A lot goes into being an Amazon Delivery Service Partner or (DSP), especially around the holidays. Here at Interactive Accountants, we want to share some tips for your operations. Our objective is to share some information regarding changes in route volumes, keep up with your metrics, and help you save money.
To start with, the universal tips and services that we are here to share are to help you save money. The key is to know where you want to cut costs, depending on where you are at with your business. For example, a DSP will focus on lowering insurance costs because vehicles and drivers are involved. Continuing with the model, some ways to reduce such costs include putting your drivers through a vetting process and considering what an insurance company will place as a risk level for the vehicle and its drivers. One of the more obvious ways to lower insurance rates is not using the insurance unless you absolutely must. This is not to say don't use insurance, instead focus on accident prevention over the solution while still being prepared for whatever the future holds. While it may already be compensated, it is essential to know your mileage. Your employee hours to route mileage ratio is a crucial factor to look at. Delivery services and Amazon DSPs alike have key performance indicators (KPI's) that they can use to track their progress as a business. In the delivery world, these are called metrics.
Metrics help you measure the success of your business. Our staff is trained in helping your business track its progress and what that means for you. Some key metrics to think about include deliveries, staff, time, and accomplishments. Other big picture topics to consider are your workforce, how you prepare, and route volumes.
There are many areas to being an Amazon DSP, but one place that can help is investing in your staff. This can be done through training and hiring requirements. Taking the time to prioritize your team is a great way to save time in the long run. By investing in your staff, you are potentially making them better employees, reducing mistakes, and giving them the ability to solve issues that would otherwise require more time to fix. The human component is both the best and potentially the most error-prone variable regardless of the business. The best way to solve that dilemma is to ensure that your staff is as prepared as possible for whatever may come up.
Along with making sure your staff is prepared, it is vital to consider their background. Do they have experience being a driver for delivery service? What would be their insurance rate for driving? These questions are essential because they can reduce the risk of your employees having an issue. Accidents happen on the road, and an excellent way to drive up your budget is to try and get your insurance rate as low as possible and one option is to make sure your fleet has low rates because they have low-risk drivers. For example, young men traditionally have some of the highest drivers insurance rates because they are considered high risk. The goal here is to apply those same principles of finding the best person for the job while making sure that the company benefits. Here at Interactive Accountants, we specialize in helping you manage the books and payroll.
As the saying goes, "Hope for the best, plan for the worst." -Lee Child is a great way to run your business without neglecting responsibilities, while also not stressing yourself out too much. While nobody can predict the future, that doesn't mean you and your business can't plan for it. As spoken about before, one great strategy is to minimize risk. Another is to have good insurance if something like an accident occurs. As an Amazon DSP, you will have vehicles on the road, and it's an unfortunate reality that accidents can happen to you. So make sure you have a reasonable insurance rate that covers potential damages that you need to worry about. For example, if you're one of our DSP clients in Miami, that is a city with a lot of traffic and rain; Thus making collisions and water damage practical things to insure your drivers for. Caring for tires and using ones that are best in the rain may help reduce accidents in a climate like this. If you are one of our DSP’s up north where snow hits, be sure that drivers have good winter tires or all season tires during the colder months.
Being prepared doesn't only focus on the negative either. It is also essential to plan for growth in your operations. From an increase in routes or profits, it's good to be ready to act when things are going well. When things are good and busy, it's wise to take those times to be extra organized and focus on the things that don't necessarily need to be changed, but check in and stay on top of the books.
One thing in the world of an Amazon DSP that will constantly be changing is your route volume. One week you could have 19 routes, another you could have over 30, depending on the rate of orders that week saw. Especially given that we are in the holiday season, there are many packages in transit right now. Some final metrics to measure involve deliveries, from how many you make, the number of deliveries made on time, distances driven, and your vehicle's capacity. Given the nature of being a DSP means that routes will always be in flux, but this doesn't have to be a stressful variable in your business because there are ways to benefit from these changes and knowing when to make them. As you grow with your DSP business, you will know the times of the year that routes jump up and down. Use this experience to prep for hiring and layoffs, as well as doing what you can to retain your top drivers all year long.
Here at Interactive Accountants, helping businesses grow and succeed financially is our number one goal. We are here to help! If you're still not convinced yet to give us a call, feel free to look at our other blogs regarding the help we offer various businesses and offices.
If you are a professional in any field that these tips apply to, schedule a free consultation here with our owner Matthew Shiebler, CPA. He's been practicing accounting for over 25 years now and is a business owner, just like you!