How much attention do you pay to those ever-present gray vans emblazoned with the Amazon logo? Did you ever stop to think who owns them? And who repairs them?
The prevalence of smartphones and quick internet connections has completely and permanently changed the consumer landscape.
Among these changes, Amazon has risen to become a firmly established and dominant player in nearly every industry.
The e-commerce conglomerate and their promise of two-day deliveries has captured the attention and wallets of an estimated 147 million Prime members throughout the US.
With so many customers to satisfy, Amazon has had to confront unparalleled logistical challenges.
The pandemic-fueled online shopping sprees of American consumers following nationwide mandatory stay-at-home orders showed just how reliant we have become on modern day technological solutions to our problems.
The perpetually increasing demand for delivered products has led Amazon to reduce their dependence of traditional carriers like USPS, UPS, and FedEx.
In fact, researchers approximate that in 2020, Amazon delivered 2.5 billion more of its own packages. This represents an increase of over 100% from 2.3 billion packages delivered through Amazon in 2019.
Their approach to generating this delivery supply primarily relies on small businesses and independent contractors to do the work with assistance provided by the advanced software and capabilities of Amazon Logistics (AMZL).
“Delivery Service Partners,” or DSPs for short, usually operate a few dozen commercial vans and are paid per route completed.
The owners are classic small business entrepreneurs, meeting the needs of their clients by staying focused on speed, efficiency, and customer service.
The commercial vans of choice for DSPs are usually from the make of Amazon partners, e.g., the Mercedes-Benz Sprinter, Ford Transit, and Dodge Promaster. DSPs are permitted to use their own fleet of commercial vans as long as they meet Amazon’s key criteria.
Otherwise, most DSPs resort to renting vans from Amazon’s third-party lease partners.
How Collision Repairers Play a Role
The rising prevalence of privately owned DSPs has direct implications to trends in the collision repair industry.
It’s a simple equation: increased use of commercial vans equals increased collision repair and maintenance.
This trend is not only implied, but something we have observed from our clients across the US.
For some of them, Amazon DSP repairs represent one of the fastest growing segments of their business.
To adopt a similar market strategy and capitalize on this growing small fleet segment, shop owners should first identify whether their shop is reasonably near an Amazon distribution center.
If a collision repair shop owner operates in a highly populated Metropolitan Statistical Area (MSA), especially one that is growing rapidly, chances are that there is an Amazon distribution center nearby.
Even if a shop owner does not operate in a top MSA, they can still take advantage of this market opportunity by identifying smaller delivery stations that are used for last-mile deliveries.
Currently, Amazon is in the…