Last-Mile Delivery Round
Run an Amazon DSP or Evri delivery contract with 3–5 vans
Run an Amazon DSP or Evri delivery contract with 3–5 vans.
On a day-to-day basis, you will manage a fleet of 3–5 vans dedicated to last-mile delivery. This includes hiring and overseeing drivers, maintaining the vehicles, and coordinating routes effectively. You'll use delivery management software to optimise efficiency and ensure timely deliveries while managing customer communication and handling any issues that arise.
The demand for last-mile delivery services has surged due to the growth of e-commerce, particularly post-pandemic. With consumers increasingly expecting fast and reliable delivery, starting a last-mile delivery round is timely. Partnering with established companies like Amazon or Evri can provide a steady stream of contracts and customers.
Ideal founders should possess strong organisational skills and experience in logistics or fleet management. Expect to put in significant hours initially, from recruiting drivers to managing daily operations. A hands-on approach will be necessary to navigate the complexities of running a delivery business successfully.
Within 12-24 months, you could scale your operation to multiple contracts or additional vans. As you build a reputation for reliability, you can negotiate better rates with partners and expand your service area, potentially increasing your net profit margin significantly.
- Driving
- Logistics
£8–£15 net per stop scale
Gross margin is estimated to be around 20-30% depending on operational efficiency.
UK consumers are increasingly reliant on online shopping, with a reported 36% growth in e-commerce since 2020. As major retailers outsource their delivery needs, the demand for local delivery services is at an all-time high.
Your primary customers will be local businesses and larger retailers needing efficient delivery solutions for their online orders. They seek reliable partners who can ensure timely deliveries and customer satisfaction.
The UK last-mile delivery market is projected to reach £5.8 billion by 2025, driven by e-commerce growth. With over 70% of UK consumers preferring home delivery options, this presents a robust opportunity for new delivery services.
Revenue & pricing
You will earn between £8-£15 net per stop delivered, which can accumulate quickly depending on the volume of deliveries. Scaling operations can lead to increased profitability through optimised routes and higher contract rates.
- £10,000 for initial van purchases (3 vans at £3,000 each)
- £2,500 for insurance coverage per annum per van
- £1,200 for a delivery management software subscription (annual)
- £1,500 for initial hiring and training of drivers
Costs
- Vans (3-5)10000
- Insurance (annual)2500
- Delivery management software1200
- Hiring & training costs1500
- Initial fuel and maintenance1300
- Driver salaries6000
- Fuel expenses800
- Vehicle maintenance300
- Software subscription100
First steps
- 1Apply to DSP
- 2Buy vans
- 3Hire drivers + dispatcher
Your first 90 days
- Register your business and set up a business bank account with Tide.
- Apply for an Amazon DSP or Evri delivery contract.
- Purchase 3-5 vans from a local dealer.
- Hire 3-5 drivers to start operations.
- Set up delivery management software, such as GoFleet.
- Start receiving delivery contracts and begin operations.
- Monitor performance and gain customer feedback.
- Adjust routes and schedules based on performance data.
- Engage in marketing efforts to attract more business.
- Evaluate financial performance and adjust hiring or operations as necessary.
How to get customers
Local advertising
Distribute flyers in local businesses and community centres.
Social media marketing
Use Facebook and Instagram to promote services.
Partnerships with local retailers
Network with local shops to secure delivery contracts.
Online directories
List services on platforms like Yell.com and Google My Business.
Tools you'll actually use
| Tool | Cost | Why |
|---|---|---|
| Tide | Free for basic account | Simple banking for small businesses. |
| Xero | From £10/month | Efficient bookkeeping and invoicing. |
| GoFleet | Starting at £50/month | Manage deliveries and track performance. |
| Calendly | Free for basic use | Schedule meetings with drivers and clients. |
| Stripe | Transaction fees vary | Easy payment processing for deliveries. |
Common mistakes to avoid
- Underestimating the cost of vehicle maintenance and fuel.
- Neglecting to build relationships with local retailers.
- Failing to optimise delivery routes effectively.
- Overlooking the importance of driver training and safety.
- Not keeping accurate financial records from the start.
How to scale this
- 1Start with 3 vans and gradually increase to 10 as demand grows.
- 2Expand service hours to cover evenings and weekends.
- 3Hire more drivers and support staff as contracts increase.
- 4Consider branching into additional services such as freight or warehousing.
Risks & mitigations
High competition in last-mile delivery
Differentiate with exceptional customer service.
Vehicle breakdowns affecting service
Invest in maintenance and have backup vans.
Driver shortages
Offer competitive pay and benefits to attract talent.
Changes in regulations
Stay informed on transport laws and compliance requirements.
UK legal & compliance
- Register with HMRC for tax purposes and ensure proper bookkeeping.
- Obtain necessary insurance for vehicles and liability coverage.
- Ensure compliance with local licensing regulations for transport services.
- Implement GDPR-compliant practices for handling customer data.
FAQ
What qualifications do drivers need?
Drivers must have a valid UK driving licence and be insured.
How do I find delivery contracts?
Apply directly to companies like Amazon DSP or Evri for partnerships.
What happens if a delivery is late?
Communicate proactively with customers and provide updates.
Can I operate this business part-time?
It’s challenging; full-time commitment is recommended for success.
What are the tax implications?
You will need to pay corporation tax on profits and adhere to VAT if applicable.
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