Starting a delivery business is a great way to enjoy entrepreneurship and meet a major need in the market. In fact, the size of the delivery market in the US has increased nearly 6% per year from 2018 to 2023. In 2023, industry revenue was measured at $165.1 billion—it’s a growing market with plenty of opportunity.

In this article, we explore what a delivery business is and the different types of services offered. Plus, we provide a step-by-step guide to help you start your own delivery business.

What is a delivery business? 

A delivery business is a service that transports goods to customers. These goods could be food, drinks, groceries, or even furniture or appliances. 

The delivery market has steadily grown in recent years, thanks to economic growth after the COVID-19 pandemic (and, likely, an increased desire to stay home). Consumers have also become more interested in convenience.  

Reasons to start a delivery business

Aside from the industry growth and high demand, there are plenty of reasons why starting a delivery service may be a great business opportunity.

  • Flexibility: Since delivery is always needed, you can set a schedule that promotes work/life balance.
  • Scalability: Respond to demand and grow your company by expanding your coverage area, the goods you deliver, or your fleet and team size.
  • Ease of entry: Delivery is a lower-cost option than creating a brick-and-mortar company. Plus, you can keep expenses low with delivery management software like Bringg.
  • Customer and community impact: Support the local economy with employment and local business partnerships.
  • Multiple revenue streams: Tap into different streams of income, including delivery fees, subscription models, partnerships, or packaging or warehousing services. 
  • Profitability: The low barrier to entry, high scalability, and ability to add multiple revenue streams provide a high chance of profitability. According to estimates, the net profit margin can be 15% to 20%. 

Types of delivery services

Starting a delivery service begins with understanding the most popular delivery niches:

  • Food: This includes transporting food from restaurants, cafes, or industrial kitchens. 
  • Groceries: Grocery delivery enables your customers to order groceries online and receive them at their front door. 
  • Packages: As customers frequently order products online, supporting e-commerce companies or other retailers with package delivery can be a great niche. 
  • Courier service: Deliver paperwork and filings for law firms or medical offices on a same-day or overnight timeline. 
  • Alcohol: Bring the party to your customers, whether in partnership with a local liquor retailer or independently. 
  • Specialty and on-demand: Any physical product can be delivered. You could deliver flowers, furniture, medical devices, or appliances. You can also offer on-demand delivery with a quick turnaround for urgent timelines.

How to start a delivery business 

It takes research and effort to understand how to start your own delivery business, but we’ve laid out the steps for you.

  1. Figure out your niche

The first step to running a delivery business is determining your niche. Start by researching the different market segments and identifying your target audience. 

For example, do you want to focus on popular goods like food and alcohol, the demand for which can fluctuate based on the economy? Or would you rather deliver necessities like medical supplies, which may not have such high demand? 

  1. Build a business plan and structure

Any strong enterprise needs a business plan to provide structure and keep it running smoothly. 

Consider factors like startup costs, budget, pricing, employee numbers, software and system requirements, and goals for profit and revenue. You’ll also need to identify your competition and ways to differentiate yourself. 

Also, decide whether to set your business up as a corporation, an LLC, or other entity. 

  1. Sort out the government details

While these aren’t the most exciting aspects of running a business, you need to sort out your legal obligations. Start by obtaining an employer identification number (EIN). 

Next, apply for any applicable local, state, or federal permits and licenses. The US Small Business Association provides guidance on regulations and licensing requirements. 

  1. Set up your finances

Open a business bank account to keep business and personal expenses separate. You may also want to sign up for a business credit card. Your local banking institution can guide you toward the best options. 

Figure out how you’ll handle accounting. You can hire an accountant or use software to do it yourself, but either way, it’s important to track all income and expenses.

Don’t forget taxes—you should understand what tax you must charge (think: sales tax) as well as the taxes you’ll be responsible for paying. We highly recommend speaking with an accountant.  

  1. Get insured

Protect yourself and your business with the right insurance. 

Some of the most common business insurance options include general liability insurance and workers’ compensation insurance. You’ll also need insurance on any vehicles you have in your fleet.

  1. Procure necessary equipment

You’ll need to gather equipment to fulfill your delivery jobs. If you plan to manage your own fleet, you’ll need vehicles. You may also want to invest in navigation systems, whether that’s in-car GPS or providing smartphones to your drivers (this also enables communication and tracking). 

For large deliveries, you’ll need a dolly or hand truck. You should also consider what sort of packaging you may require if you’ll be packaging goods yourself. Additionally, be sure you have a designated location to store any goods in your possession. 

  1. Brand and market your business to attract clients

Your brand is the first impression you’ll make. A comprehensive brand kit will include a logo, colors, “voice,” and customer commitments. 

Once your brand is set, use it to market your business. Create a website with your business details, then increase its visibility with relevant blog posts. Reach out to local businesses to build partnerships, and don’t forget the power of social media. 

  1. Leverage delivery management software 

When looking at how to start a delivery service, one of the most important aspects is using a delivery management software platform. There are plenty of benefits:

  • Route optimization: A great delivery management platform optimizes delivery routes based on numerous factors including traffic patterns, the location of other deliveries, and driver or vehicle capacity.
  • Tracking capabilities: Stay informed of the location of drivers and deliveries at all times and provide accurate delivery estimates to customers by using a delivery management system with tracking abilities.
  • Driver dispatching: Save money on hiring dispatchers and let the system work for you. Based on information like proximity, driver availability, and capacity, delivery systems can dispatch drivers automatically. 
  • Customer communication: Keep customers informed from order to delivery with real-time notifications, delivery updates, and returns management. 
  • Gain valuable insights: Software that includes data analytics, like Bringg, can provide you with insight into key metrics such as customer satisfaction, delivery performance, and overall cost and efficiency. 
  • Optimize with technology: Using delivery management software lets you make the most of delivery technology to automate, simplify, and enhance the experience for your customers, drivers, and partners. 

Conclusion

The delivery service industry continues to grow, providing an excellent opportunity for starting your own delivery business.

Getting started requires understanding your niche; setting up a business plan; sorting out all legalities, insurance, and finances; attracting clients; and procuring all necessary equipment, including—importantly—the right delivery management software.