If you think courier businesses are thriving now more than ever, you’re right.
Over the last few years and since the COVID-19 pandemic, the number of online shoppers has increased.
This resulted in more demand for trustworthy courier services.
Knowing how to start a courier business can help you at the beginning.
However, you need to work hard to maintain your business’s success.
In this article, you’ll know what you need to start a new courier business and the revenue to expect from it.
- How Profitable Is Owning a Courier Business?
- What You Will Need To Start a Courier Business [& Associated Costs]
- Why You Should Consider Starting a Courier Business as a Side Hustle
- How To Start a Courier Business in Six Simple Steps
- Things To Consider When Building a Courier Business
- INSPIRATION: Courier Business Ideas
- Frequently Asked Questions
- Similar Businesses To Consider Starting
- Wrapping Up
How Profitable Is Owning a Courier Business?
Determining the exact numbers for profit margins isn’t easy.
It depends on many factors, including the distance, type of cargo, number of employees, and size of trucks.
Local courier services delivering packages within short distances usually charge an average of $22.5.
If you start taking solo delivery jobs, your profit margin should be about 90%, taking fuel costs into consideration.
This means delivering five to ten packages per day for five days per week brings in $29,250 to $58,500 in revenue per year.
In turn, it translates to an annual profit of around $26,000 to $52,000.
With your courier company becoming popular, you’ll need to rent a facility and hire more couriers.
Although this makes your margin drop to only 40%, your profit becomes greater.
That’s because your company can make ten times more deliveries per day with more employees, bringing your total profit to $117,000–$234,000.
What You Will Need To Start a Courier Business [& Associated Costs]
You can start a courier business for as little as $2,000, considering you already have a car or any type of delivery vehicle.
You’ll only be paying for the paperwork and advertising.
If you plan to purchase a vehicle, this number can increase significantly.
It depends on how big you choose to start your business, whether you’re buying a (used or new) car, truck, box van, etc.
Here’s what you’ll need:
- Setting Up Your Business Entity: Choosing your business legal structure and registering its name costs an average of $175.
- Getting Business Licenses and Permits: Aside from the mandatory business license, you need to issue some other permits depending on the type of courier service you choose to run. Licenses cost between $200–$300.
- Getting Insurance: Insurance is highly important, especially for businesses involving vehicles. It protects your business from liability when it comes to accidents, damages, or injury. To get business insurance, you need to pay around $200.
- Purchasing Vehicles: Depending on the type and size of the vehicle, you can pay as much as $100,000 for a box truck. However, if you plan on sticking to local deliveries, a small $30,000 cargo van would be much more suitable.
- Marketing and Advertising: You need to build a website and create social media accounts for people to know you. Printing business cards and handing out brochures is also a huge plus. This costs an average of $2,500.
Do I Need a License or Certificates To Start a Courier Business?
Yes, you do. Aside from the business license every company needs, there are other licenses to consider.
Drivers, for example, need to have a valid driver’s license with a clean record.
Other types of licenses depend on the type of courier business you decide to have.
If your employees are driving huge cargo trucks between states, they need to have a commercial driver’s license CDL from the department of transport DOT.
If you run a medical courier service, your driver must be a licensed healthcare professional.
Transporting food, alcohol, or firearms needs special licenses too.
That’s why knowing your state regulations is essential.
Why You Should Consider Starting a Courier Business as a Side Hustle
Every business has some pros and cons, and a courier business isn’t an exception.
To weigh your odds of succeeding, you should know why launching a courier business is an idea worth considering.
- Low Startup Cost: You can always work with what you have, even if this means delivering packages using a bike. As you collect money, you get to expand your small business.
- Flexible Hours: It’s not a nine-to-five office job. You can work whenever you can, whether on-demand or as an independent contractor delivering for amazon and other retailers.
- No Special Skills Required: It’s a simple point A to point B job. It doesn’t require having a special skill or talent to make money.
- High Demand: Whatever you’re carrying, the demand for the delivery industry isn’t subsiding anytime soon.
How To Start a Courier Business in Six Simple Steps
Over 300,000 courier companies are operating in the U.S. That’s why you need to focus on each step of building your courier business.
Not only does this help you remain organized, but it also enables you to become a strong competitor.
Step #1: Make a Business Plan
Creating a business plan is the most vital part of your business.
It contains all you need to stay on track, such as your business goals, objectives, expenses, expected profit, and pricing.
To make a successful business plan, research the market and study your competition well enough.
