad exchanges and ad servers to automate and optimize the process of buying and selling digital ads. But it’s the panoramic advantage that matters:

• You can target based on Amazon’s shopper behaviors, purchase history, browsing intent, and even the detailed aisles they’ve wandered through. Amazon DSP enables advertisers to reach target audiences, relevant audiences, and existing audiences using advanced ad tech for precise segmentation and campaign optimization.
• Your ads appear across Amazon’s ecosystem, Prime Video, product detail pages, Fire TV, mobile browsers, and now across the open web via Amazon Publisher Services and other ad exchanges. This includes Amazon DSP inventory and a variety of ad products such as online video ads, audio ads, and sponsored display ads. Ad placements can be purchased through private marketplace deals and real-time bidding, allowing you to purchase ads and purchase ad inventory efficiently.
• The recent Roku integration means you can now reach over 80 million U.S. households using connected TVs via Roku and Fire TV, falling into Amazon’s DSP matrix. Available inventory also includes video content, audio ads, Amazon Music, IMDb TV, and STV ads, expanding your reach across streaming and audio platforms.

You can measure ad effectiveness using metrics like detail page view rate (DPVR), which shows how well your ads drive users to a product detail page or your own website via web browsers. Sponsored display, sponsored display ads, sponsored brands, and sponsored ads are also available within Amazon’s ecosystem, providing additional options for campaign strategy.

Bonus: Amazon’s Multi-Touch Attribution, just deployed, blends A/B tests with machine learning so you can see exactly which ad touchpoint nudged a shopper. That’s next-level measurement. Amazon Marketing Cloud and Amazon’s store provide advanced analytics, reporting, and shopping data to further inform your campaign decisions.

Whether your goal is to sell products or convert shoppers, Amazon DSP leverages purchase intent to help you reach the right ads at the right time. You can choose between managed service, where Amazon or a partner manages your campaigns, or self service, which allows you to control and optimize campaigns independently.

Good News, Bad News, For Competitors

This isn’t happening in a vacuum. The Trade Desk (a big independent DSP) just took a historic 38 – 40 percent stock dip. Analysts were scared, this isn’t just earnings jitters, this is Amazon eating into CTV ad budgets, margins, and mindshare. Compared to other demand side platforms in the digital advertising space, The Trade Desk stands out for its independence and broad inventory access, but Amazon DSP’s unique integration and data advantages are shifting the landscape.

MoffettNathanson lowered TTD’s stock rating, explicitly citing Amazon DSP’s rise and the way it locks brands into its system, “the Amazon shadow… front and center.”

But, to be fair, Trade Desk hasn’t folded. Advertisers still lean on TTD for cross-channel reach, outside Amazon’s walled gardens. DSP budgets are often additive, not always siphoned off. And deep reporting and independence still matter, even as these shifts reshape the broader digital advertising ecosystem.

What This Means For Ecommerce And Retail Media Teams

Here’s where I make it practical:

Amazon DSP can transform your overall advertising strategy by enabling advanced targeting, measurement, and optimization across a wide range of ad products and inventory sources.

1. If you’re already advertising on Amazon, add DSP now. It’s where off-search, high-intent Amazon audiences live, and you can leverage a variety of ad products to reach and convert shoppers.

2. Want to run streaming TV ads? Amazon DSP with Roku gets you into lean-back moments, impressions that weren’t accessible a year ago. Choose the right ad types, ad formats, and ad placements to optimize your ad campaigns and reach your audience at every stage of the customer journey.

3. Lean on first-party data. DSP is built to use Amazon’s shopper behavior to laser-target people before they search for your next product. Use this data to deliver the right ads to the right audience, target purchase intent, and ultimately sell products more effectively.

4. Measure smarter. Use the new Multi-Touch Attribution to see what actually influenced the conversion, not just clicks. Track campaign performance closely to optimize results and enhance your advertising strategy.

5. Still value open-web reach? Bucket part of your budget away from DSP to independent DSPs like Trade Desk, but be smart about the split and performance layering.

