How to Charge for Delivery Services

If you want to start a courier or delivery service, then you'll need to determine how much to charge.  The easiest answer is to charge according to what you're delivering and how far you need to travel to deliver it, but other factors need to be considered as well.

• Look at how much your competition is charging to deliver similar items.  This can be a good yardstick for setting up your own rates.


• Take stock of what it is you're delivering.  Larger, heavier items should have a higher delivery charge than smaller items.  It will take more manual labor and fuel costs to deliver larger and heavier items, so you should charge accordingly.


• Include distance traveled when setting your delivery prices.  A local delivery should not cost as much as a delivery for the item that goes out of town.


• Assess how much you need to charge given the number of employees you have.  Labor costs need to be accounted for when you set your delivery rates.


• Factor in how much it costs to operate your vehicle (including insurance and fuel costs) when determining your delivery prices.


• Decide how much of a discount you wish to give for recurring deliveries.  People who pay you weekly or monthly to deliver things for them can be a source of revenue that your courier company can count on month after month.  Decide how much of a discount you wish to give these businesses for signing up with you long term.


• Compete on price or service but not necessarily both.  It's not necessarily the case that customers go for the cheapest courier service.  People are willing to pay a premium for good service.  Decide if you wish to be cheap or good, but courier services can seldom be both.