What moving companies charge and what is their profit margins
So you’re curious about the money in the moving business? Well, most moving contractors charge by the hour. On average, companies in the US charge around $90 per hour for their labor and transportation, sometimes even including packing and unpacking services. Here’s a fun tidbit: a two-person crew will typically complete 1 to 2 jobs daily, raking in about $720 in revenue for the company. Do the math, and with 240 work days a year (unless they’re secretly superheroes who don’t need weekends), that crew will generate a whopping $172,800 in revenue annually.
Starting a full service moving company
Employee wages
When we talk about the team behind the move, experienced moving company workers earn around $20 an hour. After all the extra costs like payroll taxes and workers’ compensation, the total cost per worker reaches about $25 per hour. So, for a full-time employee working those 240 days a year, you’re looking at an annual cost of $48,000. Double that for a 2-person crew, and it’s $96,000 a yea2】.
Moving leads
Remember, the more jobs you get, the more revenue. It’s crucial to have a steady stream of clients. Offering promotions, special rates, and discounts can help initially. As your reputation grows, word-of-mouth referrals will start flowing in. Buy having a steady flow of moving leads is essential. MoveAdvisor is a moving lead provider that sells moving leads to licensed moving companies based on their area of operations.
Transportation costs
The costs tied to a moving truck include gas, maintenance, insurance, and more. Calculating these costs gives a per-mile expense of approximately 75 cents (excluding financing). Considering a crew drives about 800 miles weekly, the yearly transportation cost sits at $28,800.
Insurance costs
Every moving company should have insurance. This safeguards your business against potential damages or losses during transit. The cost varies depending on the coverage amount and the service provider.
Cost to own moving trucks
Apart from the operating costs, owning a truck comes with its share of expenses like depreciation, state taxes, and optional costs like extended warranty.
Here is a simple chart of a small moving company’s expected revenue with 1-2 employees:
| Item | Description | Amount |
|---|---|---|
| Yearly Revenue | Revenue from moving services | $172,800 |
| Employee Wages | Wages for two employees | $96,000 |
| Transportation Costs | Gas, maintenance, insurance, etc. | $28,800 |
| Marketing Costs | Advertising and promotion | $13,824 |
| Gross Profit | Revenue minus direct costs | $34,176 |
| Overhead Costs | Accounting, insurance, equipment, etc. | Approx. $1,026 (3% of revenue) |
| Net Profit | Profit after all expenses | $33,150 |
Becoming a moving labor provider
Moving labor platforms
There are many labor help platform out there that you can join if you prefer to keep it local and do the jobs yourself. Uhaul’s emove and Hire a helper are ones of the more popular. For instance, MoveAdvisor is alo connecting users to moving companies, but they are more into full-service moves. .
Moving apps like Lugg, Dolly and more
Apps like TaskRabbit match freelance workers with those needing quick jobs done, including moving. Then there’s Dolly and Lugg, which zeroes in on moving bulky items, whether it’s picking up a new sofa or moving an entire home. Handy, on the other hand, focuses on handyman and cleaning service.
Companies with reputation make more money
A solid reputation is golden in the moving industry. If clients trust you to handle their precious belongings, they’ll likely recommend you to others. As your reputation grows, you can even increase your rates. Websites like My Moving Reviews, Yelp and even Google Reviews and the place where users shop for movers. Keeping a good reputation is essential for booking more jobs.
Marketing costs
Word of mouth is fantastic, but a marketing budget is essential to reach a broader audience. Typically, marketing expenses hover around 8% of revenue. So, for a crew generating $172,800 annually, you’re looking at marketing costs of roughly $13,820.
Profits
Let’s crunch those numbers, shall we? With the previously mentioned figures, a two-person crew’s yearly profit is approximately $34,176. However, after overhead costs, we’re looking at a net profit of around $33,150 per two-person crew.
Overhead costs
Overhead expenses include accounting, insurance, equipment, software, and office staff. With just one crew, these costs can significantly impact profits. Yet, with multiple crews, it’s a more manageable 3% of revenue.
Factors Affecting Revenue
Maximizing profits means maximizing work. If you can’t keep your crew busy for 8 hours a day, five days a week, you’ll earn less. Boosting your rates as your reputation improves can also lead to more significant profits.
The moving industry can be profitable, but like any business, it requires dedication, strategy, and a sprinkle of humor along the way.
Tylor Crestin is writing about the moving industry since 2006. The initial idea behind MovingSham.com was to expose the bad moving companies and make sure consumers do the right choice. This was provoked because of the awful moving experience Tylor had back then.
Now in 2018, MovingSham has become the moving industry blog it is today. Tylor is not as active as he used to be, but he is still publishing stories on hot topics in the moving industry.