Why This Matters

Amazon’s stacking ad inventory across its own sites, streaming platforms, and broad third-party placements is redefining where marketers spend digital ad dollars. Amazon is consolidating ad space and ad placements across its digital marketplace, streamlining how advertisers access and manage inventory. This shift is also impacting ad revenue for brands and agencies, as the new buying environment changes how returns are measured and optimized. For ecommerce brands, that means controlled shopping-inspired ad journeys. Agencies? It’s a giant shift in media buying workflows, with ad tech integration and a growing variety of ad products now available to support campaign management and targeting.

Whether DSP ends up dominating or just co-dominating, one thing’s clear: if you don’t fit into Amazon’s programmatic picture, you’re invisible to a growing share of the market.

Final Thoughts

I’ve been watching Amazon’s DSP evolve for years, but this moment feels different. With recent gains in inventory access, better measurement tools, and sky-high ad growth, it’s no longer a fringe play; it’s core infrastructure for streaming TV ads, video, audio, and beyond.

Marketers who tap into DSP now, leveraging Amazon’s reach and data, while still balancing open-web strategies, are the ones reshaping how commerce and advertising converge in 2025.

Frequently Asked Questions

How does Amazon DSP differ from traditional Amazon ads?

Amazon DSP buys ad inventory via programmatic RTB (Real-Time Bidding) across Amazon’s ecosystem, and beyond, using audience data tied to real shopper behaviors.

Can I run streaming TV ads through Amazon DSP?

Yes. With partnerships like Roku and Fire TV, DSP now includes CTV placements across major streaming platforms.

What makes Amazon DSP competitive versus other DSPs?

Its access to first-party shopper data, exclusive inventory, competitive pricing, and enhanced attribution (like Multi-Touch Attribution) give it a performance edge.

Is The Trade Desk sinking because of Amazon DSP?

Trade Desk took a significant hit, analysts flagged Amazon DSP as a key threat. But many advertisers still value Trade Desk’s open-web reach and neutrality.

How should I allocate ad budget between Amazon DSP and independent DSPs?

Lean into DSP for Amazon-owned and streaming inventory, while reserving part of your budget for independent DSPs to maintain open-web presence and measurement balance.

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

The Appeal of Running Your Own Amazon Delivery Business

I remember when I first heard about the Amazon DSP program (Delivery Service Partner program). The idea was instantly intriguing: start your own delivery business, deliver Amazon packages, and get Amazon’s backing in terms of volume and support. For aspiring entrepreneurs, especially those eyeing the logistics industry, it sounded almost too good to be true. You get to tap into Amazon’s vast shipping demand and logistics tools, but still effectively run your own business. No need to build a customer base from scratch; Amazon is your customer, feeding you packages to deliver. Over 4,400 small businesses have already signed up as DSPs since the program launched in 2018, creating 390,000 driving jobs and generating $58 billion in revenue collectively. Those numbers are huge, and they show Amazon’s delivery network isn’t just UPS trucks and USPS mailmen; it’s thousands of independent owners like us driving the blue Prime vans around town.

Amazon continues to disrupt every sector it touches, and last-mile delivery is no exception. By recruiting small business owners to operate delivery fleets, Amazon has quickly built a logistics operation that rivals UPS and FedEx in parcel volume. (In fact, as of 2024, Amazon was delivering roughly 28% of all US parcels, surpassing FedEx and UPS by volume!) They’ve essentially crowdsourced their own private UPS, and as a result, people like you and me have an opportunity to own a delivery business without needing to court customers or create demand. Amazon provides a giant built-in market.

But let’s cut to the chase: What does it actually take to become an Amazon DSP and run a package delivery business? What are the costs, the requirements, the day-to-day realities? Is it true you can start with as little as $10,000 and make a good profit, as Amazon’s marketing suggests? I’ve done the research and even spoken to a few DSP owners. Here’s what I’ve learned about launching and growing a delivery company under the Amazon DSP umbrella.

Getting Started: Costs, Requirements, and Application Process

One of the biggest draws of Amazon’s Delivery Service Partner program is the relatively low startup costs compared to, say, buying a franchise or starting a logistics company from scratch. Amazon advertises that you can start with as little as $10,000 in initial investment. That number is real, but it’s important to understand what it covers. Essentially, Amazon has negotiated deals on things like van leases, insurance, fuel, and uniforms. By taking advantage of those discounts, your upfront outlay to get, for example, 5 vans on the road can be around $10K. (In contrast, starting an independent delivery biz with 5 vehicles could easily cost several times that once you factor in buying/financing vehicles, etc.)

