How to start a delivery business

Delivering parcels is an easy way to work for yourself. However, dealing with the financial, legal and practical aspects of starting a delivery business can be hard. In this guide we break down everything you need to consider before launching your delivery business.

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What skills, knowledge or requirements do I need to start a delivery business?

You do not need any formal qualifications to start a delivery business in Australia. However, you should be a confident driver who can navigate all road, weather and traffic conditions.

Before you take on any work you should have a foolproof business plan and an idea of how you are going to market your business.

What courses or qualifications do I need to complete?

You obviously need a driver's licence to open a delivery business. The type of licence you need depends on how large your business vehicle is.

You only need a C class driver's licence if you are delivering small packages in an SUV or van. However, if you are planning to deliver large items in a truck, you will need a light rigid (LR class) or medium rigid (MR class) licence.

Truck driving lessons are the most efficient way of getting a licence. They typically cost:

• Light rigid (LR) lessons: $90 - $100 per hour
• Medium rigid (MR) lessons: $110 per hour

Both of these licences require you to pass a practical driving assessment in a LR or MR class vehicle.

Practical driving assessment fees:

• LR or MR class application fee including one practical driving assessment: $109
• Practical driving assessment resits: $93.40

Equipment and software needed to start a delivery business

You can start a delivery business with a minimum of equipment. You will need:

• A delivery vehicle
• A hand truck/trolley
• Ratchet straps
• Moving blankets to pad and protect items
• A tarp to protect deliveries in the rain

If you want to keep up with competitors you may need to invest in delivery management software that optimises logistics tasks. Put simply, this software:

• Plans the most efficient driving route, letting you deliver more items and make a heftier profit.
• Lets you monitor driver movements and road behaviour so you know that everyone employed by you is doing the right thing.
• Frees you up from manually planning all of the above, letting you concentrate on customer satisfaction and improving your business.

You might also need accounting software to help you with invoicing, budgeting and keeping track of payroll and inventory.

What business structures do I need to consider before starting a delivery business?

It is important to know how to structure your business. Many delivery drivers are sole traders and work independently. They deliver parcels for their own business or subcontract to other companies. If you launch a delivery business with someone else you qualify as a partnership.

You will also need to apply for an Australian business number (ABN) to be able to invoice customers.

Insurance is essential in the delivery business. Your delivery vehicle needs to be covered for business use and you will also need public liability insurance; this protects you in the event that someone is injured or killed - or if third party property gets damaged.

Do I need any legal documents written up before I start operating? What about online legal services?

Having a few legal documents in place before you launch your business ensures things will run smoothly:

• If you are starting a delivery business with someone else then having all parties sign a partnership agreement gives everyone equal control and responsibility over the business.
• A business plan gives you direction when launching your delivery business.
• If you have employees using your work vehicle, a smoking policy will ensure everyone knows where and when they can smoke.

If you haven't started a business before getting expert advice from a lawyer is a good idea. This way you start off your venture with the right business structure, tax information and necessary insurance.

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How do I build up my customer base?

Online marketplaces are a great way to boost your customer base and secure work early on. They give you a streamlined way of sourcing jobs from clients.

Popular platforms include:

• hipages. Australia's largest home improvement directory. Most delivery jobs on this site revolve around furniture transportation.
• Airtasker. Gives you access to customers looking for skilled people to outsource tasks to. This platform has an entire category dedicated to delivery.
• Oneflare. Matches you with local customers who want quotes for jobs.

Business directories also let you list your services and respond to delivery job ads. Top directories include Gumtree, True Local, White Pages and Yellow Pages.

You should also use a range of marketing tools and platforms to reach as many potential customers as possible.

How much should I charge my customers?

Most delivery businesses calculate their charges based on:

• Shipping distance
• Measurements (how much space the package will take up)
• Weight
• Peak season
• Delivery due date
• Sign on delivery and package tracking

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If people are using your delivery services to ship urgent items, documents or packages then the average cost can amount to:

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Frequently asked questions

How do delivery companies make money?

Delivery companies make their money by charging a fee for each package they deliver. The potential to make good money relies on delivery volume. A company needs to deliver enough packages to cover their expenditure and make profit.

How many hours do couriers work?

Delivery work is flexible. Owning your own business means that you can set your hours and take on as much or as little work as you like.

Is a delivery business stable?

Coronavirus concerns have seen the demand for delivery services skyrocket, so it is one of few businesses that have grown during the pandemic. Currently, the delivery sector is worth $4.2 billion annually, so there is always work available.