With the explosive popularity of delivery services in the recent decade or so, this has become a big growth industry with many revenue-generating niches. Statista forecasts that global e-commerce sales in the retail sector could exceed $4.3 trillion in 2025. This will create a surge in demand for delivery services, making it a great time to think about starting your own business. SIXT offers flexible, low-risk solutions for startups. Here's how to start a delivery service with our support.
How to start a delivery service business
No matter what industry you're targeting, there are a few basic preparatory steps. These will help you identify your target market more accurately, create a blueprint for your business operation, and provide a clear outline of the initial costs.
- Step 1) Choose your niche: Choose a specific niche in which to provide your delivery services. Do some market research and find smaller niches that are underserved. This is where you'll find hidden demand that you can fulfill. It could be anything from local food delivery to transporting small courier packages across town for medical companies, legal firms, and so forth. You could specialize in making deliveries between major cities and small rural towns. All you need to do is identify an area where demand outstrips supply.
- Step 2) Create a business plan to turn your dream into reality: a business idea needs a concrete plan. It not only defines how you start a delivery service; it also outlines exactly what your company's activities will be and how you will organize them and allocate resources. Ask yourself questions like, "What prices should I charge?", "What can I offer that competitors aren't?", and "How will I source my vehicles and drivers?" Your business plan serves as the blueprint for business objectives, operations, and overall strategy.
- Step 3) Get a clear idea of your startup costs: it's critical to get as accurate and realistic a view of your initial costs as possible. This will depend on the scope of your operations, the area you intend to cover, what kind of vehicles you need, and how to get them. There will also be business licenses and delivery permits, along with administrative fees to establish a legal business. We'll provide a more detailed breakdown below.
Building your delivery fleet
If you're starting a courier business, you'll have to invest in at least one or two vehicles. It depends on the demand for deliveries in the niche you've chosen and what you can afford. Here's a comparison of the available options. You can see that renting is the best choice for creating a delivery fleet without taking on too much risk:
| Buying | Leasing | Renting | |
|---|---|---|---|
Upfront costs | Medium | Low | Low |
Monthly costs | Constant, but includes interest | Fixed, predictable payments | Varies according to usage |
Cash flow effect | Significant initial outlay | Lower impact than buying | Best way to preserve startup cash flow |
Maintenance | You bear all costs | Usually only partially covered | Included in rental price |
Scalability | Slower to scale quickly | Easier, but subject to leases | High scalability—rent extra vehicles whenever you need to |
Flexibility | Low, depends on CAPEX | Medium, although locked into lease term | Change the type of vehicles you need quickly and easily |
Ownership | Outright | Vehicle returned after lease period | No ownership hassles |
When you rent delivery vehicles with SIXT you get reliable quality with comparatively low financial commitment. Maintenance is included in the price, and you can easily add or remove vehicles from your business fleet as needed. You can increase your vehicle rentals at peak seasons and scale back during quieter times. This avoids having to pay constant overheads on vehicles you're not using, as would be the case if you bought them or signed a leasing contract.
If you're not exactly sure of how, you can also run proof-of-concept tests on your business plan by renting one or two vehicles to start with and monitoring demand and income vs. costs. You'll also have the benefit of our online booking and management tools. Adding a new vehicle is fast and easy—you can have it operating within just a few hours.
How to start a pickup and delivery service: initial costs
Besides the legal permits, business licenses, and administrative costs, you can also expect a range of other startup costs, depending on your plan. These can include:
- Market research expenses to define your operating niche and offerings
- Insurance, including liability insurance
- Marketing and advertising expenses
- Creating an online presence (a promotional website or booking platform)
- Costs of running a launch campaign
- Wages for any staff you need to hire
- Office space rental if applicable
- Packaging materials you'll need to stock
How to start a delivery service that scales successfully
Start by renting a single vehicle to prove that there is enough demand to make it worthwhile. Try to secure one or two cornerstone clients that you can build on. Make sure to track things like costs per delivery and profit margins. Once you've established a dependable revenue stream with repeat customers, you can think about adding more vehicles and expanding your services.
Establish some fixed routes rather than ad hoc deliveries. Step back a bit from operations at this point, with the aim of allowing the business to run without your constant direct intervention. Keep adding vehicles and drivers organically as more opportunities arise, aiming to reach predictable per-vehicle profits. As you grow, it's a good idea to install software for fleet management, logistics, and financial analysis. With SIXT you can scale your fleet with low risk.
Our client use cases show that offering different types of flexible car rental rather than rigid leasing programs provides them with access to a wide range of vehicles to suit their immediate needs, all through a single centralized account. Our clients can swap out vehicles as they need. Our flexible rental periods—from a single day to long-term rentals—help keep cash flow balanced and allow them to tightly tie costs to revenue. Based on their feedback, we can clearly see that our rental plans provide the best cost-benefit ratios for startups. We also offer hybrid vehicles and EVs to help startups support sustainability (ESG) goals from the get-go. Register as a SIXT business client and get your delivery service off the ground quickly and cost-effectively.
FAQs
Start small and grow organically. This might mean making all the deliveries yourself at the beginning, renting a single vehicle from SIXT. Be patient and let the demand dictate your growth.
Starting a delivery business costs a few thousand dollars in initial investment, covering basics like admin, marketing, and vehicle rental.
If you're planning how to start a courier delivery service, the best option as a startup is to rent your vehicles. Speak to SIXT for excellent flexibility and cost-efficiency.
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