How-to-start-a-courier-business

Courier

How To Start A Courier Business

2021 Complete Guide

The delivery Services industry is one of the 5 markets that boomed because of the Covid-19 pandemic. Prosper E-commerce and online shopping have increased demand for goods transportation courier companies that move these packages. Courier Business is an important bunch of delivery industry so starting a courier company at this point is a bright idea. In this article, you will know how to start a courier business and how to get more contracts for it.
You can see the growth of this market over recent years.

how-to-run-courier-business
Courier Market SIze In Billion Euros [Link]

In this article, we try to examine the aspects of starting a courier company and give you a comprehensive view.

Contents

run-courier-business
Choose Target Market
drivers-vehicles
Drivers And Vehicles
courier-business-run
Type Of Courier Service
start-legally
Start Your Courier Business Legally
courier-competitors
Competitors Research
How-to-run-courier-business
Advertising And More Revenue
brand-logo
Brand, Logo, And Identity
courier-company-pricing
Pricing, Rates, And Fees
courier-tracking
Tracking Drivers and GPS
proof-of-delivery
Proof Of Delivery Management

Who can use this article?

This article is suitable for two groups:

First: who has intended to launch a courier business and hasn’t done yet. This article argues a complete comprehension of a courier service and important concepts of this business.

Second: is courier companies which currently operating but want to improve their operations and increase their profits.

So whether you want to start a courier service or you already have one, be with us.

Choose your courier business target market

Before starting your Courier Service Company, you need to know the type of customers. Customers are divided into 2 categories, individuals and businesses. According to these two categories, a courier company can be one of the following two types:

B2B: Businesses that provide service to other businesses. in this case, your customers are organizations and businesses, like restaurants, groceries, pharmacies, and more.

B2C: In this case, you have a courier business and provide services to individuals.

Contrary to popular opinion, Individual’s requests for courier service is less than business’s requests. The courier doesn’t have high-frequency demands like taxi or ride-hailing services.

Our focus is on explain the types of customers for a group of businesses that have high-frequency daily courier services.

Delivery service is required in almost all industries. You can not cover the whole market at first unless you have a significant financial capital that you can spend on the operation and initially form a large team, consisting of drivers and operators.

So you need to know the market and then select one or more segments of it. In the following, we will introduce some of these sections.

– Restaurants and Catering

Restaurants & Catering have to deliver many food packages every day, most of these businesses prefer outsourcing their delivery services to a courier service company, some of the advantages outsourcing are: on-time deliveries and improve quality and productivity. If you have a separate delivery service provider you don’t engage whit driver and courier challenges and you can focus on your core operations. In addition, to provide delivery service for restaurant and catering, you should provide special express service

– Online Stores

Online stores are the main customers of Courier Companies. Each online shop process has been delivered, but Online shops prefer outsourcing delivery service and focus on the main operation, more sales. Online Stores are used to same-day and next-day courier services cause they are cheaper and faster.

– Supermarkets (groceries)

Nowadays Shopping from online supermarkets has increased and these businesses have many deliveries per day. because of that groceries are a bunch of Courier Company customers. Providing services to these companies, depending on the purchase types and customer’s preference, can be on-demand or same-day.

– Other Courier Business Customers

Other businesses that need daily delivery service:

  • Laundry
  • Banks
  • Governmental sector
  • Florists
  • Pharmacies

Actually, there are many kinds of customers for a courier company and, you can select start marketing for each one.

Specify type of courier service

The choice of activity area (geographically) and the type of delivery service that can be provided by the company are varied. Each of these services needs its own equipment, pricing, facilities, and marketing methods.

On-Demand: As soon as the order is received The package will be picked up and the driver will deliver it. This service is the fastest available service and is provided locally (in a city or an urban area). It is expensive because it provides a driver and equipment. There is no need to hub or warehouse In this type of service.

Same-day: The package that is picked up and delivered on the same day. Usually, the package must be received before noon. If a package is received in the afternoon, it will be delivered to the recipient tomorrow. Service doesn’t provide to long-distance and it’s work locally. The cost of this method is less than on-demand due to the aggregation and distribution model.

Next-day: It is similar to same-day, but the package is delivered the day after pick up. In this case, the cost is usually lower than the same-day. In the Next-day and same-day methods, the company needs to have a hub (or warehouse) to store packages.

Analysis your courier competitors

Analysis of your competitors is an important factor of the determinants of the market status. Create a list of active courier businesses in all fields.

  • Company title and website address (if there is)
  • Services (list of services they offer)
  • Pricing and rates
  • Activity zone
  • Target market
  • Type of vehicles
  • Number of vehicles
  • Duration of activity

The list should be similar to this table. This table will need to be updated. It is necessary to document the studies you do.

