The convenience of online marketplaces like Amazon is making it difficult for brick-and-mortar locations to compete, which could be a boon for the astute entrepreneur. Customers’ shopping habits are changing as more people prefer to shop for everyday necessities online. Customers want to stay safe in isolation during quarantine, so COVID-19 exacerbates the shift away from physical shopping.
Every holiday season brings a surge in sales and deliveries, but for freight and courier companies, this year will be especially intense and unprecedented. As long as brick-and-mortar re-openings are on hold in many of the country’s major cities, supply chains will be overburdened with excessive demand. To fill the voids, newcomers to the delivery industry can take advantage of this year’s record sales by becoming delivery proprietors.
What is the most effective method of fleet management?
Reviewing industry and motor vehicle regulations is the first step toward becoming a delivery proprietor. The next step is to form your company as a sole proprietorship or a limited liability company. The third step is to concentrate on your business plan, which outlines your revenue generation, cost-cutting, and customer retention strategy. Here’s how it’s done:
Review your Industry’s Regulations
SEMA.org, which provides advice on how to stay up to date with auto regulations, is a good place to start looking up your state’s regulations.
Starting Your Own Company
- Check with the county clerk’s office in your area.
- Consult an attorney to determine whether an LLC or a sole proprietorship is the best option for you.
Creating a Business Plan
Decide how your business will create value for customers once you’ve figured out the legal details and structure. Your worth to your customers goes beyond just shipping goods. You’re also saving them time, exposing them to health risks during the pandemic, the frustration of empty shelves, and their own travel expenses. As a result, some business owners keep their balance sheets in good shape by adding a margin to their purchases in addition to their shipping costs. For example, a pizza delivery that normally costs $11.99 can be sold to customers for $15.
Establishing a baseline price for courier delivery services and then adding on additional charges based on the hour or mile is standard industry practice. Expect to pay your drivers around $30 per hour when delivering via light vehicles (cars, pickup trucks, or minivans). Smaller vehicles give you more options for keeping your startup costs low. Cargo vans, box trucks, and pickup trucks, on the other hand, are the best vehicles for deliveries. These larger vehicles, which are better equipped for longer routes, will also increase driver costs, as drivers can earn up to $36 per hour, so adding fuel or mileage surcharges to your customers’ bills may be beneficial.
Pro Tip: Fuel-efficient vehicles are recommended because your delivery routes will cover a lot of miles!
Adjust your overall revenue plan to include advertising costs, vehicle maintenance, vehicle and cargo insurance, and possibly liability insurance after you’ve determined your overall revenue plan.
Developing a Clientele
It’s time to determine your customer base now that you’ve considered the legal ramifications, devised a pricing strategy, and compiled a detailed list of expected and potential costs. You’ll be able to budget more accurately and keep your fuel costs under control if you narrow your customer base. Determining your delivery boundaries is a great way to narrow your customer base. Then decide which days and for how long you’re willing to work. This will also go a long way toward ensuring that you have a healthy work-life balance. If you want to stay in business for a long time, this is critical.
Most grocery customers, on the other hand, place orders with nearby markets, allowing couriers to include routes that don’t add too many miles to their mileage counts. When speculating on potential retailers who might require your services, try to be as thorough as possible. Consider law offices or dry cleaners in addition to grocery stores, restaurants, and malls. Then you can start advertising. Create an online advertising strategy that allows you to target potential customers in a specific area using Facebook ads and distribute flyers in your service area.
You’ll want to create a loyalty program once your delivery business is up and running (or should we say driving). You don’t have to think too hard about your loyalty program. You can begin by providing free deliveries in exchange for a certain number of deliveries or package deals. Determine what makes the most sense for your customers and make it available to them.
The Right Gear
It’s time to start thinking about what equipment you’ll need once you’ve got your trucks or vans. A hand truck or dolly is the most common tool used by delivery drivers. However, there are several types to choose from, including a moving dolly and an appliance dolly. Which tools you buy will be determined by the type of operator you want to be. The more tools you have, the more jobs you can accept and complete.
It is critical to secure the cargo in order to avoid delivering damaged goods. As a result, every delivery professional requires multiple sets of ratchet straps. Consider keeping extra bungee cords on hand for extra tie downs. Moving blankets are also a good investment because padding cargo with blankets is much less expensive than replacing a broken item. Wrapping items in stretch wrap for extra protection during used furniture deliveries and moving is a good idea. Use a strong tarp to protect items from rain if you have a pickup truck.
Save Time and Money with Routing Software
It’s best to rely on a network of independent contractors as a startup. Make use of a suitable app, such as Easyroutes, which excels at logistical planning automation. In seconds, you can create a route and send it to your drivers, complete with a packing list, a mobile-friendly delivery view, and the most efficient route for your drivers. Entrepreneurs should invest time in finding the right software and capabilities.
A digital service like EasyRoutes is essential for making deliveries as quickly as possible. Furthermore, by using digital tools to create the most efficient route, delivery companies can reduce employee work hours and save money on fuel.
The real work begins after you’ve completed the difficult task of acquiring customers. A 95% success rate isn’t going to cut it if you want to keep your customers. One of Jeff Bezos’ key strategies was reinvesting capital and funds that would have otherwise gone to marketing and advertising back into operations. Bezos ascended to new heights by obsessively improving the supply chain and promising one-day shopping.
Mistakes are unavoidable. If a human error occurs, a service like EasyRoutes gives you more flexibility to track items and resolve customer disputes more quickly. It’s critical to set up failsafe processes early on so that only a small percentage of deliveries result in incorrect items, damaged goods, or late deliveries.
Take Advantage of the Delivery Gold Rush!
The world is in the midst of a massive transformation. The threat of automation, as well as the challenges that retail faces, foreshadow a new world, one that is very different from the one we all remember before the pandemic. This is fantastic news! The truth is that as the world changes, new opportunities will arise. Taking advantage of these opportunities necessitates education, courage, and a willingness to think outside the box. Entrepreneurs can invest in a growing industry by becoming delivery proprietors, and there’s no better time to get started than right before the holiday season begins.