The article is written jointly with our experts and with their active participation. This allowed us to obtain detailed, more complete information at first hand about the opening of courier service.
Have you heard of FedEx, DHL, UPS? If so, then, for sure, you or your friends used their services. Would you like to open your own courier service?
If yes, then this article will be useful for you and will tell you how to do it.
Especially for the preparation of the article, we interviewed three experts and found out how to open a courier delivery service. Meet our guests:
- Alexey Prygin, Deputy General Director MaxiPost. The company specializes in courier delivery of goods from online stores.
- Sergey Nevzorov, the founder of the service Department of Logistics.
- Jurabek Turdiyev, director of courier service BTS Express. Specialization of the company is express delivery of documents, correspondence, parcels up to 3 kg inside Uzbekistan.
How to prepare for the opening?
As with the opening of any business, it is necessary to conduct a preliminary market analysis. The information received should concern:
- Target audience, demand from her side. Who is your potential client, what services he needs, what he will expect from you.
- Information about competitors and their activities.
- Current market conditions. What niches are still relatively free and other information.
This is the first. The second is the choice of the niche and the services provided. After studying the market, you may want to develop courier service in some narrow specific niche. Or you prefer specialization in the delivery of certain parcels, for example, goods from online stores, food from restaurants.
Investment size
Everything depends on the chosen niche and the services that you are going to provide. Alexey Prygin, Deputy General Director MaxiPost:
«Costs (starting and monthly) are made up of the following costs:
- personnel recruiting;
- purchase and branding of uniforms (if necessary);
- automation of processes;
- purchase of cash registers (and their further maintenance);
- purchase or rent of vehicles (if necessary);
- communication (mobile, city, Internet);
- household and office goods;
- bank charges (mainly, collection);
- fuel (if necessary);
- salaries and taxes.
The main expense in the «courier» – it’s salaries and taxes.
Competitive struggle in the market of courier services is now off scale and will only grow further, opening a new business in this area is worthwhile if you have a good starting investment, a «pillow» for the future and experience in this area. »
MaxiPost has the following format – delivery of goods from online stores. If you do not buy vehicles, then the investments will be relatively small. But! You need to be prepared for subsequent financial injections to stay on the market and continue to grow.
But BTS Express required a significant investment to launch and develop its courier service.
To start the courier service of our format, we will need at least $ 150,000 (about 10,000,000 million rubles). The main expense is the purchase of vehicles (up to 70% of costs). In our case, these are 4 Lada Largus cars for intercity transportation and 4 Damas cars for transportation in Tashkent and the region. In the other 11 cities we hire couriers with our own cars.
The remaining amount falls on:
- rent, repair of premises, their equipment, computer equipment, a special program of accounting and control,
- salaries and taxes,
- advertising and marketing,
- air transportation services,
- and other small expenses,
If you choose narrow niches, for example, delivery of food or delivery of invoices of companies inside the city, then investments will be required an order of magnitude less.
As can be seen from the two examples, the volume of investment can differ by several times. Much depends on the niche and the services provided. But both our guests agree that for the continued existence and growth of the company will require regular funding.
Step-by-step instruction
As mentioned above, the opening of courier service begins with the definition of the client’s portrait, his needs, expectations. Based on these data, you need to determine the niche and a specific list of services that will be provided by your company.
After finding out these key points, you can think about what investments will go to, how to build a business, what geography of services you will have.
Staff. Hiring, training, motivation, relationships
About work with the staff our guest Alexey Prygin, the deputy general director tells Maksipost:
The staff of couriers is one of the first steps in the organization of courier service. To form it, you need:
• Dial couriers, pre-calculating their number and loading based on the planned sales volume and sales schedule;
• Train couriers by developing a training system in advance, including the ability to communicate, work with cash machines, comply with the rules of cash discipline, etc .;
• Develop a system of motivation and control of couriers: how do you pay them – fixed or piece-rate? How to calculate the premium part – based on the number of repurchased or delivered parcels? How will you control their work and negate the risks of unscrupulous performers, which is especially important given that the courier is a materially responsible person?
The motivation system for couriers needs to be built on the basis of the company’s business goals. For example, in our company in the first place is not the quantity, but the quality of delivery, the percentage of redemption of delivered parcels. So everything is sharpened exclusively on this KP
When working with personnel, the focus and effort should be directed to couriers, because, courier:
- The face of the company, and he mostly communicates with customers and recipients of parcels.
- It depends to a large extent on how and in what condition the parcel will be delivered.
- The courier is a person who is financially responsible.
When selecting couriers, we look at the following points:
- Filling out the form. To the end it is filled. If so, this indicates a serious attitude to the candidate’s case and that he wants to work in our company.
- Ability to communicate. Is it easy for a person to get in touch, not aggressive and not rude.
- Age and availability of driver’s license. In our company couriers work only young people.
Month we have a probationary period. During this period, we draw attention to other indicators of couriers:
- How does the courier work? Whether all and in time is filled? Are the reports timely delivered?
- Compliance with the schedules provided.
- Ability to communicate with customers and recipients of parcels.
- Feedback from customers and employees. If the courier is rude, breaks the rules, clients and employees complain about him, then such a person does not stay with us.
We also have a system of training and adaptation. It allows the newcomer to quickly join the business and successfully perform their tasks.
A separate conversation is motivation. We need purposeful people, and we are promoting them to higher positions, if, of course, there is an aspiration of the employee.
The basic principle of building relationships with couriers, and with all employees of the company is to make them understand that they are valuable and that their work is important not only for the company, but also for customers and society. And most importantly – do not just let it be understood, and day after day prove it in practice.
How to build advertising and marketing?
