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How to Make Money as a Freight Broker – Part 1 of 2
Probably the most pressing question from those contemplating a move into freight brokering is, How much money can I make? This is a fair question and it should be asked. But, if you are new to this industry, it’s going to be difficult trying to project how many loads you can expect to get, what kind of margins can you expect to get, can you get loads good-paying loads consistently and for how long?
Yes, go ahead and ask yourself (and others if they know and are willing to share what they know). Certainly, some who get into brokering are doing so with shippers who are ready to give them loads. This makes it easier to make projections and to get established. So, making money should be a concern – but should it be your OVER-RIDING GOAL? After all, money is what you need to pay for expenses both business and personal.
Let’s look at this another way: Perhaps money should NOT be your initial goal. Perhaps, making money should be a result, a by-product of what you know and what you do. Let’s at an example albeit maybe a weird example (hey, it’s the best I can do today):
If you know how the game of baseball works, scoring runs by players crossing home plate is what wins the game. So, is scoring “runs” the desired goal? Let’s have the coach line up all the players along the third base side and have each player run to home plate. NOW, they are practicing how to score runs, are they not? Well, not really.
Most everyone knows that there is a lot more to having the ability to run across home plate; batters need to know how to “read” the pitcher, they need to know how to swing the bat properly; they need to know how to run properly once they connect with the ball. Each of these requirements entails a TON of practice and mental discipline.
In this baseball example, running across home plate and scoring runs is a by-product of knowing what to do and then executing what you know.
Likewise, as a freight broker, knowing what to do and how to execute are legitimate goals.
So, let’s talk some more about “How to Make Money as a Freight Broker”.
First, to get much more detail than this email post, you might want to pick up my recent audio CD, titled “A Simplified Guide to Becoming a Freight Broker”.
There’s a lot of info on setting up the brokerage and getting your authority, getting your trust fund or surety bond, putting together your set-up packages for shippers and carriers, avoiding “negative carrier selection”, plus much more.
Go here to pick up the audio CD: >>> A Simplified Guide to Becoming a Freight Broker <<<
There is no one magic bullet for getting loads. There are a variety of methods. A new freight broker should ask himself, How many different ways can I use to find loads?
Let’s look at two examples.
You may go in person to call on potential customers or you may use the telephone and Internet. Both methods can be very effective. It’s mostly a matter of what you feel comfortable doing. Many people do not feel comfortable making personal visits.
Let’s say you want to focus on using the telephone and Internet. You can cover a lot of ground here. Do you want to search locally or open it up to the entire U.S. It’s your choice.
Let me first mention that, yes, you would like to find good “true and tried” strategies to make sure you’re going to be as effective as possible. However, not too many people will clue you in on these “tried and true” methods. Why? They don’t want the competition. So, you usually end up testing different strategies yourself and “listen and learn” as you work with others.
I like to use Google and do searches, using keywords that may be unique or may be something that other brokers may not be searching for. If you go where everyone else is going, you are going to end up calling on shippers who are being called upon by other brokers. You lose your competitive edge with this strategy.
I just did a search and came up with “bamboo picks”. How many brokers do you think are searching for “bamboo picks”? Not too many, I would think. It could be that this is NOT a good selection because maybe these items are shipped in small packages and not on full truck loads. Or perhaps this company does not use brokers. You don’t know until you call and find out.
This is just one example and this particular example may NOT reveal a good result. But, over time, using this strategy, you WILL come up with loads.
In Part 2 we’ll look at another keyword as we try to uncover shippers with loads for you AND we’ll talk about the flip side of making money which is finding trucks when and where you need them.