4 Essential Steps to Starting a Profitable Courier Business

Is it worthwhile to start a local courier business in 2025? Yes! Globally and in the United States, the market for courier delivery services is still booming. Consider these numbers:

• Worldwide, the courier, express, and parcel market is projected to grow at a compound annual growth rate (CAGR) of 10.6% from 2024 to 2030. 
• Fedex posted revenues of over $60bn in 2024, with a profit margin of 7.9%.
• Together, UPS and Fedex account for about 70% of the US courier industry — leaving plenty of room for smaller local players. 

The opportunity for local courier services

The shift to home delivery has become a permanent feature of people’s lives — but for many customers, there’s a lot of frustration. The big courier businesses are overwhelmed, their customer service is terrible, and their delivery times are becoming more unreliable.

That translates into a big opportunity for smaller couriers. They understand their local markets, and they can spot niche opportunities the big players miss. For example:

• Small businesses need an easy and affordable way to deliver their products around town. 
• Customers want reliable, predictable deliveries at a time they choose. 

How can you tap into this market and be the courier service provider local businesses need? Starting a profitable courier company can be quick and lucrative — if you know where to begin, how to set up the right courier software and how to scale.

This article will help you build out your business plan for your delivery company startup. There are several different types of courier company, so we’ll start with choosing the right vehicle mix and service model. 

Here are the four essential steps to start a successful courier business:

1. Choose your delivery vehicles

Your choice of delivery vehicle will determine your operational capacity, service area, and initial startup costs. There are three main options:

a. Van/truck deliveries

Larger vehicles help you achieve economies of scale. With a cargo van or pickup truck, you can:

• Serve a wider geographic area
• Increase your potential customer base
• Transport hundreds of orders at once instead of just a few packages
• Lower your cost per delivery significantly

With a lower cost per delivery, you can choose to pass the savings on to customers to win market share from competitors. Alternatively, you can increase profitability — or do a little bit of both! 

This is often the best place to start for quick launch and quicker profits. It presents a lucrative opportunity to be the reliable community courier that small businesses need.

a. Bike or motorbike courier

Bikes and motorbikes have lower startup and operational costs, and they’re environmentally friendly. They’re a good choice in dense urban areas with heavy traffic, especially for time-sensitive deliveries.

 But there are limitations:

• Restricted package size
• Fewer packages per trip than a van
• Smaller service area
• Weather dependencies

All in all, it can be more challenging to scale a bike-based business than a van-based business. 

But a lot depends on your location! For example, Bowlz in Zurich uses bikes to make hundreds of deliveries every day. In a city with good cycling infrastructure, this can be your best bet.

c. Electric vehicles

With growing environmental awareness and rising fuel costs, electric vehicles offer compelling advantages:

• Lower vehicle maintenance and operational costs over the long term – up to 40% lower than internal combustion engine (ICE) vehicles!
• Positive brand image
• Access to low-emission zones in cities
• Tax incentives in many regions
• Quieter operations for residential areas

The initial costs of an all-electric fleet may be higher, but the long-term savings and marketing benefits can make this a smart investment.

It may also be a way to future-proof your business, with more and more customers likely to ask for zero emissions in their deliveries.

Routific customer Fresh Prep, for example, has begun transforming its fleet to use electric delivery vans.

2. Decide on your business model

You generally don’t start a courier business just for “the good of the community”. You want it to be profitable, whether it’s your side-hustle or full-time job — and if you set your business up with that goal in mind, a courier business can definitely be profitable. 

Your courier business model has a huge impact on the general viability of your business plan. There are six main service models to choose from, with each having different profit potential and operational requirements:

a. Same-day home deliveries

Speed is often an important factor for your target market. However, hyper-quick on-demand delivery services — such as one-hour or two-hour pickup and delivery service — can be extremely costly and hard to manage.

So the important thing to note here is that same-day delivery is not the same thing as on-demand delivery. You can do a batch round of pickups in the morning, bring the packages to a central sortation centre, then go out and do your deliveries in the afternoon or evening.

Among hundreds of courier companies we’ve seen at Routific, this model has proven to be scalable and profitable. One of the main reasons is that you can really leverage route optimization and efficient route planning to create dense routes, thereby reducing your cost per delivery significantly.

b. Next-day home deliveries

Offering next-day deliveries can be even more profitable than same-day deliveries, for several reasons:

• You have more time to batch orders
• There are better route optimization opportunities
• You may be able to handle 100+ deliveries per driver per day
• Higher route density leads to higher margins
• Lower operational stress

c. Business-to-business deliveries

This is a more niche and specialized business model, but it has higher margin potential.

Some examples of B2B delivery services include:

• Caterers delivering office lunches
• Vendors delivering supplies
• Corporate document delivery 
• Remote worker equipment delivery

For sensitive documents or perishable goods, speed becomes more important. A courier company that offers on-demand pickup and delivery of sensitive documents can set higher prices. But remember that premium prices lead to higher service expectations, so your delivery service level needs to be excellent.

d. Special delivery services

Does your community need a special delivery service? Some types of deliveries need extra care or specialized equipment:

• Medical supplies and equipment
• Hazardous materials
• Temperature-controlled items
• Legal documents
• High-value items

Offering a unique service your customers can’t get from other courier companies can command higher pricing — medical couriers are a good example. 

