How to Make Money With Logistics Business: Discover Top 8 Ideas

So you’re thinking about how to find a profitable and interesting idea to make money with the logistics business? This article highlights top ideas to make money.

Logistics business is a relatively new market, but it has created opportunities for entrepreneurs, employees, and investors.

Every day millions of packages are packed, shipped, delivered, and returned to retailers for return. It doesn’t matter whether it’s clothes or even food you can drive your business according to your passion.

Logistics business is profitable if done right.

By reading this article, you will get acquainted with the top 8 ideas to make money with logistics business.

Quick Review 

If you’d rather glance throughout the key points and come up with ideas on your own, check this section.

  • Tie up with other logistics companies
  • Provide courier services for online shopping portals
  • Offer packing and packaging services
  • Use transportation management software for efficiency 
  • Charge higher fares at peak times
  • Let companies advertise on your vehicles and get paid
  • Ask for business from hotels and restaurants
  • Offer warehousing services

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Detailed Review

Here, you’ll find more information on how to go about each key points listed above. Your journey towards making money with logistics business starts here.

1. Tie Up With Other Logistics Companies

Logistics is all about transportation and arranging for delivery to the customer. It may be you using your fleet or it may be you acting as a middleman between seller and buyer. There are many logistics businesses in the world today. 

If you don’t have so much money for investment, go for tie-ups with other companies. Many companies out there do not have enough capital, so they prefer tie-ups to start their own business. This way they reduce cost and risk while also making money with their logistics business.

For example, you can share the cost of drivers and their salaries. Another example is that you can share the cost of fuel, maintenance, and repair of vehicles and machinery and tools used in managing the logistics business.

2. Provide Courier Services for Online Shopping Portals

Make money with logistics business by shipping products ordered on the Internet. This is one of the easiest and best strategies to employ. In the golden age of e-commerce, there are many online shopping portals that want to deliver their products to customers’ doorstep. 

The delivery process may be complicated because of the different logistics networks in different countries. Now, courier companies are getting more potential opportunities to achieve great success with their logistic businesses.

Besides, there is always a need for handy people who know how to handle multiple packages and solve problems on the go. If you want to be a consolidator and deliver goods from online shopping portals, you can become a delivery agent to make money with the logistics business.

SEE: Best eCommerce platforms to start your online store

3. Offer Packing and Packaging Services

It’s very easy to enter this kind of business because the packing and packaging of the products are strongly related to logistics. Packaging is one of the top concerns online shoppers have. Most prefer to buy items that are safely and well packed. 

Besides, during the packing and packaging service, there is an opportunity to do some advertising about the products that you sell. So if you want to make money with the logistics business, you can consider offering packing and packaging services. 

If you think it’s not your expertise – no worries, here are some tips on how to find partners who will help you to start your own business with packing and packaging services.

  • Call companies that are moving offices or renovating
  • Ask questions about packing and moving
  • Offer your services to other companies in the logistics business
  • Get a business directory to find potential partners
  • Research your competition to find what they are doing better, and how you can do it better

SEE: Are moving companies worth it?

4. Use Transportation Management Software for Efficiency 

Initially, the people responsible for managing transportation were just accountants. Over time, their role has evolved into that of a consultant, advisor, and coordinator. They use transportation management software to help them maintain shipping records for each client.

The transportation management software (TMS) is software used to manage the logistics involved in transporting freight, merchandise, supplies, materials, etc. Transportation management software can deliver efficiency gains of 10% or more. 

Some TMS solutions are designed for parcel transport; some are suited to more diverse freight needs. As a result of TMS integration, companies can manage all modes of transport quite easily and also ensure that all parties involved are communicating consistently and easily.

With TMS, a logistics business has an effective and efficient process, so it can focus on other aspects and make more money.

5. Charge Higher Fares at Peak Times

This one of the best eCommerce tips is to charge higher fares at peak times to make money with your logistics business. Also, most people tend to rush through the entire day instead of planning. Instead of waiting until there is adequate time, they rush their schedule and spend too much money on logistics.

If you are operating a transport services business, it is not difficult to make more money if you upgrade the capacity on some routes at peak times. This type of flexibility is available with many services like community transport routes and school bus services where travel demand is low outside of the school day. 

Similarly, even though the distance traveled is greater at this time, it will be possible to generate additional revenue if you charge more for trips between 10 am and 3 pm that is currently subsidized. 

6. Let Companies Advertise on Your Vehicle(s) And Get Paid

When you are driving around town distributing products, people will see your vehicle. And they’ll see your logo or name on the vehicle. You have the opportunity to let other companies advertise on the side of the vehicle.

If your logistics business has a vehicle(s), you can take advantage of this option to make extra money by putting messages on the side of your vehicle. 

Here’s how it works: Contact companies that provide this service to find out which ones are compatible with your vehicle. 

Figure out where you want to place your ads. Most people put messages on one of their doors or sides of their vehicles. Make sure they have the necessary information regarding the design of your ad before proceeding.

