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I got this DM last week asking if Amazon routes are a good investment. It's one of those businesses that most people don't even know exists. You could actually own those blue vans that make daily deliveries to your house. Now, on paper it sounds incredible. You have the Amazon brand behind you, you get recurring cash flow, you have no marketing or sales. But in reality, it's a lot more complicated than that. So today I'm going to break down exactly how the DSP program works, show you what some real numbers look like here and whether this is a gold mine or if you're buying yourself a job. So let's get into it. Well, what is Amazon dsp? It stands for Delivery Service Partner. And basically you own the trucks that make the last mile delivery to people's houses. Now, They've copied the FedEx model, but with a very important twist that you must understand. More on that later. But first, let's get into some numbers here. So I pulled all of these from Biz Buy Sell. If you go on, you can just go to bizmycell.com Amazon dsproutes for sale with some hyphens. Just Google this and there are a few. You'll see it like this, Amazon, Last delivery, Last delivery, et cetera. And so I went ahead and pulled up all those numbers and that's what we're going to dive in right now. So we got one in Central Florida, North Carolina, Arizona and South Florida. These are the four that I found here. They average $786,000 at the asking price. On average, they did almost $5 million of revenue with almost $500,000 of cash flow. You know, on the low side there are 379. On the highest one, almost 700. An interesting thing to note here is the number of routes. We're going to talk about this later. This is something that's very important. 28 to 32, 25 to 45, 28 and 35 to 42. If on average 5 manager 40 trucks producing roughly $123,000 of revenue per truck and cash flow of anywhere from $10,000 to $14,000 per year per truck, giving it a net margin of almost 10%, as you can see, very consistent across the board. And then the multiple. So when you value businesses, a lot of times it's what's called an earnings multiple. So basically you take your asking price and you divide it by the cash flow. Now in this, most businesses that are small businesses trade for two and a half, three and a half, four maybe Times revenue. So meaning that a business that is doing $500,000 of cash flow to the owner should be worth about 1.5 million to 2 million something in that range to buy it for. But with these Amazon delivery businesses, you can buy these super cheap. They're only asking one and a half times. You spend $786,000 and you're making $500,000 a year. That means in less than two years you made all your money back and more. Sounds like a great deal, right? Like why, why are these available? Why can you get these so cheap? That is what we're going to figure out. And so to dive in, let's first talk about all the good stuff, like why someone would want to get into this business. Number one, you do zero marketing, right? All of your business is people clicking on Amazon me every day and buying shit that has to get delivered to your house. And so all of that gets delivered by these vans. So you have zero marketing, you have zero sales, you have zero sales people. And ultimately what you have is a bunch of delivery drivers and a manager who's constantly hiring and training and ensuring everyone's following the protocol. All this built in demand, all of it, you, it is at your fingertips. Pretty predictable volume. You know, Amazon has pretty steady. Obviously there's the busy season around the holidays coming up in November, December, you're going to get slammed and then there's a slower period after that and you just manage it. Extremely low entry costs. Now, I went on the ones that are for sale, but if you go on and looking at their website, which I'll show you a little bit later, for $10,000 you could get started with one of these delivery businesses. And Amazon subsidizes all the leases, all the onboarding. So basically for $10,000 you could get started with servicing the route. Already they own the vans. They have leasing partners that help get them to you. You know, you pay for all that stuff, but it's kind of through your deliveries, not out of pocket. Now obviously you have to make payroll and you have to do all stuff, but you're not going to payroll unless you don't have to deliver drivers. So anyway, they make it super easy for new people to get onboarded started low cash investment, and then have the ability to grow these businesses. I mean, in theory, all of these businesses were started with basically $10,000 and then they've turned them into machines that print, you know, 10,000, $8,000 a week. Pretty impressive. And that's what the amazing opportunity is. And you can Grow by servicing more routes, building your team, all that now that's all the good stuff. It's not fun, right? What sucks about this business model, first of all, you have no pricing power, right? Amazon sets the routes, they set what they're going to pay. You can't raise your prices. You have zero control over that. Now, you know, earlier I said the flip side was like marketing and sales, like you don't have to do any of that. But on the other hand, that means you were totally powerless to whatever they decide to change, right? Whatever Amazon decides they need to do, they're just going to do it. If their earnings aren't as good and they say, hey, we need to squeeze a couple more points out of our delivery service, we're going to do that. If they think, well, man, these guys are making a lot of money at 9.9, how about we only make them at 9% margin, right? Another 0.9 on, you know, the average franchisees, only $44,000 a year. But for us, you know, multiplied by, you know, thousands and thousands of these people, that's millions and millions of dollars of profit for them. And so you're at the total discretion of, of Amazon and whatever they decide to do, you're at the mercy of it vent and margins, right? That 10% margins is not a huge buffer, especially because there's not really an upside. Like they've intentionally capped it so that you make 10%. All right, Cap, not minimum, but cap. And so as the owner of the routes, you're responsible for all of the maintenance on the vehicle. So I own 35 automotive repair shops. We service a lot of these Amazon videos. And I'll tell you, they're good money makers for us because these things come in here, they put so many miles on the vehicles, they're always need tires and brakes and suspension parts. And I mean, you've probably seen them driving around like a lot of times. They're really beat up because they're just like on the road, like from 4am to whatever it is, 10pm at night, all of that cost is on you as the owner. And if you don't run a really tight operation for