Amazon takes every new DSP through training a couple of months before launching. Unfortunately, the topics covered represent only about 20% of what you truly need to know. The scope of the material is broad, but there is not much time during your training to go in depth about each topic. For example: you are taught what a route is, but the nuances of SPR, how stem time impacts your profitability, and just why apartments are so difficult is not discussed in detail. Because of this gap in learning, as a DSP owner, you will go through 5 stages of development in your first year of operation where you will learn, begin to understand, and gain the experience you need to succeed.
I can’t wait!
Like any owner, all DSP businesses are eager to launch. They are ready to work with the biggest online retailer in the world and take a slice of the courier pie.
In months one and two, DSPs realize how fast paced and ever-changing operating as a delivery partner for Amazon really is. Experiences vary, but you can be assured that you will be asking “what?” quite often in this stage You will also soon realize that you are not in fact sure how the scorecard works, how to troubleshoot a problem with a route or station, or who to contact for help – and that’s okay! New DSPs need to go through a period of learning the ropes of their own operation and working with stations – which can be different sizes and not operate the same. Don’t feel like you need to know everything all at once.
I got this – or do I?
After the first 2 months, a DSP gets a second wind and understands processes. Within 5 months, the owner will start to also grasp their financial situation – and suddenly figure out that they have too many resources lost due to poor performing delivery drivers.
Overtime, van damage, and inefficiency – all of which Amazon does not incorporate on your scorecard – kills profit. Unfortunately, the DSP’s drivers have now had 5 months to learn bad behaviors that cause these issues. Now, management will need to take the time to correct the behaviors that are costing the DSP money.
Around month 9, the DSP owner focuses on increasing revenue. That means earning the top score on the scorecard. Earning top scores has always been a goal, but until now it has not been THE goal. It is at this point the DSP begins to realize that a Fantastic Plus score is a moving target, and it can be difficult to get to Fantastic Plus. It is towards the end of your first year that you will start to tweak your operation to increase your score, and therefore your revenue.
The new Delivery Service Partner business is typically settled in by their 1-year anniversary. The second year is all about streamlining processes, increasing profitability, and continuing to successfully navigate the constantly changing environment that comes with working with Amazon. This will include adopting new software platforms, outsourcing, and learning the latest best practices. At this point, if you have put in the time to develop your team and your operation, you might start thinking about stepping away from your business and letting your management team take over. You will have put in a full year of long hours, many questions, growth, and more to get to this point. It’s time to start reaping the benefits of being a business owner.