This helps you build a better business and outperform other companies in your field.
Step #2: Register Your Business
The next step is starting to realize your business by choosing its structure, picking its name, opening a business bank account, and registering it with the IRS.
After that, you should work on issuing all the needed licenses and permits.
As they vary depending on the industry and type of cargo, it’s best to consult someone with experience and ask about your state’s regulations.
Step #3: Get Insurance
Insurance is vital for the success of businesses as it protects your company from unexpected events leading to catastrophic results.
Make sure to pick the right insurance type with suitable coverage for your business.
Step #4: Purchase Vehicles
This isn’t a mandatory step if you already have a vehicle.
For those who need to purchase a van, research your options thoroughly according to the cargo you’re delivering.
It also helps to install a GPS device for your customers to track their packages.
Step #5: Work on Marketing
Without proper marketing, your business won’t reach enough people.
Start by creating a business card and brochures to help you make deals with local retailers.
Utilize social media and initiate marketing campaigns for potential customers to know about your business.
As your business grows larger, you may need to create a mobile app and purchase courier software to help you out.
Step #6: Grow Your Team
After testing the waters working by yourself, and as your business gets more popular, you’ll need to increase its size.
Growing your team and hiring staff is inevitable.
However, make sure to choose the right people.
Things To Consider When Building a Courier Business
It’s time to know what obstacles may stand in your way of starting a courier service business.
It’s better to be prepared and expect any issue to know how to handle it.
Here’s what you should consider when building a courier business.
Can You Run a Courier Business by Yourself?
It’s essential to know that running any business by yourself can be challenging.
Think about all the involved aspects and figure out how long you’re willing to work alone.
After all, you’ll eventually need to grow your business and hire more staff for the extra help.
Do You Have Enough Money for It?
Although you can start a courier business with little money, you need to comprehend all the associated costs and how you’ll spend that money.
It helps to compare what you need to begin this business to how much startup capital you have.
Do You Have the Right Vehicle?
Determining the scale of your business and the type of cargo you’re willing to deliver is a vital step.
If you don’t want to purchase a new van, you must consider the capacity of your current vehicle.
INSPIRATION: Courier Business Ideas
The delivery service business isn’t only about transporting packages.
Specialization can improve your delivery business’s unique selling proposition (USP).
Being able to spot what people need and make the most of it is a useful skill.
Here are a few courier business ideas for you to consider.
- Grocery and Food Delivery: You can receive a client’s shopping list and deliver their groceries within a time frame. Some businesses offer live shopping as well. You can also choose one of the great food delivery services to work for, such as Uber Eats or Instacart.
- Furniture Delivery and Assembly: If you’re a good handyperson, you can contract with furniture stores to deliver and assemble their products. Although some furniture manufacturers already offer this service, most discount retailers don’t.
- After-hours Courier Services: Most courier services operate during the day. Aside from emergency deliveries, not many courier companies offer standard after-hours services. You can take advantage of this and offer grocery or over-the-counter medication delivery.
Frequently Asked Questions
Q1: How do courier companies get clients?
The most basic way to get clients is by partnering with local stakeholders and contracting with them.
Courier companies work on attracting clients by offering special packages, exciting deals, and great customer service too.
However, thanks to the internet, there are several other ways, including
- Online advertising.
- Loyalty programs.
- Online promotions.
- Social media marketing.
- Email marketing.
Q2: What courier pays the most?
There are many courier companies with excellent pay.
Take a look at the table below, showing five couriers and how much they pay.
Similar Businesses To Consider Starting
If you think a courier business isn’t for you, there are many similar businesses involving transportation to consider.
- How To Start a Medical Transportation Business : Whether an emergency or non-emergency medical transportation, this business is highly rewarding. You need at least an ambulance or ambulette to transport patients to and from medical facilities.
- How To Start a Trucking Business: You get to transport goods over long distances between states or even countries. It’s a thriving business and always in demand, with online shopping and e-commerce becoming more popular.
- How To Start a Transportation Business: People rely on transportation daily. That’s why a business of this kind guarantees excellent income, especially after building a great reputation.
There are countless variations when it comes to the courier industry.
Choosing your specialization is vital, but knowing how to start a courier business is what matters most.
It’s not about how big you begin, as you can start with one vehicle. It’s all about good planning and strong management.
If you give it your all, you’ll end up with a fleet in a short time.
Make sure to express your thoughts in the comments below and share the article with your friends.