TitleServicesRatesMarketVehicles TypeWebsite
Courier ASame-dayDistanceRestaurants
E-Commerces
Van
Car
Bike
cou-a.com
Courier BOn-demandDistance + TimeGroceriesBikecou-b.com
Courier CSame-day
On-demand
Next-day
Weight + SizeIndividuals
Caterings
Pharmacies
Vancou-c.com
A simple table of competitors

Design your courier business brand, logo, and identity

how-to-run-a-courier-service

Be careful when choosing the name, brand, logo, and color of your company. Your cars and drivers are the moving billboards of your company in the city. Unique color, logo, and organizational slogan are the best advertisement for your Courier Company, in addition, That will create your unique identity in audience minds.

This item can be used in the branding process:

  • Drivers’ uniforms
  • Boxes of motors
  • Car stickers
  • Envelopes and packages
  • Website

Drivers and vehicles for start a courier business

Vehicles and drivers are two related items. Before you start a courier business, you should know drivers can be hired in two ways:

Employee: Company provides equipment and vehicles, hires drivers, and pays a wage. Fuel, maintenance, and repairs costs are the responsibility of the company. Sometimes, to motivate drivers, the company pays them more in the form of order commissions. This method is usually used for same-day companies because it has a predicted delivery volume and requires drivers in certain shifts. These drivers are also called internal drivers. Drivers normally have to accept and do the orders.

Freelancer: In this method, drivers work with their cars for the company. As a driver, you decide how much and which hours you drive. This method is mostly used by companies that provide on-demand services. The company’s financial model is a percentage, which means the company deducts a percentage of orders fee as revenue.

Your company needs to have the appropriate legal structure. You accept any type of packages  Which may contain anything, expensive or cheap, flammable or dangerous, and more so you must secure your courier business and check the legal cases to need.

Advertisment | How to get more courier contracts?

We will talk about how to get courier contracts. Increasing revenue and profit are the goals of any company. It is important to create a marketing plan and perform work that will entice new customers. Among the marketing strategies that each company utilizes, there are two major ones, and both help one another, but each demands its particular approach. There are two types of marketing: inbound and outbound.

Inbound marketing: Depending on the strategy you select, customers come to you and then communicate with you to utilize your services.

Outbound marketing: differs from inbound marketing in that instead of waiting for new customers to appear, you call and try to turn them into actual clients. This article describes a four-step approach to get more courier contracts that rely on outbound activity. Our goal is to make this information useful for you.

You can get more courier contracts by following the steps below.


First: Market research

Courier companies can provide services for what kinds of businesses?

In this step, it is essential to identify the market and what businesses offer what packages, and what their requirements, needs, and price are, as well as what the end customers are looking for.

It is impossible to attack all of the market segments simultaneously. Your potential customers should be your top priority. Several factors can contribute to this prioritization. These are some of the factors to consider.

  • The number of orders and packages: The more packages and orders you receive, the more profit you make. Increasing orders involves two strategies. There are two scenarios: high customers with low orders, and low customers with high orders. These two options are on opposite ends of the same spectrum, and businesses fall somewhere in between. While receiving a high number of orders is always helpful, it should be considered whether your company has the infrastructure required to deal with this volume of work?
  • Business type and industry: It’s important to know what type of business your customer runs. Online stores don’t have the same needs like restaurants, for instance. Online stores sometimes deliver orders the next day or the same day, while restaurants deliver food immediately after the order is placed. Likewise, packages may be ordered in the medical context that has to be stored at a particular temperature, in which case vehicles that contain a refrigerator are needed.
  • End-user requirements: Are end-users (customers of packages) individuals or businesses? Do end customers need to know when the driver arrives at their location? How long will it take to deliver the final order to the customer? Is it necessary to follow certain delivery protocols? When determining if one is a potential customer, you must ask yourself these questions.
  • A customer’s profit margin on each order: An important factor in evaluating a customer is the amount the customer pays for delivery and what percentage of that cost is his profit.
  • Package size: Overall, your fleet has volume limitations when it comes to moving packages. Make sure to check the package size with companies.
  • As it stands: What are its current package delivery procedures? Does it work with a courier service? How do you compare to that company in terms of advantages and disadvantages? How does the company handle moving packages on its own, or do they hire a service company? You can understand the next steps by knowing how the customer is performing at the moment.

Second: Provide A Proposal 

This step involves forming a proposal based on the information you know about the customer and their prioritization. See things through their eyes, what would matter to them if they were you. This proposal includes the following parts:

  • Company presentation: Please provide the background to your company, a description of your activities, the type of services you offer, goals, values, and a picture of your office if you have one.
  • List of potential clients: A customer’s trust is key to a purchase decision. In submitting your list of customers, you get the message that you are serving as well as that you have satisfied customers who will continue to work with you. Customer feedback about you is great if you get it.
  • Pricing/Rates: In logistics, last-mile make up 60% of the cost [Link]. Having clear pricing at the beginning of the deal will facilitate customer decision-making. Considering a competitive pricing strategy that makes sense to your customer is worth considering, and in cases of high volume, a little difference will reduce your customer’s logistical expenses. It is important to note that the low price is a low-quality signal, since the quality of service plays a more important role in B2B business relationships. As shown in the table below, you can see a catering delivery service  pricing:
how-to-get-courier-contracts
  • Vehicle Types: Describe the type of vehicles you have and their quality according to cleanliness, professionalism, and new fleet. Your proposal should include a high-resolution picture of your clean car.
  • Delivery Time Window: The delivery time is an important criterion for your customers in deciding whether to buy your goods and/or services. Each service may have a different delivery time as well as a different price, for example, an express three-hour service or the same day.
  • Insurance for packages: Is your company insuring packages? What is the extent of its damage acceptance? Do insurance policies cost a lot? Answers to these questions are what your customers want to know.
  • Ancillary services: Likewise, if you provide auxiliary services, such as a carrier of heavy loads or a packing service, include them in your proposal.
  • Technologies used (such as ETA): Organizations strive to be technologically advanced while providing their customers with the same. Providing technology-based services, such as tracking, ETA, proof of delivery, etc., to a company as a courier service provider can be advantageous for that company’s customers.
  • Transparency: Be sure to mention that you use courier software that offers maximum transparency to the customer in your proposal. If your customer knows the condition and process that the shipment has undergone (history), they are more satisfied with the service you offer.

Third: Offer the proposal (Present) 

Now you must find out who will present this offer to your customers, where and how.

Your decision to email, contact in person or request a meeting will depend on your customer. Nonetheless, stakeholder beneficiaries need to hear about your benefits. Therefore, you need to present your offer and the benefits of working with you appropriately to the person deciding on the customer’s organization.

The best way to communicate with your customers is to understand the customer decision hierarchy and their standard ways of communicating.


Fourth: Following up and Finalize The Contract 

It is essential to check in with participants with whom you have been in touch. Have they read your offer? Having read the article, what do they think about it? Do they have any other options? If your customer needs more information, let them know in the follow-up. As a delivery partner, it is important for you to fully comprehend the reasons behind their rejection.

You begin providing the service to that client after the contract is finalized.

Getting customers is difficult, but keeping them requires even more effort. In this way, new customers can always be attracted. Customers are considering changing partner companies when competitor companies cannot maintain their customer satisfaction levels.

Don’t Forget Promotions

Promotion is A good way to increase your chances of getting a new courier contract.

Test your service with your customers. Try your service for two weeks free or with a 50% discount for two weeks. This is an excellent way to send them a quality signal. Your confidence in your service is confirmed by doing so.

The amount of discount you can offer your customers is, of course, determined by your financial resources.

Specify your pricing structure and rates

the main factor to motivate customers to buy is the right price. you should optimize your pricing. To determine the pricing, first, you need to specify the type and scope of your service. 

The main price factors are as follows:

  • Distance between origin and destination
  • Route time (this factor is usually considered next to the distance to apply traffic)
  • Package weight
  • Package dimensions
  • Vehicle type such as motor, van, passenger, which is usually used in on-demand services
  • Tax

To move a product from point A to point B customers pay the cost, in addition to this main service, courier company can receive a fee for other services:

  • Relocation assistant
  • Package and goods insurance
  • Packaging service
  • Cash On Delivery

It will be good if you think about additional services that you can offer when you are thinking about how to start a successful courier business.

Table showing the pricing of one of the courier companies.

Courier-business-pricing
An example of courier simple pricing

Your pricing and profit and loss statement can be changed depending on the feedback you get.

One of the pricing methods is based on zone. That means the courier company’s service area is divided into several zones and fixed pricing will be considered between these zones.

Here is an example

ZONE AZONE BZONE C
ZONE A$10$15$30
ZONE B$15$10$25
ZONE C$30$25$10
An example of the zoning pricing table

Track your couriers and vehicles

You need to find your point driver on the map at each moment. Customers, both sender and receiver need to know the driver’s location and receive time. The traditional way is buying GPS devices and installing them on vehicles. This method is accurate and, but you should buy a GPS device for each vehicle, it has too much cost.

the driver’s mobile phone can be accurate GPS. All you need is courier software to collect, view and analyze the driver’s route and location.

Collect the proof of delivery (POD)

It means that when the driver delivers the package, he/she will get proofs that show that he delivered the package safely to the right person. POD can be one of the following:

  • Package photo in the recipient’s hands
  • Recipient signature on the driver app screen
  • Photo of the delivery receipt signed by the recipient
  • Photo of the package at the place of delivery (eg, behind the door)

There is a need for proof of delivery in some orders, which, unlike in the past, when special hardware devices (ePOD) were used to receive signatures, now mobile software can be used to receive photos, signatures, and text. If you can get more information, see courier management software.

Conclusion

Achieving a successful business is difficult, but you can lead it properly if you know enough about that business.

Here were some points to help you get started or improve your courier business. If there is a topic left out, please let us and other readers know in the comments.

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