However, you also need to show you have enough liquid assets to sustain the business as it ramps up. Amazon requires proof of around $30,000 in liquid assets available. This is essentially a financial cushion; you might not spend all that, but Amazon wants to ensure you can pay your drivers and other expenses while cash flow builds. It’s a bit like proving you have some savings to handle the first few months of operation. They’ll do a financial assessment as part of the application.

Speaking of the application, Amazon’s process is quite involved (as it should be, since they’re trusting you with their reputation and packages). Here are the key steps and requirements:

• Background and Experience: You’ll need to submit a thorough application, including your work history, education, and any military service. Leadership experience is a big plus; Amazon is looking for people who can coach and motivate a team, handle scheduling, and problem-solve on the fly. Interestingly, logistics experience specifically is not required. Many DSP owners come from totally unrelated fields (banking, hospitality, etc.). But you do need a track record of leading teams or running projects; they want to see that you can manage 40 – 100 employees as your delivery team grows.
  
• Clean Background and Good Credit: There will be background checks and likely credit checks. Since you’ll be hiring drivers who handle packages, any red flags (e.g., serious criminal history) can disqualify you. Financial responsibility is also key because you’ll be handling payroll and expenses.
  
• Initial Screening and Interview: After the online application and assessments, promising candidates are invited to an interview. They want to gauge your understanding of the program and commitment. If selected, you don’t immediately get a delivery territory; you get placed into their pool to match with a delivery station location in need of new DSPs. You can express location preferences, but you may have to be flexible or wait for an opening.
  
• Training: Once accepted, Amazon provides two weeks of hands-on training. This includes a week at Amazon HQ or a regional facility learning the business side, and another week shadowing an existing DSP at a delivery station to learn the ropes. They cover everything from using their route optimization software to managing drivers. Amazon really emphasizes safety and process adherence in this training.
  
• Business Setup: You’ll establish your company (if you haven’t already), get any necessary licenses, and set up things like a commercial driver hiring pipeline, etc. Amazon assists in some of these areas. For example, they have recruiting tools to help you hire drivers and can even refer candidates. They want you to hit the ground running.
  

It’s worth noting Amazon also had (as of a couple of years ago) a Diversity Grant initiative: a $1 million fund that offered $10,000 for Black, Latinx, and Native American entrepreneurs towards startup costs. This was their effort to reduce barriers for underrepresented business owners. There was a bit of legal controversy around it (some non-minority applicants challenged it), but Amazon was pushing it as part of diversifying the DSP network. If you qualify, it’s something to look into; essentially, it could cover that initial $10K investment for you.

What Amazon Provides: Support and Tools for DSP Owners

Signing on as a DSP, you’re not buying a traditional franchise, but Amazon does act sort of like a franchisor in terms of setting standards and providing a playbook. Here’s what Amazon brings to the table for Delivery Service Partners:

• A Steady Volume of Packages: This is arguably the biggest perk. Amazon is your client, and they have more packages than they know what to do with. They’ll assign you routes each day for deliveries in your area. You don’t have to go find customers or drum up business; Amazon is essentially guaranteeing demand. If anything, the challenge is hiring enough drivers to handle all the demand, especially during Peak season (holidays).
  
• Logistics Technology: Amazon equips DSPs with its delivery management tech. This includes the route optimization software (the drivers use an app that maps out their route in the most efficient way, and it’s dynamically updated), scanning devices, GPS trackers in vans, etc. They also give DSP owners access to a central portal that shows all their routes, packages, performance metrics (delivery times, success rates, etc.), basically your business dashboard. It’s a turnkey tech platform many small businesses could never afford to develop on their own. Amazon’s logistics tools are best-in-class, and you get them by default as part of the program.
  
• Deals on Vehicles and Equipment: Instead of you having to buy vans outright, Amazon has negotiated vehicle lease programs. You lease Amazon-branded vans (the blue Prime vans) at favorable rates. Maintenance is included in many cases. They’ve also arranged bulk pricing on things like the handheld devices drivers use, uniforms, insurance, fuel, and even things like route planning software subscriptions if needed. These special rates on start-up equipment, devices, and insurance help reduce ongoing costs.
  
