Start A Logistics Business - Business Ideas
Logistics businesses focus on transportation and storage/warehousing, which are critical components of the supply chain. Without elaborate logistics, businesses will deliver goods to their customers efficiently and reliably.
A logistics business connects manufacturers and consumers through transportation and safe storage of products. Logistics may be a good place to start if you are interested in a supply chain-related business but not sure which one. You can work as a driver, connect manufacturers to storage warehouses and transportation companies, etc.
Starting a logistics business requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell logistics, or selling logistics online, you can use this page as a guide for everything you'll need to know.
Want to learn more? You can check out our full guide on how to start a logistics business ➜
Key Stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
| Office Space Expenses | $0 | $7,000 |
| Employee & Freelancer Expenses | $151 | $352 |
| Website Costs | $223 | $7,215 |
| Business Formation Fees | $600 | $4,700 |
| Equipment & Supply Expenses | $66 | $700 |
| Vehicle Expenses | $2 | $10,004 |
| Software Expenses | $162 | $3,069 |
| Advertising & Marketing Costs | $75 | $5,286 |
| Total Startup Costs | $1,279 | $38,326 |
Case Studies
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$150K/mo
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$2M/mo
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
4PX Worldwide Express | 4px.com | #1,969 |
|
ShipBob | shipbob.com | #5,266 |
|
|
Sendle | sendle.com | #10,931 |
|
Ninjavan | ninjavan.co | #14,318 |
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XPO Logistics | xpo.com | #28,304 |
|
DCL Logistics | dclcorp.com | #152,637 |
|
REEF Technology | reeftechnology.com | #161,290 |
|
Geodis | geodis.com | #187,955 |
|
LMI | lmi.org | #206,344 |
|
Shapiro | shapiro.com | #252,046 |
|
Kenco Group | kencogroup.com | #287,135 |
Pros & Cons
| Pros | Description |
|---|---|
| Flexibility | You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
| Meaningful business connections | You never know who you will meet as a logistics business. This could be the start of an incredible business opportunity! |
| High customer retention rates | Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
| Pick & choose the clients you work with | Logistics Businesses have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients! |
| Control of workload | With starting a logistics business, you have the unique ability to choose how little or how much you want to work. You also have the freedom to decide which projects you want to work on, and can turn down the ones that do not interest you. |
| Gain exposure and experience | This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you! |
| Cons | Description |
|---|---|
| Motivation of employees | If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees. |
| Longer Sales Process | A logistics business can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers. |
| Security Issues | With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road. |
| Low margins | The gross margins for your logistics business are typically around 47%, which can make it more challenging to incur new expenses and maintain profitability. |
| High employee turnover | In the logistics business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment. |
| Taxes | As a logistics business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it. |
Marketing Ideas
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1
Direct Sales
Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.
For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
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2
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
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3
Partnerships
A partnership is a formal agreement between two or more entities to oversee business operations and share profits and liabilities.
Creating strategic partnerships with an existing business can be a huge win for a startup.
This is considering that a partnership creates a new slate of future options for your startup.
On the other side, pursuit of partnerships could suck up a ton of time, and bunch of resources, and fail to materialize.
Therefore, entrepreneurs need to do proper research and evaluate the possibilities of achieving success through partnerships.
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