At the initial stage it is better to concentrate on attracting and high-quality servicing of the N-th number of the first clients. I would recommend starting with 200 customers. Such approach will allow:
- identify weaknesses in your business and eliminate them,
- understand the expectations and needs of their customers,
- on the basis of feedback received, build further their marketing strategy.
Channels for promotion can be different. You need to take into account the specifics of your niche and focus on customers.
Says Jurabek Turdiyev, director of BTS Express:
In our case, SEO works well, dispatch of commercial offers on organizations, word of mouth. We mainly use social networks to collect feedback.
In the choice of the promotion channel, one must start from the characteristics of the clients. Namely, to know:
- Through which channels of communication they can be reached.
- Through what channels are already looking for information about you potential customers.
A place
The niche and the services provided by your courier service play a major role in deciding whether to choose a location for the office and warehouse.
For example, delivery of food from restaurants does not require the presence of a warehouse, because the parcel is delivered straight from the kitchen to the recipient. A similar situation when delivering parcels inside the city, because Delivery is carried out within a few hours.
But in the case of intercity delivery, the availability of a warehouse is mandatory.
When choosing a place, we took into account the following criteria:
- Convenient location for clients, tk. some of our customers come to the office to send the parcel. Also part of the recipients takes the parcel from the office. This is an economy-tariff with self-export from our offices. The main thing is that it’s easy for customers to drive up to us, it’s easy to find us, and to have parking.
- The proximity of the airport, t. parcels to distant cities to increase the speed of delivery, we ship by air.
Sufficient space for all departments (reception, storage, administration). This applies only to the central office in Tashkent. Offices in the regions are simpler
Documentation
Courier service can be issued as an LLC or IP. LLC is convenient with the following:
- Investors are more likely to invest money in business, because can act as co-founders. Banks are also more willing to issue loans.
- More trust from organizations. It matters if organizations are your potential customers.
The IP has the following advantages:
- Easy to register.
- You can pay taxes on «simplified». Tax reporting is simpler.
Choosing an organizational and legal form at the discretion of the business owner. Registration of the company is one of the simplest stages when opening a courier service.
Check-list of opening
- Market analysis (demand, competition, current situation).
- Selection of niches and services provided.
- Search and selection of premises.
- Conclusion of the lease agreement.
- Company registration, tax registration.
- Receiving investments.
- Search for equipment suppliers, furniture, transport (if necessary).
- Drawing up an estimate of repair and finishing works.
- Search for construction brigade, repair and finishing work.
- The order of equipment, furniture.
- Installation and adjustment of equipment, furniture.
- Purchase of transport (if necessary).
- Development of an advertising campaign for opening and attracting the first clients.
- Search, selection, primary education, adaptation of employees (couriers, back-office employees, receptionists).
- Scheduling shifts.
- Festive opening.
- Attraction of the first clients.
Is it profitable to open
To answer this question, you need to consider the following:
- Courier service as a business is a long-term business project. Here it does not work out quickly «to make money.» Like factories, courier services do not give a return immediately, but after a while. Starting a courier business, you need to be ready for a marathon, and not for a sprint race.
- Much depends on the chosen niche and the services provided, the situation on the market.
Alexey Prygin, Deputy General Director MaxiPost:
Services in general are rarely a high-margin business, and with an unfavorable scenario (and now just this), the difference between the tariff and the cost of production tends to zero. To increase this gap is very difficult: raising the price means losing customers, and reducing the cost is very difficult.
We were able to reach operating profit only for the fifth year of development. Until full self-sufficiency, there is still time. The money we invest is in development. Courier services are a long-running business. You need to have a lot of patience to raise such an enterprise.
Seasonality
As in a number of industries there is a seasonality in the courier business. It is connected with the period of commercial activity of the population before the celebrated holidays and other events:
- New Year
- February 23
- March 8
- Black Friday, etc.
The courier business is prone to seasonality, which directly depends on the surge in sales in online stores. The hottest season for courier services is the New Year. Even if you have been interrupting the order for an entire year, you will not be bored from the end of November. Our people will never stop buying gifts for this holiday, so there is always a chance to make a good turn in one month. December is guaranteed earnings. And there are also February 23, March 8, Black Fridays, cyber Monday, preparations for the school in August, and a bunch of all kinds of more or less successful seasons and sales that provide couriers with a reliable income.
Jurabek Turdiyev, director of BTS Express:
Seasonal fluctuations in our business, too, is. Most of the shipments are observed in December-January. The end of summer – the beginning of autumn is also quite an active period – people come back from holidays, a new academic year begins. In summer, demand falls slightly, at the rest of the day everything is relatively stable.
Risk factors
In the courier business there are several main risk factors:
- Loss, damage to the parcel or money.
- The risk associated with the widespread dumping of prices for courier services.
- Risk associated with regional contractors.
- Risks associated with inefficient logistics.
- «Weak» software tools for accounting and control of the work of couriers, warehouse.
When implementing the web service «Department of Logistics» we see typical errors in the organization and control of the business process:
- Logists make decisions based on their intuition and experience. At the same time, the requirements that are not related to business are placed in the forefront. For example: the choice of a car for delivery based on the proximity of the driver’s residence to the detriment of the fullness of the body and the optimality of the route. Or decision making on the principle of «convenient» / «inconvenient»
- Lack of control of couriers on the route. As a result, management receives information about the deviations already in the form of claims from customers.
It should be clearly understood that the courier business does not work with packages, but with people – everything is «tied» to the human factor, and from both sides – to customers and their own couriers. And working with people is always difficult.
Another area of constant attention is IT, with the expansion of new services, the opening of new branches, the emergence of new customers, it must be constantly increased and improved. From the very beginning, you need to provide yourself with reliable IT logistics. None of the business processes will work without the right software. This is possible only in the case of minimum volumes. If sales volumes are planned to be large, you can not do without investing in upgrading or purchasing a new IT system.