• Training and Ongoing Support: As mentioned, initial training is provided. But it doesn’t stop there. They have account managers or business coaches who will check in on your performance and help you succeed. There’s also a built-in support line, sort of like DSP support, for when issues arise (for example, if a van breaks down or you have routing problems, you have an on-demand support hotline). Amazon provides standardized processes for everything, which is helpful when you’re new. They even give you a DSP Toolkit with guides on HR, recruiting, scheduling, and “best practices” from their highest-performing DSPs.
  
• Payments and Incentives: Amazon pays DSPs per route/stop, etc., based on a contract rate. They also have performance-based incentives. For instance, if you hit certain delivery success metrics or safety milestones, you can earn bonuses or higher payouts. Amazon recently invested an additional $2.1 billion in rate increases and program enhancements to help DSPs with higher wages and vehicle costs. They know that if DSPs aren’t profitable, the whole program fails, so they adjust pay periodically (like a fuel subsidy when gas prices spike, or higher per-package rates in competitive labor markets).
  

In short, Amazon sets you up with the infrastructure: you have the vans, packages, software, and a playbook. Your job is essentially to hire and manage a team of reliable delivery drivers (called Delivery Associates or DAs) and execute the deliveries efficiently while meeting Amazon’s performance standards.

The Reality Check: Day-to-Day Operations and Challenges

Running an Amazon DSP business is not an absentee-owner situation. Amazon expects hands-on owners who are deeply involved in day-to-day operations, especially at the start. Many successful DSP owners I’ve spoken with basically lived and breathed the operation in the early months: sorting packages at 6 am, dispatching vans, riding along on routes to learn the ropes, etc. Here’s a taste of the day-to-day and the challenges that come with it:

• Early Mornings and Route Planning: A typical day might start before dawn at the delivery station. Amazon staff will have sorted packages for your routes, but you (and maybe a hired dispatcher) will oversee loading. Each morning, you ensure each driver has their truck loaded with the right bags of packages, their device is working, and they understand their route. This can be a hectic phase; if someone calls in sick last minute, you might jump in to deliver or reassign routes on the fly.
  
• Managing Drivers: Expect to hire 40 – 100 delivery associates as you grow (a lot of routes run 7 days a week, so you have multiple shifts). Hiring and retention can be some of the toughest parts. The delivery driver role is physically demanding, with lots of walking, carrying boxes, driving all day, and turnover can be high. Some DSP owners report annual turnover rates north of 100% among drivers, meaning you might be constantly recruiting. One anecdote: a DSP owner mentioned they went through 150 – 200 drivers in a year due to turnover. Keeping drivers motivated and maintaining a good culture is crucial. Amazon monitors things like how fast and safely drivers are delivering, so you need to train and emphasize safety (no running to doors, even if you’re behind schedule, etc.).
  
• Performance Metrics (aka The Scorecard): Amazon tracks your business metrics closely; this is often referred to as your DSP scorecard. Key metrics include your delivery success rate (packages delivered on time without issues), driver safety incidents, complaints, and things like route completion rates. For example, they have targets for on-time delivery rate and valid tracking rate (you must scan every package) that you must meet. Also, keeping a low missed delivery rate and low customer complaints (those “this package was handled poorly” feedback) is important. If your metrics slip, Amazon can issue warnings, require action plans, or, in extreme cases, terminate your DSP contract. So, there’s pressure to perform consistently. It’s not just about finishing the day’s routes; it’s about doing so at a high service level.
  
• Long Hours and Problem Solving: As an owner, you’ll find yourself tackling unexpected problems. A van gets a flat tire. Who goes to help? (Often, you will, or you have a contingency van ready.) A driver can’t deliver a package because of a gated apartment complex. How can you train them for next time? Inclement weather, holiday volume spikes, and tech glitches with the routing app, a DSP owner has to be a chief firefighter of all such issues. During the Peak holiday season, expect to practically live at the station. It’s not uncommon to work 10-12-hour days during busy periods. Many owners do get to a point where they can delegate day-to-day to a station manager they hire, but initially, expect to hustle.
  
