If you’re becoming a little bored or stuck in your current job, and you’re looking for inspiration on the type of business you can branch out into, you’ve probably done a fair bit of information-searching on the Internet. You’ve done market research, you’ve thought about your interests, you’ve even considered whether you have to work at all!
Does this sound familiar?
The chances are however, that you do need to work, and in that case you need to find a business opportunity that not only calls out to your interests, but one which is going to be lucrative, and give you the financial support you need.
When you start searching for lucrative industries which have the perk of being able to be run from almost anywhere, you might find the freight industry coming up a lot in your search results. This is because working as a freight broker in particular is one of the most reliable, lucrative, and easy to run businesses once set up; of course, starting out is the hardest part, and this is what we are going to talk you through right now!
First things first however, what is a freight broker?
What is a Freight Broker?
We know that the freight industry is about transportation of goods. Think about the things in your house for instance, e.g. your sofa, your table and chairs, your bed, your wardrobes – how did they get from the place you bought them to your home? Either you had a flat pack bought at the store and you managed to somehow fit it in your car, or they were delivered by a large van.
That large van was part of the freight business, so when you think about it in that context, you understand how large and far-reaching this business is. Because of that, you can then begin to really get a jist of how money-spinning the freight business can be.
Now, a freight broker doesn’t do the driving of the truck, and they don’t actually get to even see the goods that are being transported – think of a freight broker as the middle man/woman, the one who does all the coordination, without actually ever seeing the person who is doing the shipping, or the person who is receiving the goods, and not even seeing the goods themselves.
Obviously, a freight broker is an office-based job, so that means you can base yourself anywhere to do this, provided you have access to a computer, the Internet, and a phone line.
Before you start even researching how to become a freight broker, you need training, and the online world is for you. Check out sites such as Freight Broker Bootcamp for some serious nods about this whole world, which can seem a little confusing at first. Of course, once you realise what it is all about, it’s not confusing at all.
To really break it down into an easy explanation, a freight broker is therefore an individual, or even a company, who works to liaise the safe and efficient delivery of goods between supplier and customer. The freight broker then earns commission from that transaction.
A few other people you may come into contact in the freight industry include:
- Shipper – The company or the individual who has the goods which need to be transported
- Motor carrier – The company or the individual who is doing the transporting, e.g. the people with the trucks
- Freight forwarder – This particular entity is about combining several small shipments into one larger one, making it cost-effective for the motor carrier to transport the goods. Whilst a freight broker deals with the individual shipments, a freight forwarder is more about combining these shipments, and coordinating everything from that end
- Import & export broker – This particular job role involves liaising with government officials and customs departments, and therefore deals with international shipments
There are a few other job roles which do fall under the freight industry umbrella, but these are the main ones that you will probably come into contact with in terms of regular freight broker working.
Now you know what a freight broker is, and you know a little more about the whole industry, let’s talk about how you can get started.
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How to Become a Freight Broker
Obviously, you need to research in abundance before you do anything, so again, head online to sites that give you all the information you need, reliable information! Freight Broker Bootcamp is a good starting point, and will show you the first steps you need to take.
Overall however, in order to get started and begin your business, you need to bear the following points in mind:
- Find a Target Market
First things first, what area of the market are you going to aim towards? Are you going to stay local? Are you going to go national? Are you aiming to eventually be international? Are you going to specialise in small shipments or large ones? What type of cargo are you going to specialise in? Or, are you going to be an all-rounder?
It’s important to have a clearly defined market, as with any new business. If you can target your audience, you know where to focus your marketing aims, and then you can begin to work towards developing a positive reputation in that area.
- Know The Industry Inside Out
Of course, we’ve mentioned already that you need to do your research, and this means you need to know about how it works, the upsides, the downsides, your competitors, and everything else in-between. Don’t miss this step out!
- Know Your Options
There is the option to start as an agent, and work up towards being a broker in your own right. This means you will be an independent worker who is there to represent an already established broker.
You can network and gain a positive reputation by doing this, whilst also learning on the job. The work is almost the same, but the broker is the one who has the responsibility for the financial side of things, so you can slowly drip feed your learning, one section at a time.
- Networking is Everything
In order to find high quality, reputable carriers to work with you, need to network. Of course, you also need to make sure that the carriers are confident in the job that you can do, so make sure that you are always professional and efficient when dealing with potential clients.
Check in trade magazines, talk to other brokers and those in the industry, and if you see a freight carrier on the road, take a note of the number and company, and give them a call. There is a lot of importance that must be placed on word of mouth advertising here also, so keep your ears to the ground.
- Make Sure You Have Enough Capital
Obviously, you need to invest some cash into your new business endeavour, so save up, or speak to your bank with a clearly defined business plan to hand. Try your best to maintain a positive and professional relationship with your bank at all times, because you never know when you may need credit-related help whilst starting up your business.
