I am new to the industry and am looking at buying up a small pallet delivery firm. With out any of you guys giving away too much, what net % profit margin would you expect for a firm that does day delivery pallet work, all class 2?
Cheers
depends on turnover! 5% of £500 is pants but 5% of 5 million is better
flippermaj:
I am new to the industry and am looking at buying up a small pallet delivery firm. With out any of you guys giving away too much, what net % profit margin would you expect for a firm that does day delivery pallet work, all class 2?Cheers
Not trying to be negative BUT
1 New to the industry, sorry but its a struggle for people who have been in the industry for a lifetime and know the job inside out to compete with any pallet delivery firms
2 Buying up a small pallet delivery firm, ask yourself the question “why is it up for sale?”
3 A good businessman knows what profit margin he wants and usually has a business plan to support this
4 Pallet delivery firm all Class 2, have you seen the amount of double deck artics around moving pallets all day and especially at night, volume = cheap rates
5 Go for it and keep us posted on your success
Based on 50 years experience in this silly game, my advice would be to put your money in the building society: it ain’t much, but it’s guaranteed and worry-free.
Not quite clear whether the OP is talking about a small pallet delivery firm which delivers pallets upon which are loaded goods for delivery or: a small pallet delivery firm which delivers wooden or plastic pallets to customers so that they can put their own goods on them.
Just to clarify, it’s delivering pallatised freight and ad hoc items. The business is not a member of any pallet network but gets work off the main pallet network members where they can’t service a specific area.
The general opinion is there isn’t much money in it! The question then is why are all those transport firms out there bothering■■?
Cheers
are you contracted in? if not its worth nothing
flippermaj:
Just to clarify, it’s delivering pallatised freight and ad hoc items. The business is not a member of any pallet network but gets work off the main pallet network members where they can’t service a specific area.The general opinion is there isn’t much money in it! The question then is why are all those transport firms out there bothering■■?
Cheers
Because the hauliers are all shareholders of the pallet company so it’s within their interests to make it work. The big pallet networks can move pallets from one end of the country to the other for pence because of the sheer volume. Unless you’re in the same position then you’re completely wasting your time unless the work you plan on doing is specialist, such as needing a specialised vehicle for the job that you can charge a premium for.
flippermaj:
The business is not a member of any pallet network but gets work off the main pallet network members where they can’t service a specific area.
The problem with that business model is this.
Why do the pallet networks need that perticular area covering? The only reason is that it’s not financially viable as a long term business model. Normally rural/semi rural areas with large distances between drops and long drive times. Instead of a truck doing multi drop on an industrial area 15-25 pallets per truck per day you may only get 6-8 drops done, plus damage to the vehicles.
Saying that, if you are ‘covering’ an area because the network is struggling, you can charge a much higher premium than a signed up network member. If you do, be prepared to be dropped like a hot potato as soon as they find the next haulier that thinks they can make it viable.
Most pallet network members don’t make money delivering pallets - they make it on own customer inputs. I see from your post that these aren’t mentioned so I assume there aren’t any. Because of this I think you will struggle to make it viable.
I think the industry average for haulage company profit margin is 3%.
That firm is a bit different from the norm as they Multi drop rather than taut unit loads.
Industury average in general haulage is around 3% profit
1970commer:
have you seen the amount of double deck artics around moving pallets all day and especially at night, volume = cheap rates
They are doing the inter depot trunks feeding the co’s that do the C2 daytime distribution/collection work.
Logic: lots of DD night trunks = lots of pallets that need distributing next day. 
Oh, by the way, Parcel Force are going to trial 7 day a week doorstep deliveries.