SEE: Companies that will pay to advertise on your car

7. Ask for Business From Hotels and Restaurants

The logistics business is competitive. While it is possible to build a big scale logistics business through government projects, it involves a lot of expenses and also risks. Consequently, some logistics businesses deliver food and goods every day to hotels and restaurants to make money.

Besides, hotel transportation is becoming a hot spot for the logistics business. It means you carry food or daily things from supermarkets to hotels. Restaurants are also good places for you to make money with the logistics business.

By building relationships with local hotels and restaurants, you can create a recurring revenue stream that will allow you to take care of the rest of your business.

8. Offer Warehousing Services

Although the logistics business is a time-consuming task, it can be a rewarding one. If you have the time to spare and a good amount of money to invest, you can make your logistics business a profitable venture. 

One of the great ways to widen the reach of your business while profiting from it is by offering warehousing services. A good number of people want their products to be stored safely and secured while they continue to focus on other aspects of their businesses.  

There are many customers out there that would love to store their products in a secure environment while they continue with other aspects of their business. You can charge per day or per ton of good they intend to keep in your warehouse. This is a good way to make some money with your logistics business. 

Why Do Most Logistics Businesses Fail?

1. Incorrect and insufficiently verified business plan

The starting point for a great logistics business is a well-defined and verified business plan. Without it, you may as well start with nothing. Before starting the business it is necessary to choose the direction of development, but often this stage is missed by novice entrepreneurs. 

To make money as a logistics business owner, you should have a business plan that serves as the main document that guides your entire business. Plan the market, your competitors, the products and services you plan to offer. 

You will also faction in an advertising strategy, detailed financial projections, and short- and long-term operational needs. You will also need an overall strategic plan for your company.

SEE: Best business plan software

2. Not insuring against risk

Logistics has one of the highest failure rates of any business. Most logistics businesses fail to make money or fail generally because they are unprepared for risk. 

Insurance can be expensive, but it’s essential for the long-term survival of any business. It’s important to have a good logistics insurance broker who is familiar with the intricacies of your industry.

3. Failure to diversify the business

The logistics business is a very lucrative one. Though the market was initially saturated with some good players, the competition is steep now. The challenge for a large number of players is that they have tied down their entire business model to just delivering or moving packages around. 

To stay afloat in this highly competitive environment, it is advisable to diversify at least your logistics business so it can survive beyond shipping.  Consider these;

  • What are you good at? 
  • What services do your clients need? 
  • How can you incorporate other services?
  • What can you offer that will make your business unique? 

You need to work on different aspects of the business every day to ensure that you are not falling into any one category.

4. Not adapting to changing trends

The logistics business is very challenging. More than 50% end up failing because their owners don’t adapt to changes taking place in the market. A successful logistics business adapts to the changing market trends and the needs of its customers. 

Remember those great business ideas can fall apart very quickly if a business does not adapt to the new and emerging needs and demands of consumers and clients.

5. No clear target markets or audience

Logistics businesses need clear target markets, which is kind of hard as all logistic companies have similar sets of clients. But some companies know their niche market very well and they only focus on those clients.

For example, a logistics company servicing medical equipment can service only hospitals as their niche market. In this way, the business has no competition from other logistics firms as some may serve hospitals and others may serve industries, or factories, or even both. 

The advantage of having an exclusive niche like this is customers stick with the same sources year by year.

FAQs

Can you make money with a logistics business?

Yes, you can make money with a logistics business. You don’t have to be the next FedEx or UPS to make money with a logistics business. There are many opportunities not only to make money but to have fun doing it. Some of such opportunities are those listed in this article. 

How do logistics companies and businesses work?

Logistics companies help businesses and other organizations move products and materials to various locations. Logistics companies can handle the entire process themselves or provide clients with a full suite of tools. 

For example, a logistics company can provide clients with software to manage fleets of trucks or even make the trucks available to the client for the purchase. Or, a logistics company may specialize in shipping products overseas and offer clients access to their network of freight forwarders.

In general, logistics companies help businesses run smoothly by using technology and expertise in movement, packaging, storage, fulfillment, and transportation. 

Final Thoughts 

Logistics is the backbone of the e-commerce industry. There are thousands of businesses around the world making billions of dollars each year by delivering merchandise to customers’ homes.

Are you an entrepreneur with an interest in logistics? Have you ever wondered how to make money from your logistics business? If yes, then here’s a list of the top ways to make money with your logistics business using your creative and exciting thinking skills.

Diversification of an entrepreneur’s portfolio is crucial for success. Consequently, you are always seeking better ways to make money. You can get some ideas from this blog. 

Would you like to test the waters with small businesses? If yes, see the article on best businesses to start with less than 10k. If you will like to try out tech, see the article on the best profitable tech business ideas with low investment.

All of these ideas revolve around starting a business and making profits without investing too much. Discover more ways to make money on the blog.

Thanks for reading.