- Invest in Basic Office Supplies and Equipment
Yes, you can work from anywhere, but you do need to have the basic type of equipment to hand. Overall this would include a PC/laptop, printer, Internet connection (high quality), telephone and connection, space to store documentation, and back up drives for important information if saving documents to your computer.
- Know The Basics of Documentation
It might be a good idea to do a basic book-keeping course, or a record-keeping course, because this will give you the information on how long you need to keep certain documents for, especially in terms of taxation and finances. If you get this part of it wrong, ignorance of the facts is not going to save you from a hefty fine and potentially a lot of trouble.
- Develop a High Quality Marketing Strategy
If you want to stand out from all the other freight brokers out there, you need to be able to market your services effectively, in the right way, and aimed towards the right people. This ties in with our first point, of having a clear audience, but you also need to know how to market in the first place.
Of course, word of mouth is important, but email drops, being at the right events, and having advertisements in the right trade magazines, these are all ways to drum up extra business, as well as networking effectively.
The Basic Daily Functions of a Freight Broker
In order to continue your business once it begins, you need to do your job properly; of course, to even begin your working life as a freight broker, you need to know about the daily tasks you will need to perform.
In this section we’re going to give you the basics, because the actual static duties depend on the type of business you’re going to develop; if you go down the international freight cargo business, then you might have to liaise with customs and government agencies, or you may need to liaise with an import and expert broker, to do this part of things for you.
To give you a general overview however, a freight broker’s operations include:
- Once networking opportunities have been taken advantage of, you will have a range of different shippers contacting you on a daily basis, with a load which needs to be transported from them to a recipient. As the broker, you are working to liaise the whole journey, from start to finish
- You take note of the shipment, taking all the important information, such as the load, what it is, how heavy it is, any special instructions, where it is coming from, where it is going to, contact numbers on both sides
- You then contact your motor carrier of choice, and if you are successful, you will have a few to choose from; you need to find the right one for this particular customer’s needs
- If they are available and agree, you then prepare the right paperwork and a contract and send it over to them for completion and signing – this used to be done by fax, but nowadays this is more electronic, via email. This document will contain all the information of the load and where it is going, as well as the rate and the amount which is going to be paid to you, and how, including invoicing requirements
- The motor carrier then arranges collection of the goods from the shipper and it is delivered to the recipient/customer
- It is good practice for you as the broker to confirm that the load has been collected from the shipper, by telephone, and also to confirm that it has been delivered and received by the recipient/customer – this will help you build up your reputation for reliability, because it shows professionalism.
The most important thing to stress when beginning to move into the world of freight brokering is that you need to begin small and work your way up. The idea of working as an agent, learning from the broker you are attached to, is a good way to build up your knowledge and find contacts along the way.
A word of warning however, it’s not good business practice or ethical to use this experience to build up contacts to steal away from your attached broker – if a contact wants to follow you when you start your own brokering business, that is their decision, but you shouldn’t steal them away with your own actions.
It’s just common sense at the end of the day.
Is the Freight Business Lucrative?
Obviously, you want to know that the business you are thinking about entering into is going to earn you cash, because nobody works for free.
You could enter into any industry you wanted to, if you had the skills and knowledge to begin with, but you wouldn’t stay in it if you weren’t making any cold, hard cash. We need money to live, so you need to know that the freight business is the one that is going to give you the income you need.
Of course, maybe you’ll become super-rich, but it’s best to lower your sights and be happy with a fair and comfortable income, at least to begin with. We talked at the start about how when you order a piece of household equipment from a store, it is usually delivered to your home by a van, and this is part of the whole freight industry.
From that example alone you can appreciate the sheer scale and possibility there is in entering into this industry – can you imagine how many people have household goods delivered every single week? Every single day even!
Your targeted audience plan will tell you how much cash you can expect to make; if you stay local, you’ll make enough but you won’t make huge amounts, whereas if you go national, you’re going to make more, simply because there is more scope for business – you don’t need to be a genius to really figure it out.
Of course, you might want to work up towards going international, where the big bucks are, but that means that you need to deal with import and export red tape, and then you may need to employ the services of an import and export broker, which reduces the amount of commission you can expect to make from that particular transaction.
It’s about weighing up the pros and cons, creating a targeted business plan for you, and marketing it in the best way possible. There is no hard and fast rule on how much you can expect to earn, but the freight business is lucrative, because it’s so huge.
There are many other individuals and companies who work in the freight brokering business, and that alone tells you that there is cash to be made; the more brokers there are, the more competition there is, and that means a bigger importance has to be placed on marketing and professional appearance.
At the end of the day, if you want to make your business work, you have to put in the time and effort, and you have to be prepared to start slowly and build upwards.
They say that Rome wasn’t built in a day, and that’s certainly a truth in all situations where business is concerned. You need to give yourself the time to learn about not only the job, but the industry as well, including the businesses and suppliers who you are going to be dealing with on a regular basis.
The freight industry might be large already, but it certainly shows no signs any time soon of slowing down, in fact if anything, it shows major signs of speeding up even more.
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