You can blame it on Amazon’s lightning-fast Prime shipping, but customers today are demanding quick turnaround times on their orders. In fact, a staggering 91% of buyers expect to receive their goods within one week, while 9% even expect them to arrive the same day!
From large enterprises to small businesses, companies around the world are looking for ways to make their shipping process quicker and more efficient. To keep operations high and profits low, many are turning to third-party providers who can take care of the legwork for them.
Are you interested in starting your own shipping business to fulfill this need? Today, we’re sharing everything you need to know as you get started.
1. Research Your Market
The shipping industry is big business, but it’s also got big competition. Modern entrepreneurs are realizing the need for this service in virtually every corner of the globe, and are acting accordingly.
Before you invest in the tools and technologies required to facilitate small business shipping, start by checking your local market. Is there already another provider dominating the space? Or, is there an opening and room to grow?
List all of your known local competitors, as well as their pricing plans, service offerings, and other key details. If you still think there’s a viable need, then map out your core differentiators. In other words, what will set your business apart from other local shipping companies?
Will you offer unparalleled speeds? Is your team large enough to handle the high-volume demands of an international shipping business? Are you pursuing any special industry certifications in shipping and logistics?
When you’re thoroughly familiar with your market, you’ll be better prepared to enter into it. Knowing your audience, your competitors, and what makes you unique will be key as you move forward.
2. Create a Business Plan
Any legitimate business is based on a strong plan. Before you take another step forward, it’s time to strategize your long-term goals for your freight shipping business.
If you require the assistance of investors or partners, they’ll require a concrete business plan before they even consider your proposal. You’ll want to be prepared with facts, numbers, and budgets that clearly define your plans and initiatives.
How do you intend to run your shipping business and turn a profit? What types of companies will you work with? What different service levels will you offer?
These are only a few of the questions to answer in your business plan. Other core details to include are:
- Your unique selling proposition
- Your academic and professional skills
- The target market you’ll serve
- Your financial plans and budgets
- Your core competencies
Even if you plan to go into the shipping business on your own, you may still require a commercial loan from your local bank or credit union to get started. They’ll need to see a business plan too, so create one as soon as possible.
3. Determine Your Mode of Operation
When starting a shipping business, there are three basic operating modes you can follow.
The first option is to open an independent shipping store, where clients contact you directly to handle their shipping needs. If you’re catering to small businesses, they may bring their products directly to your brick-and-mortar location, where you’ll package them up and send them out.
If you’re planning to offer your services on a larger scale, you’ll need to think about the logistics of warehouse planning. Where will you store the products before you ship them, and what type of equipment will you need to handle those orders?
If your facility is industrial-sized, then you may need a utility vehicle to move around it easily. You can find a range of Columbia utility vehicles online that are up to the task.
The second option is to purchase a shipping franchise. With this approach, you’ll open a new local location that’s part of a larger, national chain. The benefit to going this route is there’s already built-in name recognition, as well as a loyal customer base. In a similar vein, the third option is to buy a local pack-and-ship store and assume ownership of it.
4. Calculate Your Startup Costs
Once you’ve determined your business model, it’s time to calculate how much you’ll need to invest to get started.
While you can reduce initial capital costs by opening your own shipping store or buying out a local one, it’s usually easier to get up and running when you work for a franchise. Their corporate office can walk you through all of the steps required to establish your business.
You don’t want to get into the shipping industry just to find that you can’t afford to stay afloat. Some of the most common startup costs to budget for include:
- Incorporation fees
- Insurance, permits, and licenses
- Cost to rent or purchase your office or warehouse
- Office equipment
- Shipping equipment (e.g. barcode printer/scanner, labels, computers, credit card reader)
These are only a few of the initial expenses you can expect. If you plan to offer complex services, such as maritime transport, you’ll need to think about the costs and logistics involved in purchasing the required shipping containers and vessels. These can be enormous, so it’s smart to get partners and investors on board first.
Otherwise, you’ll need to set up accounts with major shipping companies, including UPS, FedEx, and DHL, as well as any trucking businesses in your area. These will be the partners who actually move the product, so connect with them as early as possible.
5. Get the Word Out
Once you’ve set up shop, hired a great team, and started offering your services, it’s time to let others know about them! A great marketing campaign can help you stand out in the shipping space and set your name apart from local competitors.
If you’re skilled in marketing, you may be able to handle these tasks on your own. Otherwise, outsource the effort to an expert marketing team that can make sure the right people see your name.
Start Your Shipping Business Today
There will always be a need for fast, reliable shipping companies. This is great job insurance, and it can give you the confidence you need to take that next step forward.
If you’ve been thinking about starting your own shipping business, now’s a great time to get started. By following the five steps above, you can stand out in your community and offer premium services that your clients love.
Looking for more trusted business advice? Check out our other informative articles today!
