How to Start a Delivery Service Provider Business

Did you know that if the percentage of total sales completed online continues at the same rate of change as today, 35% of all purchases will be made online by 2030? With so much retail moving to eCommerce, there’s never been a better time to be in the home delivery space. If you’re an entrepreneurial type who has always wanted to start a business, launching a delivery company is easier than it sounds. Below is a high-level overview of some things you’ll need to consider to get started.

1.     Choose a Delivery Services Company to Partner With & Launch the Business

Many of the major package couriers like FedEx and UPS employ their own drivers, but also rely on partnerships with contracted businesses to carry out their operations. Do some research into the programs offered by the delivery companies that service your area, because partnering with them has a lower barrier to entry than finding clients yourself. Leveraging a partner means you’ll have consistent access to package delivery needs, can leverage their buying power, and may be able to use the company’s software to manage your operations.

Here are a few companies that commonly partner with third-party delivery businesses.

If the program you select allows it, you may also look to source additional routes and streams of revenue through third-party logistics companies.

Like any other business, you will be required to register and file your delivery company with your state before launching operations.

2.     Implement a Delivery Management Solution

Delivering across a region to people’s homes requires logistics management if you want to scale and grow. Your company will require delivery routing software to keep track of drivers and packages, operate efficiently, plan route optimization, and maintain organization. There are a number of software options out there, or the package courier partner you choose to work with may require that you implement theirs. Conduct research on the best delivery management software based on your unique requirements.

3.     Lease Vehicles & Fleet Management

Next, you will need to rent or lease vehicles that you can use for the deliveries. Renting grants you extreme flexibility to ensure you have immediate access to the assets you need to perform the services you are contracted for. It also allows you to scale up or down quickly to adapt to changes in the flow of your routes. Leasing allows you to limit vehicle expenses and helps you to get the job done without needing significant cash upfront to purchase the asset outright. It also allows you to scale quickly as your business grows. You’ll want to look for a fleet management company with flexible terms and an all-inclusive commercial pickup truck rental program. Merchants Fleet is used to working with delivery business owners and can help you get the right vehicles to match your needs.

Also consider that once you have your rental or lease, you will want to ensure your vehicles are running optimally for the lowest total costs. This means paying attention to operating costs like fuel, maintenance, and insurance. Work with a partner, such as a fleet management company with an all-inclusive solution and fleet management software, to ensure your vehicles remain running smoothly.

4.     Hire & Train Drivers

In order for your delivery business to scale, you will need to hire drivers who will make the daily deliveries. Look for people who are trustworthy, respectful, and believe in the company you are trying to build. Consider performing background checks. You can work with a third-party administrator as well to help screen and hire drivers.

Keep in mind that if you do partner with a package courier, your driver may need to abide by the same employee guidelines as their own staff because your driver’s actions are reflecting back on their company as well as yours. Also, some partners may require that your driver wear a company-specific uniform and follow all compliance protocols.

5.     Operate the Business & Demonstrate Leadership

Leading the business will require strategy and determination. Your drivers will be looking to you for motivation and guidance as your team strives for operational excellence in providing an exceptional customer experience. Holding your drivers to a set of standards and metrics will be critical, as package delivery must meet strict timelines and be executed near-perfectly. If you succeed in doing so, your delivery business will have opportunities to grow and scale to meet the ever-increasing demands of the American consumer for rapid and seamless home delivery.

Think you have what it takes? Merchants Fleet serves delivery service providers by helping you get the vehicles you need to deliver goods to customers.

Diana Holland serves as Vice President of Strategic Pursuits at Merchants Fleet. She joined Merchants in February 1998. Diana is responsible for direct pursuit strategy and successful implementations of strategic accounts. She participates in operational excellence efforts, elevates organizational talent, and contributes to the industry by serving on the Automotive Fleet Leasing Association’s Women In Fleet task force, Conference task force, and co-chairing their Digital Learning task force.

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