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.
You can see the growth of this market over recent years.
In this article, we try to examine the aspects of starting a courier company and give you a comprehensive view. If you are unfamiliar with courier companies, it is better to read this article first: what is a courier service.
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 business or you already have one, be with us.
Before starting your courier business, 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’ requests for courier service is less than businesses ’ requests. The courier doesn’t have high-frequency demands like taxi or ride-hailing services.
Our focus is on explaining 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 & 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 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.
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 businesses that need daily delivery service:
Actually, there are many kinds of customers for a courier company and, you can select start marketing for each one.
The choice of activity area (geographically) and the types of courier services 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 long-distance and it works 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 of your competitors is an important factor of the determinants of the market status. Create a list of active courier businesses in all fields.
The list should be similar to this table. This table will need to be updated. It is necessary to document the studies you do.
|Courier A||Same-day||Distance||Restaurants |
|Courier B||On-demand||Distance + Time||Groceries||Bike||cou-b.com|
|Courier C||Same-day |
|Weight + Size||Individuals|
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, They will create your unique identity in the audience’s minds.
This item can be used in the branding process:
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.
In this section, we will be discussing about the cost of starting a courier business. There are a lot of variables that can affect the cost of starting and running a courier business:
If you’re looking to start courier service in your area, it’s best to contact local courier businesses in the industry and ask them about their costs for similar services.
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. We’ve talked about how to get courier contracts in another article separately. You can read it for more information.
In another article, we’ve discussed 7 Useful Courier Advertising Ideas which helps you increase your customers.
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:
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:
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.
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 A||ZONE B||ZONE C|
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.
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:
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.
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.
If you are looking for a courier software, by clicking the button below, get your courier software demo for free.
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Originally published July 7, 2021 11:12:00 AM, updated Sunday, 25 December 2022.
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