maintaining them and getting these things into my stores, that small repair can compound into something much bigger and bigger. And if you have poor management fields totally going to kill you. You also have this very tight scheduling on routes. Okay, so this is really what I want to talk about is that in this model you don't own the routes, right. In FedEx, which I have another video I talk about FedEx, you actually buy the routes. It's like you were going to service like this neighborhood, in this neighborhood and you have a map and you own it. But with a FedEx DSP, you don't own anything. You don't own the trucks. Remember Amazon owns those. They're like renting them to you. At least in them you don't own the routes. They assign you the routes based on your performance and the demand. So if they say, hey, this area is booming, for whatever reason, we are going to stick more people on it to be able to maintain our service quality. And if this area isn't doing as well, we're going to pull people back. Or if you aren't meeting our delivery standards because you're having trouble staffing, you have late delivery, you have safety problems, you have vans that are down because you didn't spend the money on maintenance and all of that, they're going to pull routes from you and take those into sign them to somebody else. Which is why if we go back up here and we look at these listings, they'll say 28 to 32, 25 to 45, 35 to 40. Almost every single listing except for this one have a varying number of routes that they service. And like this one, honestly like 25 to 45 and they're only asking 350, this is the cheapest one. They also had the greatest variability in routes, probably because they are the most inconsistent. And so Amazon probably takes and gives takes and gives, which some of that might be on the operator, some of that could just be the market. Right. Once again, you have no control over this. When you want to grow, how do you grow? Well, you do a good job and you get assigned more routes. I'm sure there's a ranking system. I'm sure if there are ways that you can go into a market that is underserved and you can hire drivers and like service the market, they would love that. Right. And so a lot of it comes down to your ability to operate and just deal with delivery drivers. And the headaches become kind of the staffing problems of anybody with a driver's license and some hustle can drive for Amazon. Right. And so the guys who are one week delivering packages, another week are working at a warehouse, the next week they're power washing. You know, in theory they're going to be chasing the dollars. And so you have to be able to constantly be crude and constantly training and all that just is like it's this heavy, heavy operational based business. And so Ultimately, you as the owner are going to get tied into this thing because think about this like you built this big business, but then now if you don't meet your standards that Amazon has set for you, they're just going to like take it away, right? They're just not going to sign you the routes and then ultimately like you're just at their mercy. And so financing, another big one, none of these are SBA eligible. Most conventional loans will not do it either because you own nothing, right? You don't own the trucks and you don't own the routes. Nothing. So like you can't get financing on these things. Most owners bootstrap it just by reinvesting the profits that they're making. They raise private funds, maybe they get a home equity line of credit and use that. They get like other ways they raise money, maybe they have another business and they get money from that and they put into this. But financing is going to be a really big challenge for anybody who's serious about growth. And at the end there's exit valuations. You know, at least with FedEx you have an asset that you can sell. But with Amazon, you literally don't own anything. Which is answers the question of why can you buy these things for so cheap? I mean, look at this one. You can buy it for less than one times earning. It's claiming it makes 430,000 a year and you can buy it for 350. You make your money back in like 10 months. So why? It's because you own nothing and it's really hard to get financing on these. And so they sell them cheap. And so is this a bad business? Not necessarily. Right. I think for the right type of person, this is an amazing opportunity. So if I was a new business owner or if I didn't have, you know, a ton of money to invest, like I said, you can get started as low as $10,000. You know, they say 10 to 30,000. But if you are like really good at operations and you were like, I am good with people, I'm good with operations. And like I am just looking for something low cost that I can get my foot in the door and provides me like this stepping stone so I can learn what it takes. I think this is an amazing opportunity. And if that's you, you go to logistics.Amazon.com and you can search available areas. You know, they're really looking for people. Well, they tell you Texas, Oregon, Ohio, there's a web like you can put in your state and see what it is in Pennsylvania you know, I live in Philly, but like Pittsburgh, there's some openings for routes and so you get started there and just like, if it works, you could just build it up, right? And you just service more and service more. If you've got some money, maybe you can look at doing one of these bigger opportunities, if that makes sense. But if you're not a first time owner or you're looking for something that you can really earn freedom of, I would not buy this business. You know, I would instead look at franchising. Now I've been in franchising my entire life. I own a portfolio of over 40 franchises. We'll do 50 million in revenue. But I started with two locations in 2016 and I just used the money that I made to buy more and buy more and just get better and better and better. And you have proven systems, you have a major brand, you have community. It's really easy to get bank financing if you're buying, you know, a profitable business. And there's lots of different ways you can grow. And then once you get good at one franchise, like operating, you can go into other franchises. You could trade up, you could trade down. There's like so many different ways that you can grow in franchising. So I think this is a really good opportunity for people getting started. But if you're really serious about making money, explore franchising. I put a free link to a book called the Eight Figure Playbook that I wrote. Basically walks you through all the types of franchises and how to think about growing them. And if you want to learn more about building businesses, subscribe below. And I would love to hear what you think about Amazon business in the comments below. I respond to almost everyone and I'll see you in the next video. Cheers.