Hello,
First and foremost I want to thank each and every one for taking the time to read and provide feedback to my question(s). Up until two weeks ago I knew nothing about "Expediting", since then I've been reading and researching as much as possible to better educate myself. An acquaintance approached me about two weeks ago with a business proposition involving "expedite delivery". I listened to his sale pitch and it sounded good on paper. He has his own company and has been in the expedite delivery business for about 3 years. From the information he provided, he has his broker license and own authority and has contracts with several companies. The sales pitch is basically this: "Buy a new or used Van (preferably a Sprinter) since they provide the most cargo area and payload capacity, and he would find a driver and procure the loads for my unit". The profit would be split as follows:
25% His commision
35% goes to the driver
40% goes to me. Out of the 40%, I would be responsible for gas, maintenance cost, car payment, insurance. Immediately, it started to look like a bad deal as it relates to me. I asked what is the average gross amount a unit is making and he said on average a unit is expected to make 10 runs every two weeks, which can sometimes come out to be 4k-8k/month. While on paper the numbers look good, once you start crunching the number, the math doesnt quite add up.
As I researched the industry more, I learned that if you own your unit, you can lease it to big companies like Panther and they will provide the driver, dispatch service, freight and thus eliminating the middle man and the 25% commission. This is what I'm really interested in. Can someone provide more information as to how this partnership works? How does Panther or any other company make their company in this type of arrangement? I assume they bid the delivery at say $1.40/mile and then pay $1.00 mile to the unit owner? Even if this is the case, it's more profitable partnership than the one I was proposed. Another question is the insurance..I know it can be really high. In a partnership like the one I described above where my unit is leased to Panther, would my unit be in that scenario be driven under Panther's authority and therefore my unit would be covered under their liability insurance? If anyone can provide information regarding this type of partnership, I would really appreciated. So far I'm just exploring and learning as much as possible to determine if it makes business sense or not. I have the capital to buy a Promaster or Ford Transit T-, which are more affordable than the Sprinter but the business has to be profitable for all parties involved, otherwise it's not worth the effort. Thanks in advance.
First and foremost I want to thank each and every one for taking the time to read and provide feedback to my question(s). Up until two weeks ago I knew nothing about "Expediting", since then I've been reading and researching as much as possible to better educate myself. An acquaintance approached me about two weeks ago with a business proposition involving "expedite delivery". I listened to his sale pitch and it sounded good on paper. He has his own company and has been in the expedite delivery business for about 3 years. From the information he provided, he has his broker license and own authority and has contracts with several companies. The sales pitch is basically this: "Buy a new or used Van (preferably a Sprinter) since they provide the most cargo area and payload capacity, and he would find a driver and procure the loads for my unit". The profit would be split as follows:
25% His commision
35% goes to the driver
40% goes to me. Out of the 40%, I would be responsible for gas, maintenance cost, car payment, insurance. Immediately, it started to look like a bad deal as it relates to me. I asked what is the average gross amount a unit is making and he said on average a unit is expected to make 10 runs every two weeks, which can sometimes come out to be 4k-8k/month. While on paper the numbers look good, once you start crunching the number, the math doesnt quite add up.
As I researched the industry more, I learned that if you own your unit, you can lease it to big companies like Panther and they will provide the driver, dispatch service, freight and thus eliminating the middle man and the 25% commission. This is what I'm really interested in. Can someone provide more information as to how this partnership works? How does Panther or any other company make their company in this type of arrangement? I assume they bid the delivery at say $1.40/mile and then pay $1.00 mile to the unit owner? Even if this is the case, it's more profitable partnership than the one I was proposed. Another question is the insurance..I know it can be really high. In a partnership like the one I described above where my unit is leased to Panther, would my unit be in that scenario be driven under Panther's authority and therefore my unit would be covered under their liability insurance? If anyone can provide information regarding this type of partnership, I would really appreciated. So far I'm just exploring and learning as much as possible to determine if it makes business sense or not. I have the capital to buy a Promaster or Ford Transit T-, which are more affordable than the Sprinter but the business has to be profitable for all parties involved, otherwise it's not worth the effort. Thanks in advance.
