Establishing a shipping line business is usually transformative in the sense that it creates new opportunities in today’s highly competitive world economy. If ever you thought of starting up this type of business, then congratulations you’re on the right website. Establishing a shipping company goes beyond owning some boats or trucks; it goes into the nitty-gritty of global trade that is not easy to comprehend. But don’t worry, we have got you covered.
It might amaze you to learn that the international shipping industry is responsible for preparing more than ninety percent of the world’s commerce. Wow, that’s a lot, which supports how much shipping contributes to the global economy. Also, the market for shipping containers is growing tremendously. As of 2020, its worth skyrocketed to a staggering $6.41 billion. According to market researchers, it still has the potential to expand rapidly at 12% per year until 2028. As you can imagine, there are certainly great opportunities for further exploration here!
To help build your shipping business here are the most important facts you need to know before starting. We will also dive into the basics and touch upon the market research and the business plan as well as obtaining the appropriate licenses and making sure that we have the right connections. In the end, you will have laid down strategies on how to start and manage a successful shipping firm. Let’s get started!
How to Start a Pack and Ship Business in 14 Simple Steps
Suppose you are looking for ways to join an emerging industry where you can make a considerable profit without investing too much. Starting a pack-and-ship business is the way to go. This industry is among the best startups for entrepreneurs seeking low entry barriers and high growth potential.
1. Storage and Inventory Management
Create a robust system for handling your inventory and storage. This is especially important if your business deals with warehousing or fulfilling orders. Consider investing in inventory management software. The software assists in pursuing stock levels, examining inventory turnover and make the best use of storage space. If necessary, you can also rent or lease additional storage space for your stock and shipping supplies.
2. Marketing and Customer Acquisition Tactics
Marketing is vital in capturing customers’ interest. Develop a strong marketing blueprint to push and draw new clients to your shipping business. Utilize online marketing channels such as search engine optimization (SEO), social media, email marketing, and content marketing to reach your target audience.
Traditional marketing methods, like participating in industry events, sending direct mail, and local advertising, can also be beneficial. Nevertheless, your main focus should be on delivering outstanding customer service. For instance, you can motivate your satisfied customers to refer your company to their friends, which can be a highly effective strategy to increase business profit.
3. Study the Packing and Shipping Market
Before you jump into this new venture, it is important to know more about the market. It is okay to take the time to become more familiar with the sector. Additionally, it would be best if you had an idea about your future customers. And, it would be useful to do some research on the demographics and competition in the area. Taking online business classes can provide valuable insights and strategies for navigating the packing and shipping market successfully.
4. Pick the Right Business Name
Before you can really find out how to start shipping products, you need an excellent name for the business. In this day and age, branding is very important and is a crucial step in starting a new business venture. So, it is necessary to devote some time to finding the right name. You need to pick something that is easy to remember and marketable. It also needs to be available as a trademark and domain name. Additionally, you should consider the costs of starting a business, which include registering the trademark and securing the domain name.
5. Have a Solid Plan
You have a great and unique name, and you did your research. It is time for a solid business plan. Whether you are going independent or buying a franchise, the plan will help keep everything on track.
This should be as comprehensive as possible. From management to finance, you need to know where exactly you are going as a business.
It has to be easy to read since, especially things like startup costs; you will probably present it to different people.
6. Form a Legal Entity
Since you are ready to start your packing and shipping business, you need to get in touch with local and federal authorities to register the business. There are different options here.
There are five possible legal structures: sole proprietorship, limited liability company, partnership, C corporation, and S corporation.
The sole proprietorship is easy and simple to set up because the owner and the legal entity are just one person. This entity also requires less paperwork and can be ready to go faster than the others.
7. Find the Right Source of Financing
The sources of funding are included in the business plan. The financing can come from different places. The first area to look is into your personal savings. It is also possible to reach out to family and friends.
In the era of social media, crowdfunding is an option that is worth exploring. Bank loans, credit card financing, and angel investors are traditional ways to get a business ready to go.
8. Pick a Location
If you want your business to be in a position to succeed, you need to pay attention to the location. This is an aspect of the project that should never be neglected.
Ideally, you want your company to be in an area that is vibrant and flourishing with other businesses. However, it is best to avoid being too close to another company in the same field.
Shopping centers, colleges, and universities are places that may need your services. Doing some deep research in your chosen locality could deliver decent margins.
9. Register with the IRS
This is another crucial step. By registering your packing and shipping business with the Internal Revenue Service (IRS), you will be able to obtain an Employer Identification Number (EIN).
Thanks to this number, it will be easier to open a bank account and hire people. Sole proprietors do not have to obtain an EIN. They can use their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
You can do some of these things on your own or get extra help from an expert like an accountant to put the right system in place for you.
10. Open a Bank Account
You can choose between a checking or saving account. However, if you can handle it, a business credit card can improve your general standing.
It needs to be said that interest rates might be pretty high, just like annual fees. However, thanks to a card like this, you can make larger purchases and build a credit history for your business.
To start this part of the journey, just get in touch with the bank of your choosing. There will be some forms, and you will have to share your personal information.
Furthermore, you will have to tell the bank a little bit more about your business.
11. Obtain the Permits and Licenses for Your Pack-and-Ship Business
To start shipping products, your city requires you to get a business license. There is also the retail sales license, which is a must at the local level.
You will need a license to operate a commercial vehicle and another one to transport goods.
Depending on where your business is located, additional licenses might be necessary. By contacting your local authorities, you will have a clearer picture of all the permits that you need to obtain for your business to be right with the law.
12. Get Insurance for Your Business
This is a step that should not be overlooked. It is, first and foremost, about protecting your investment and your dream. There are many options to look at. It will all depend on the kind of business that you are running.
Working with a professional could help make the right call about what is really necessary in your specific case.
Things you can look at; auto insurance, business interruption insurance, commercial property insurance, general liability insurance, professional liability insurance, and workers’ compensation insurance.
13. Choose the Right Equipment for Your Company
Getting the proper equipment will contribute greatly to the success of your business. And then, you will have to decide if you want to buy or just lease the different items.
The list includes a computer, printer, scanner for the different labels, and a credit card reader. Moreover, boxes, labels, and tapes are also needed.
14. Focus on the Online Presence of Your Company
After taking care of the previous issues, it is time to work on online presence for your business. So, this is a step that can help your business grow.
Start with a professional website and a logo that stands out. And then, you move to the social media accounts to increase visibility. Effective brand management is crucial in maintaining a consistent image across all platforms. To get to the next level, you can purchase software to help you and your clients track packages and be able to print labels. All of this is part of creating a real identity for your business.
Bottom line
In short, if you follow these different steps, you will remove a lot of pressure about how to start a shipping company. Now that you are ready for a big launch, it is time to start reaching out to the local community via newspapers and the chamber of commerce.