The moving services industry is very competitive. It may sound like a simple concept, but it isn’t. If it is run correctly, a moving company can be a very profitable business for its owners. “How profitable?” you may ask.
According to the 7 Figure Moving Academy, the average profit margin for a moving company is 10%. If you’re good at it, you may make 20%. However, this answer depends on a lot more than how well you pack and move furniture. Your profit margin depends on several factors. Some of the ones you need to consider are the services you provide, your market, and the type of moving company you are. It’s much more complicated than most people think. Torex Moving has mastered these things and is one of those successful moving companies.
Two types of movers
There are two types of movers, fast and low-cost movers and premium service movers. The low-cost movers are usually run by one person or a single-family. These businesses try to keep their expenses at a minimum so they can offer competitive prices. These companies use Craigslist and Thumbtack to bid for jobs. They may offer their services for $70 an hour. They provide the basic service of moving your things from point A to point B without breaking anything.
The premium service movers are usually franchises or local movers with several owners. You won’t find them on Craigslist. They invest a lot in marketing and sales. They employ a full-time sales team and a marketing team to publish online advertisements. They also have attractive websites that catch the consumers’ eye.
As you may imagine, their overhead is much higher than the low-cost movers, but they also charge premium prices. For example, they may professionally wrap every piece of furniture in your house and move it all across the country. These companies have an itemized list of services, which allows them to charge higher prices than low-cost movers. They can usually charge more for services like packing.
These two types of movers can be divided into another subset of movers: local movers, long-distance movers, and interstate movers. Some companies may offer both long-distance and local moving services. However, many companies specialize in either one or the other.
How do distances affect moving companies?
The local mover will obviously charge less than a long-distance mover and an interstate mover. They make moves that are less than 50 miles away and within the state. They charge by the hour. Sometimes with a 4-hour minimum. The price will depend on the number of hours it takes to move, and the number of movers needed to do the job.
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A move that is more than 50 miles is considered a long-distance move. A move from one state to the next is also considered a long-distance move. There are different types of movers within long-distance movers: full-service moving companies, self-service moving companies, and specialized moving companies.
As you would expect from a full-service moving company, they do everything from packing your belongings, loading and unloading the truck, and transporting your belongings to the destination. These are the companies that charge the most. These types of movers can make thousands of dollars per move.
The self-service moving companies don’t charge as much. However, they do less work therefore, fewer laborers are involved in these types of moves. These movers will deliver a truck or container to the customer’s doorstep. They’ll also handle the transportation of the belongings.
The customer is responsible for the loading and unloading portion of the move. At the opposite end of the spectrum are the specialized moving companies. These companies specialize in moving very large or expensive items like pianos or antiques. They are trained in the proper way to handle such objects. Such knowledge and care come at a premium.
Concluding thoughts on moving companies earnings
The moving industry is pretty complicated. You have your premium and low-cost movers. You’ve got the long-distance, local, and interstate movers. You also have full-service, self-service, and specialized movers. But it doesn’t end there. To determine the cost of a long-distance move, they have to consider more than the distance.
They have to note the weight of the household items, the labor costs, packing costs, and insurance coverage. They may also need to charge for storage if the customer needs them to hold their things for some time. There is no set formula for all movers.
The moving companies that earn a 10 to 20% profit margin have to be companies that know the business well. They must price their services competitively but wisely. Otherwise, their business will not be in the moving industry for long.
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