• Narrow Margins: Amazon sets the delivery rates, and while they aim to make it profitable, your margins per package can be slim after you pay driver wages, fuel, vehicle leases, insurance, etc. Efficient routing and keeping overtime low are key to making money. Some DSP owners mention that profit can be around $75K – $300K annually once scaled up, but results vary widely. If you’re in an area with higher labor costs or if you run into a lot of vehicle damage, it cuts into profit. Conversely, if you operate super efficiently (low turnover, minimal accidents, high stop count per route), you can do well. But this isn’t a get-rich-quick gig; it’s a medium-sized business with real expenses. (I always tell folks: don’t quit your day job expecting to clear six figures in Year 1; build up your operation first.)
  
• Autonomy vs. Rules: It’s “your” business, but Amazon sets many rules. You have to follow Amazon’s protocols for delivery (from how drivers buckle packages in their vans to how they ring a customer’s doorbell). They also dictate branding, your vans carry Amazon Prime logos, and drivers wear Amazon uniforms. You can implement your own culture and perks for employees, but the overarching guidelines are Amazon’s. Some entrepreneurs chafe at this because you are somewhat limited in making independent decisions (for instance, you can’t decide to deliver for other companies on the side; your contract typically ties you to Amazon packages only). Think of it as being an independent contractor in a very structured system.
  

All that said, many DSP owners find the work rewarding. A common sentiment: “It’s incredibly challenging, but I love being able to grow something and provide jobs.” For example, a DSP owner named Carlecia (featured on Amazon’s blog) started in 2022 and now employs 120 people across two stations. She talks about the pride of providing livelihoods and giving back to her community through the program. So, there’s a real opportunity to have a positive impact locally while riding on Amazon’s logistics might.

Tips for Success as a DSP Owner

If you’re serious about taking on an Amazon delivery business opportunity, here are some strategies and insights gleaned from those who have done it:

1. Hire Smart, Train Hard: Your drivers are your business. Prioritize hiring people who are reliable and customer-friendly. Use Amazon’s recruiting support, but also get creative, tap local job fairs, refer-a-friend bonuses for your current drivers, etc. Once hired, train them thoroughly on the routes, the scanner device, and Amazon’s expectations (like on-time delivery standards and safety reminders such as not backing up unnecessarily, wearing seatbelts, dog bite prevention, etc.). Well-trained drivers will be more efficient and make fewer mistakes (which keeps your Amazon scorecard healthy).

2. Create a Positive Team Culture: Delivery work is tough. Little things can keep morale up, providing water and snacks for drivers, recognizing top performers, and celebrating hitting milestones (like 100% delivery day or safety streaks). Some DSPs do morning huddles with a quick motivational talk or shout-outs. If you treat drivers as valued team members rather than package-hauling machines, you’ll reduce turnover. Also, be open to their feedback; the folks on the road often have ideas to improve routing or efficiency.

3. Keep an Eye on Efficiency Metrics: Use Amazon’s provided dashboards to monitor your performance goals daily. Watch your route completion times, package consolidation (are vans leaving with under-loaded capacity?), and any “failed delivery” reasons. By analyzing this data, you can spot trends, for example, if one route or driver consistently runs behind, maybe the route is too large or there’s a traffic issue you can reroute around. Small tweaks can save you overtime costs and improve your stops per hour. Amazon loves efficiency, and higher productivity can sometimes lead to Amazon offering you more routes (more routes = more revenue).

4. Safety First (It Pays Off): Amazon is pretty strict about safety, for good reason. Accidents or injuries are bad for everyone. Enforce the safety training points: drivers should take breaks, avoid rushing, and follow all protocols (like using a delivery cart for heavy packages, dog awareness, etc.). Not only will this avoid the nightmare of someone getting hurt, but Amazon’s incentives often reward safe operations. For instance, keeping a low accident rate and high compliance might qualify you for quarterly bonuses or better route assignments. Some DSPs even incorporate a daily quick safety tip in their morning meet-ups to keep it top of mind.

