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Free guide

Package Delivery Routes Business

Run a small delivery company that contracts with Amazon (as a Delivery Service Partner) or FedEx Ground (as an Independent Service Provider): a fleet and people-management business with thin margins, where one customer sets your pay and can end the contract.

Figures last verified October 31, 2026

$10,000 – $1,350,000*

Startup cost

Coming soon

Time to first revenue

High

Difficulty

Moderate

Physical demand

No

Can run solo

Holiday peak, Nov–Dec

Seasonality

* Startup cost excludes budget lines we haven't sourced yet.

Risk Meter

Eight factors from this guide's own data, each scored 1 (lowest risk) to 5 (highest). Every score shows why.

Overall risk

Elevated

3.8 out of 5

Average of 6 of 8 factors, weighted equally. 1 is the lowest risk and 5 the highest. It measures risk, not how much you'll earn, and it isn't a prediction. How we score risk.

  • Money at risk

    5 / 5

    At least $1,350,000

    Top of the startup budget: $500,000 or more.

  • Time to earn it back

    Not scored

    No data

    This guide has no sourced revenue forecast.

  • Franchise closure rate

    Not scored

    No data

    There are no franchises in this business to measure.

  • Loan default rate

    4 / 5

    9.6% vs 7.2% for all industries

    73 of 760 SBA 7(a) loans to Couriers and Express Delivery Services (NAICS 492110), approved FY2010–2019, were charged off. Our count from the SBA's loan-level data; 58 loans were still open, so the final rate may be slightly higher.

  • Demand trend

    3 / 5

    About the same

    Couriers and express delivery services (NAICS 492110) employer establishments +6.0% (10,245 to 10,859) vs +5.1% for all industries, 2019–2023.

  • Licensing and rules

    3 / 5

    Moderate

    Needs state and federal registrations: a California Motor Carrier Permit and a USDOT number (see Licensing).

  • Customer concentration

    5 / 5

    One customer or platform that can end the relationship

    All revenue comes from one contract with the delivery company, which can end it.

  • Physical demand

    3 / 5

    Moderate

    From the guide's at-a-glance rating; see the risks section for details.

Franchise vs. Independent

Same type of business. Two very different paths.

Data coming soon

The franchise comparison isn't published yet. We only show numbers we can source.

Startup Budget

One-time costs to launch, from cited sources. Totals are added up from the lines below.

Package Delivery Routes startup budget, lean start
ItemLowMidHigh
Amazon DSP startup costs (Amazon's own estimate, first 5 vans)$10,000$10,000$10,000
Total$10,000$10,000$10,000

Share of mid estimate

  • Amazon DSP startup costs (Amazon's own estimate, first 5 vans)100%

Budget spreadsheet

Every line with its sources, included in the complete kit.

AlternativeAmazon DSP: proof of liquid assets required to apply: $30,000 – $30,000

Not a cost. Amazon requires documents showing this much in liquid assets to cover startup costs and your personal expenses until Amazon's first payment. Shown separately so it isn't added to the $10,000 estimate. Not included in the total above.

AlternativeCalifornia Motor Carrier Permit, first year (for-hire, 5–10 vehicles): $727 – $727

California only. The fee depends on your fleet size; this is the 5–10 power-unit, for-hire row. Not included in the total above.

AlternativeUSDOT number (if required): Data coming soon

Required for interstate carriers with vehicles of 10,001 lb or more, and by many states (California included) for intrastate carriers. See Licensing. Not included in the total above.

24-Month Forecast

An example to plan with. Every assumption is yours to change.

Data coming soon

The forecast isn't published yet. We only show numbers we can source.

Pricing

What customers typically pay, from large-sample cost data.

Data coming soon

Pricing data isn't published yet. We only show numbers we can source.

Key Risks and How to Manage Them

  • One customer controls your business

    All of your revenue comes from Amazon or FedEx. They set the rates, the volume and the performance metrics, and both describe payment as based on their contract terms rather than on prices you set.

    How to manage it: Read the full contract before you commit, build a cash reserve of several months of payroll, and keep your personal finances separate so a lost contract does not take your savings with it.

  • The contract can end at the customer's choice

    Amazon has ended DSP contracts in batches; CNBC reported in 2020 that more than 1,200 drivers at at least seven DSPs were laid off after Amazon ended relationships. A 2021 Amazon DSP agreement filed with the SEC says Amazon owes no severance if it ends or does not renew the agreement. FedEx ISP agreements also run for set terms.

    How to manage it: Assume the contract may not be renewed. Do not sign personal guarantees on vans or leases that outlast the contract term, and keep debt low.