But it can also involve higher costs, for example:

• Specialized equipment
• Increased insurance coverage, including liability insurance
• Strict regulatory compliance
• Enhanced security measures
• Specialized training requirements

The bottom line? A specialist delivery business can be highly profitable, but you will need to ensure you have the right target market. Doing your market research is always important, but in this case it’s extra critical. 

e. Hybrid courier business models

You can mix-and-match any of the above business models and courier service offerings. For example you could:

• Combine home and business deliveries. 
• Offer mainly next-day deliveries, but occasionally add in same-day or even on-demand pickup and delivery services. 
• Add specialised services to regular delivery routes. 

This is all possible, and your target market will appreciate the flexibility. 

But it also adds a lot of operational overhead and makes your business model more complex. Your marketing strategy will be all over the place as well.

If you’re thinking of a starting a new courier business and want to grow a hybrid model, we recommend:

• Starting with one focused target market
• Adding services gradually as you grow
• Keeping your marketing message clear and consistent

f. Become an Amazon Delivery Service Partner

This model is a bit different from all the others, but it’s a business idea worth considering alongside the other types of courier services. 

Amazon has its own franchise-like Delivery Service Partner program that offers a path to owning your own business, with all the backing and support of one of the biggest companies on the planet.

But as with a franchise, going the Amazon DSP route means giving up a lot of control over your business — you will have to use Amazon's tools, and follow Amazon's rules.

If this is an option that appeals to you, read our separate article on how to become an Amazon Delivery Service Partner.

3. Getting your courier business startup off the ground

Before diving into marketing and operations, you'll need to handle some basic business administration. This includes things like:

• Choosing a business name
• Choosing your legal structure and business structure, whether a limited liability company (LLC) or sole proprietorship
• Getting appropriate business insurance coverage
• Getting any required licenses or permits, like a business license 

In the US, the Small Business Administration offers excellent guidance on these steps for new business owners. Elsewhere, use your local public library or chamber of commerce to find the best resources.

You'll also need to figure out your pricing structure. Setting delivery pricing that covers your costs while staying competitive requires careful planning. Check out our detailed guide on how much to charge for delivery.

Once you have those foundations in place, including a solid business plan with a differentiated delivery service offering, you have most of the ingredients ready to launch. Let's focus on the tactics to get your first clients.

a. Create an SEO optimized website

This is how people will likely book your services. Work with an SEO or marketing agency to make sure your marketing strategy is thought through, and build your website with this in mind. Optimize the content and SEO for your local market that you start in.

Invest in good design, because that’s how your target market will judge you. Make it as easy as possible for them to become your customer. Have a website where customers can make instant bookings. It should be e-commerce enabled so they can also pay for your services and track their deliveries.

b. Have a solid backend system

Make sure you have a good courier dispatch system in place. Setting up the processes and systems on day one will save you a lot of headaches in the future.

c. Be active on social media

Choose a couple of social media accounts to regularly post to and interact within. LinkedIn is a good one to start with. People will get a sense of your values and brand through your social media presence. It can also become a captive audience, which you can sell to later.

This will help you get brand recognition and can also help you rank higher on Google.

d. Provide great customer service

Stand out from the competition by providing stellar customer service. Have a phone number people can call, deliver packages on-time, and be as friendly and helpful as you can. The little things go a long way to get referrals and grow your customer base.

New customers will judge you from your first delivery. So make it count. Send the proof of delivery, show them real-time updates on the status and progress, even reporting on success-rates or on-time deliveries can give you customers peace of mind.

e. Use automatic delivery notifications

People want to get real-time updates on their deliveries. Instead of sending an email notification (which will just get lost in people’s inboxes), a text message can be much more effective. 77% of consumers have had a more positive perception of businesses who text them their order information.

When you make your current customers happy, they will tell others about you and the referrals for your business will grow. They say “Word-of-mouth advertising works” for a reason.

f. Build a strong brand

Create a brand that your target customers can relate to, and that you can uphold. This will build trust and portray you in a professional light.

To start, get a logo and brand colours. This will be the basis for everything you create for your business and help all your website, marketing, and sales materials look consistent. Consistency is professional and your customers want a trustworthy, professional brand to deliver their precious packages.

Reach out to a local designer to help you put together a branding package for you. The more professional you look, the more customers you can attract.

4. How to maximize your profit as a courier

No matter which business model you choose, here are some ways to be more mindful of your costs so you can increase your profit potential:

• Create service areas: Optimize your service areas so drivers can travel less but deliver more. If you want to serve a larger area, consider breaking it into smaller geographical regions and assign one truck to each area
• Optimize your delivery routes: Use route optimization to optimize your pick-ups and deliveries and courier dispatch software to manage your deliveries. This will help you deliver products faster and save you gas costs from zig-zagging inefficiently around town.
• Use technology to scale: The more you rely on human processes, the more things can go wrong, and the more it costs to run your courier service business. All your drivers should have mobile phones equipped with mobile apps to do their deliveries. You can then track the progress using live GPS tracking. So when your retailers call you about an order, you know exactly where it is and what the ETA of delivery is. And when you deliver, you can send a proof of delivery to both the retailer as well as the recipient.

Courier business success stories

It’s entirely possible to start getting 50-100 or more deliveries a day in your first month if you do it right. We talked to one local entrepreneur who started his business in March 2020, just as people were starting to work from home more. He optimized the three core elements above and received 200 orders on his first day of business! He spent about a week setting up his business.  

It can happen that fast when you do it right and the market needs you.

Now is a great time to start your own courier business, bo your own boss, and become another success story. It’s possible to get started in as little as a week and have a hugely successful launch.

With the right plan and courier management system to support you, an online courier business can turn into full-time profitability.

You can read more success stories here.