Case file 011 · Amazon delivery contractors
How One Letter From Amazon Can End a Delivery Company
A lawyer built an Amazon delivery company that about 450 drivers worked for. Amazon ended the contract on 30 days' notice.
The numbers
The story in 30 seconds
Amazon lends you its name and its routes; you hire the drivers, lease the vans and carry the insurance. Ahaji Amos signed up in 2019, and she says a buyer later offered more than $1 million for her company.
The contract promises no amount of work, and for several reasons Amazon can end it with one written notice. Any fight goes to a private hearing, not a courtroom.
Amazon gave her company 30 days, citing "multiple breaches"; she says every reason was false. The courts sent her lawsuit to that private hearing, and what happened next isn't public.
Follow the $100
Every $100 of sales at a Texas Amazon delivery company, January to May 2024:
Every cost: ≈ $85
drivers, vans, insurance and everything else
Profit, on paper: ≈ $15
before any owner pay. Then Amazon cut its rates, and it filed for bankruptcy that June.
our arithmetic
What this means for your business
- 1
Know your cut-off before you sign.
Try thisFind the line that says how much warning your one customer must give before the work stops.
- 2
Watch cash, not profit.
Try thisAdd up what you'd still owe the day the work stops: leases, loans, insurance, staff. Compare it with the cash you'd have.
- 3
Don't let one customer be your whole business.
Try thisKnow how much of your sales rides on one customer, before it's all of them.
More plays from the video
- Look for a line that lets them change the deal at any time.
- Look for a line that blocks you selling without their OK.
- Look for a line that says they owe you nothing if they end it.
- Look for the dates you can't leave: Amazon's contract locks owners in from November 1 to January 15.
How you compare
Two franchises from the 40 that face the same squeeze: one that can lean on a few big clients, and one that runs on routes.
Costs $131,000 to $287,700 to open a general staffing office.
Costs $150,155 to $191,575 to open.
Run your numbers
Before one customer becomes your whole business, run these numbers.
If what you'd owe is bigger than your cash, the customer doesn't just own your work. It owns your savings.
Two more checks
That's the cut in what your customer pays that wipes out your profit. The Texas company made about 15¢ on the dollar, so a cut of about 15% would have taken all of it. our arithmetic
Over about 50%, one letter can end the business. rule of thumb
