Local entrepreneurs join Amazon to launch delivery businesses

The team at Delivery Response: On-Time Parcel, or DROT as Amazon calls it, pose for a group photo. As an early Amazon Delivery Service Partner, the company has been one of the busiest. Up to 10,000 parcels are delivered every day. photo contributed.

published on April 20, 2022 – 2:08 p.m
Written by Frank Lopez

An entrepreneur’s special skills can come in handy in ways he never expected.

This has been one of the benefits of the Amazon Delivery Service Partner (DSP) program, which helps entrepreneurs set up their own independent businesses while also merging with the largest retailer this side of China.

The Amazon DSP program was created in 2018 to meet the e-commerce giant’s delivery needs – reduce its reliance on UPS Inc. and the US Postal Service – and to connect with and help entrepreneurs to scale their own logistics business.
Since launch, Amazon DSP has grown to more than 3,000 local operators employing more than 260,000 drivers worldwide.

The starting cost to lease the first five Amazon delivery trucks is just $10,000, with more established companies operating 20 to 40 delivery trucks. Amazon offers training to recruit, hire and coach a team of 40 to 100 employees. It also offers services such as uniforms, car insurance, payroll, tax and accounting software rebates, and legal support.

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

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

Each DSP is given a unique code name by Amazon. Due to a typo, their DSP company was called DROT instead of DROP as intended.

Watt has spent much of his career in hospitality and finance, rising in mortgage finance.

Just before she started her DSP, Watt helped companies move forward. She wanted to see those benefits for herself.

She learned about the DSP program from a friend. Watt perfectly described the qualifications Amazon was looking for.

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

“We were one of the guinea pigs,” Watt said. “It was an intensive process – providing your biography, your financial data. It was like putting together an SBA loan package,” Watt said.

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

She also attended several weeks of training in Seattle and a week in San Diego. Watt started her DSP program about a week after she finished training.

Watt started with five tracks and 10 employees.

Although the company has partnered with Amazon, Watt said they are still an independent company.

“We walk like Amazon, speak like Amazon and look like Amazon, but we’re DROT,” Watt said.

Currently, DROT employs 143 people and covers 55 routes primarily in the Fresno and Clovis area and a few nearby counties including Madera and Tulare.

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

During the first few weeks in DROT’s business, Watt received word from Amazon that their DSP was the best in North America.

From then on it was a constant effort to do the best possible job.

“We have to kick ourselves to make sure we always maintain that high level of integrity in what we do, making sure everyone gets home safe and every customer we might be able to reach with a smile gets his face,” Watt said.

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

Immediately before starting DSP with his son, Hannah enjoyed her retirement from Bausch + Lomb for three years after 18 years with the company in various positions. He also spent 17 years in various positions at Miller Brewing Co. and four years straight out of college at JC Penney.

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

They applied to the program in July 2018 and were approved in November 2018. The company was officially founded in 2019.

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

In early 2020, seven more DSPs were added to the Fresno Amazon last-mile station to ease the load. Vested Logistics currently operates up to 45 routes in the high season.

Hannah said his experience managing teams contributes to the success of running a DSP.

“Amazon emphasized the need for employees who have experience leading teams,” Hannah said. “Throughout my career I have led teams of people. As my positions at these companies evolved, it meant more responsibility and managing large groups, and that’s my strength,” said Hannah.

The company currently employs 95 people with an average of 150 to 180 stops per day. The average number of parcels delivered per day is between 6,000 and 6,500.

Starting off, Hannah said that finding dedicated and qualified employees is always a challenge, especially during the pandemic.

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

The DSP program allows entrepreneurs to start with lower financial hurdles while still allowing business owners to run their own businesses, Hannah said.

“I would encourage anyone who wants to become an independent businessman to start a DSP. It’s a great opportunity to start a business with family or friends and it will teach you a lot not only about the business but also about the logistics,” said Hannah. “But the competition is big”

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 on the DSP program, visit logistics.amazon.com/marketing

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