5. Plan for Peak Season Early: The November-December surge (and to a lesser extent, Prime Day or other big sales) will push your operation to its limits. Plan ahead, start recruiting seasonal drivers by late summer, secure extra vans if possible, and maybe have administrative staff or yourself ready to jump in on delivery routes when volume peaks. It’s common for DSP owners to deliver packages themselves during Peak to handle overflow. If you plan well and communicate expectations to your team (yes, there will be long days, yes, everyone works most days in December), you can get through it and even enjoy the challenge. Amazon often pays extra incentives during Peak due to the intensity, so a well-run Peak can significantly boost your annual profit.

6. Network with Other DSPs: Amazon hosts an online forum and occasional meet-ups for DSP owners. Use these to your advantage. Other DSPs aren’t your direct competitors (they operate in their own territories), and they can be gold mines for advice. They’ll share tips on everything from which route optimization tricks work best to how to handle a driver who consistently calls out. I’ve seen DSP owners help each other by loaning vans in a pinch or covering routes if one had a crisis. Being part of the community also keeps you in the loop if Amazon updates policies or makes changes to the program.

Running an Amazon DSP can definitely become a thriving small business if managed well. Amazon’s VP of delivery operations often says they want DSP owners who are “obsessed with customer experience and their people.” That seems to ring true: focus on reliably getting packages to customers on time (making Amazon look good) and focus on keeping your employees happy. That formula, backed by Amazon’s demand and resources, is a path to success in the program.

Conclusion: Is the Amazon DSP Path Right for You?

The Amazon delivery service partner program is an innovative model: Amazon leverages local entrepreneurs to expand its delivery reach, and those entrepreneurs get a shot at business ownership in a booming sector. It’s not a guaranteed money-printing machine (anyone who thinks they’ll just hire a manager and sit back should think again). It requires hustle, resilience, and adaptability. You’re dealing with humans (drivers, customers) and a tech giant’s systems, both can be unpredictable at times! But if you put in the effort, you can build a solid operation with stable revenue.

To sum it up, the DSP program offers a relatively accessible way to own a delivery business for those who have leadership chops and a willingness to work within Amazon’s framework. You don’t need to be a logistics expert or come with a fleet of trucks; Amazon provides the playbook and the packages. Your job is to execute with excellence. Many small business owners have used this program to become employers in their community, create hundreds of jobs, and yes, make a good living in the process. They’ve shown that with grit and smart management, you can successfully run an Amazon delivery business.

Like any business, there are risks: thin margins, high turnover, and the fact that Amazon can change the rules or pricing (their recent changes to the contract rates and the end of the de minimis shipping exemption show the environment can shift). However, Amazon has a vested interest in DSPs succeeding; they need you to deliver their packages. As Amazon keeps growing its ecommerce dominance, the volume of packages isn’t slowing down; if anything, there’s more demand for delivery routes every year. That bodes well for DSPs who run efficient operations.

In the end, whether the DSP program is right for you comes down to your personal goals and management style. If you enjoy hands-on operations, don’t mind rolling up your sleeves (or driving the occasional van yourself), and get satisfaction from meeting targets and growing a team, it could be a great fit. It’s a chance to ride on Amazon’s growth while still being your own boss day-to-day. Just go in with eyes open, realistic expectations, and a strong work ethic. Starting a delivery business through Amazon isn’t easy money, but for many, it’s proving to be good money and a pretty exciting ride in the process.

Frequently Asked Questions

How do I become an Amazon Delivery Service Partner?

Apply through the Amazon DSP program site, show $30K in liquid assets, pass background checks, complete training, and launch with Amazon-provided routes and vans.

How much does it cost to start a DSP business?

Startup costs begin at around $10K with Amazon-negotiated discounts. You’ll also need $30K in liquid assets to cover wages, fuel, and early operating expenses.

Can I make a profit as a DSP owner?

Yes. Profits for scaled DSPs typically range from $75K to $300K annually, depending on fleet size, route efficiency, and meeting Amazon’s performance metrics.

What’s the difference between Amazon DSP and Flex?

DSP is running a delivery business with employees and Amazon vans. Flex is gig work, where drivers use their own cars for smaller deliveries and work as independent contractors.

What support does Amazon provide DSP owners?

Amazon offers training, coaching, routing software, performance dashboards, discounts on vans and insurance, guaranteed package volume, and 24/7 operational support.

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.