Logistics Business

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

Pat Walls

•

Updated: October 6th, 2024

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

So you want to start a logistics business?

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

Especially considering:

You could start a logistics business with as low as $500
Based on our data, logistics businesses generate an average of $4.57M 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 logistics business.

Let’s dive in!

Is a logistics business profitable?

Yes, a logistics 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 $4.57M per year with an estimated gross margin of 47%, you could expect to recover your investment within 10 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your logistics 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 logistics business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a logistics business worth it?

If you’re wondering if a logistics business is worth it, the answer is a big YES. With logistics businesses, you have the potential to earn $4.57M 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 logistics 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 logistics businesses case studies.

Examples Of Profitable Logistics Businesses

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

1. 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 12,917 founders

Learn more about starting a logistics business:

Where to start?

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

Need inspiration?

-> Other logistics business success stories
-> Marketing ideas for a logistics business
-> Logistics business names
-> Logistics business Instagram bios

Other resources

-> Logistics business tips

How much can you make with a logistics business?

With a logistics business, you can make an average of $4.57M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $500. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 10 months.

How much does a logistics business make a week?

Based on our data, average weekly revenue for a logistics business ranges around $95.2K. As such, you could see monthly revenues of $381K.

To know if your logistics 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 logistics business.

How much do logistics businesses owners make?

The income of a logistics 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 logistics business is about $95.2K. 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 logistics business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Logistics Business Profit Margins

Generally speaking, a logistics business can expect profit margin of around 47%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a logistics 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, logistics 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, logistics business owners can ensure long-term sustainability and profitability for their business.

Logistics business owner salary

The salary of a logistics 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 logistics business, in a prime position, might see an average weekly salary around the ballpark of $44.8K.

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 logistics business may be a promising business to start - but the success of your logistics business mostly depends on your effort and your approach.

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

Part of

Starting A Logistics Business: Everything You Need To Know

‹

›