Shipping Business

How Profitable Is A Shipping Business? (Updated for 2024)

Pat Walls

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Updated: October 5th, 2024

How Profitable Is A Shipping Business? (Updated for 2024)

So you want to start a shipping business?

And the first question that came to your mind was, “well, are shipping businesses actually profitable?”

Especially considering:

You could start a shipping business with as low as $10,000
Based on our data, shipping businesses generate an average of $12.5M per year

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a shipping business.

Let’s dive in!

Is a shipping business profitable?

Yes, a shipping business is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $12.5M per year with an estimated gross margin of 85%, you could expect to recover your investment within 6 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your shipping business.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your shipping business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a shipping business worth it?

If you’re wondering if a shipping business is worth it, the answer is a big YES. With shipping businesses, you have the potential to earn $12.5M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a shipping business to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful shipping businesses case studies.

Examples Of Profitable Shipping Businesses

Here are a few examples of profitable shipping businesses, and a few more details about them:

1. ShipHero ($28.8M/year)

Nicholas Daniel-Richards and Aaron Rubin founded ShipHero in 2013 after experiencing frustrations with legacy warehousing software. They saw a market for a more accessible solution that could work on iPhones or tablets, offering features like order management and integration with e-commerce channels. Since then, ShipHero has grown to bootstrapped revenues of $30 million annually, processing over $5 billion of e-commerce gross merchandise volume annually.

Is it profitable? Yes
How much money it makes: $28.8M/year

How We Started A $30M/Year Warehouse Management Software And Outsourced Ecommerce Fulfillment Business

ShipHero co-founders built their successful e-commerce fulfillment business, offering warehouse management software and outsourced eCommerce fulfillment, growing revenues from zero to $30 million annually, processing over $5 billion of e-commerce gross merchandise volume (GMV) annually while only having received $435,000 in outside capital investment.

Read this case study

Read by 9,387 founders

2. Velocity International Group ($1.8M/year)

Ben Elizer, the founder of Velocity International Group, came up with the idea for his logistics company after working at another logistics company for almost five years. He wanted more responsibility and growth opportunities, so he decided to start his own company using the knowledge he had acquired. Despite facing financial difficulties and having to move back in with his mom, Ben put everything he had into Velocity and it has since grown into a successful business, with revenue increasing by over 300% in the past two years.

Is it profitable? Yes
How much money it makes: $1.8M/year

How I Started A $100K/Month Logistics And Delivery Service Company

How a logistics company grew its revenue over 300% in 2 years, starting with just 2 vans and 25k+ square feet of warehouse space, and focused on relationships, efficiency, and building trust with its customers.

Read this case study

Read by 12,914 founders

3. Easy Auto Ship ($18M/year)

Eric Ray, CEO and Founder of Easy Auto Ship, came up with the idea for his vehicle shipping brokerage after experiencing a frustrating and inconsistent car shipping process. Recognizing the growing demand for car shipping services, particularly with the rise of online car purchases, Ray saw an opportunity to create a better pricing system and started his own brokerage. Through hard work and the development of an instant pricing technology called TAQ, Ray was able to build a successful business, boasting an average of $250,000 a month in brokerage fees and a net profit of $100,000 a month.

Is it profitable? Yes
How much money it makes: $18M/year
How much did it cost to start: $20K

How I Started A $18M/Year Vehicle Shipping Brokerage Business

Eric Ray founded Easy Auto Ship LLC, a vehicle shipping brokerage, generating $250,000/month in brokerage fees with a net profit of $100,000/month and averaging over 1,500 Google reviews with a 4.6 rating, expected to earn $18 million/year in total sales, expanding into B2B with two more divisions.

Read this case study

Read by 10,402 founders

Learn more about starting a shipping business:

Where to start?

-> How much does it cost to start a shipping business?
-> Pros and cons of a shipping business

Need inspiration?

-> Other shipping business success stories
-> Marketing ideas for a shipping business

Other resources

-> Shipping business tips

How much can you make with a shipping business?

With a shipping business, you can make an average of $12.5M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $10,000. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 6 months.

How much does a shipping business make a week?

Based on our data, average weekly revenue for a shipping business ranges around $260K. As such, you could see monthly revenues of $1.04M.

To know if your shipping business achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your shipping business.

How much do shipping businesses owners make?

The income of a shipping business owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established shipping business is about $260K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a shipping business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Shipping Business Profit Margins

Generally speaking, a shipping business can expect profit margin of around 85%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a shipping business, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, shipping business owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, shipping business owners can ensure long-term sustainability and profitability for their business.

Shipping business owner salary

The salary of a shipping business owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established shipping business, in a prime position, might see an average weekly salary around the ballpark of $221K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a shipping business may be a promising business to start - but the success of your shipping business mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable shipping business.

Part of

Starting A Shipping Business: Everything You Need To Know

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