  • Vehicle accidents and liability

    Your drivers spend all day on the road in your vans. Crashes, injuries and property damage are your company's liability, and claims drive up insurance costs for the whole fleet.

    How to manage it: Carry the required commercial auto and workers' comp coverage, check driving records before hiring, train drivers on safety, and track each driver's record.

  • Driver turnover and constant hiring

    Delivery work is hard and pay is set within thin margins, so drivers leave often. Amazon says it looks for owners who can hire, motivate and manage teams. Every missing driver is a route you still have to cover.

    How to manage it: Budget time and money for recruiting every month, keep backup drivers trained, and expect to cover routes yourself in a pinch.

  • Labor law and joint-employer disputes

    You are the employer: wages, overtime, meal and rest breaks, payroll taxes and workers' comp are your responsibility. In California, AB 5 presumes a worker is an employee unless the ABC test is met, so drivers cannot simply be paid as 1099 contractors. The NLRB has also pursued a case treating Amazon as a joint employer of one California DSP's drivers (31-CA-320596, still open), which shows how unsettled these relationships are.

    How to manage it: Use a payroll service from day one, get an employment lawyer to review your pay practices, and follow California's meal and rest break rules exactly.

  • Thin margins and high fixed costs

    Labor is most of your cost; one FedEx ISP for sale reports payroll at about 69% of revenue. Vans, insurance, fuel and repairs come out of what is left.

    How to manage it: Build your own profit-and-loss model before applying (Amazon says this is your responsibility) and review costs weekly.

  • Long days, and you may drive at first

    Both Amazon and FedEx expect owners to manage, not drive. But when drivers call out, many owners cover routes themselves early on, and a delivery route means a full day of driving, lifting and carrying packages. Amazon calls it a seasonal business, and the holiday peak is the hardest stretch.

    How to manage it: Be honest about your stamina before starting, hire a dispatcher or operations manager early, and keep enough trained backup drivers that you rarely have to drive.

Licensing by State

Requirements vary by state and local jurisdiction.

More states are coming.

A general guide only. Rules change and vary by city and county — confirm with your local government before you start.

The Playbook

A step-by-step guide from setup to growth.

  1. Phase 1

    Setup

    • Decide between Amazon DSP and buying a FedEx Ground route business
    • Build your own cost and cash-flow model
    • Gather proof of funds and check your credit report
    • Form the right legal entity (a corporation for FedEx)
    • Line up insurance, payroll and permits
  2. Phase 2

    Application and approval

    Included in the complete kit

  3. Phase 3

    Fleet

    Included in the complete kit

  4. Phase 4

    Hiring drivers

    Included in the complete kit

  5. Phase 5

    Daily operations

    Included in the complete kit

  6. Phase 6

    Safety and compliance

    Included in the complete kit

  7. Phase 7

    Peak season

    Included in the complete kit

  8. Phase 8

    Growth or exit

    Included in the complete kit

Suppliers and Tools

Vendors independent operators use.

No supplier pays to be listed. If we ever earn a referral fee from a link, it will say “Affiliate link” right next to it.

Where to apply or find routes

The two companies' own pages for prospective contractors.

Delivery vans

Cargo vans for FedEx routes or for DSPs not using Amazon's lease program.

Payroll services

You will run payroll for a team of drivers from the start.

The Kit Is Coming

Everything on this page is free. The downloadable kit (playbook, spreadsheets, templates) is in the works.

We never sell your email. Privacy policy.

Frequently Asked Questions

Is this a franchise?

No. Neither Amazon's DSP program nor FedEx Ground's contractor program is a franchise, and FedEx says so directly. You own a delivery company that contracts with them. There is no franchise disclosure document, which also means you don't get the legal disclosures a franchise must give you. The Open Franchise is not a franchise either.

Do I have to drive the routes myself?

Neither company requires it: Amazon looks for hands-on managers, and FedEx says owners need not be licensed to drive. But many owners do drive routes early on, when drivers quit or call out.

How much money do I need?

Amazon estimates startup costs as low as $10,000 if you use its negotiated deals, and requires proof of $30,000 in liquid assets. FedEx routes are usually bought from an existing contractor; two businesses we found for sale were asking $1.15 million and $1.35 million. Both paths need cash for payroll before payments arrive.

Are Amazon's profit figures guaranteed?

No. Amazon's $100,000–$400,000 annual profit range is its own marketing, based on figures some DSPs volunteered, and Amazon says it does not guarantee results. Build your own numbers.

Can Amazon or FedEx end my contract?

Yes. Contracts run for set terms and may not be renewed, and Amazon has ended contracts with groups of DSPs. Plan as if the contract could end, and avoid long debts you can't pay without it.

Figures last verified October 31, 2026. Every number links to its source. See all sources for this page.

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