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What’s It Take to Make $100,000 as a Freight Broker?
The question on most people’s mind as they call or email me is, “How much can I make”? This is a fair question and one that SHOULD BE asked before committing to this or any other business.
Of course, the income potential for freight brokers, in reality, is almost unlimited. Most of it depends on the broker’s vision for their venture. Some brokers work alone from home and stay small; others grow their brokerage with agents and may align it with trucking or some other related business.
So, let’s look at what you need to do to make $100,000 as a freight broker.
There are some variables and assumptions and we first need to lay them out and be realistic about them. The variables and assumptions I’m selecting here are for a start up operation that has gained sufficient knowledge about working with shippers, motor carriers and other third parties. These brokers have a game plan – that is, they’re not ignorant nor are they trying to wing it.
Here are some variables and assumptions:
First, we are assuming that a broker will be getting an average of 10% after paying the trucks, i.e., the gross profit.
Second, we need to estimate the total gross amount that shippers are paying. So, in this case, it would be $1,000,000 (100,000 / 10%).
Third, we need to make an estimate on the average gross amount that each load is paying the broker. In this case, a reasonable amount might be $1,600. This amount depends not only on the rate the shipper is paying but the distance as well. If the broker is getting a lot of loads for short hauls of 400-500 miles or so, the amount for each load may be as low as $80 or so.
Fourth, we need to estimate the number of loads per year if the shipper is paying $1,000,000 and using the average on each load of $1,600, this would amount to about 625 loads per year ($1,000,000 / $1,600).
Fifth, on a weekly basis, the broker would be moving about 12 loads (625 / 52 wks).
Sixth, on a 6-day work week, the broker would be moving about 2 loads per day.
Folks, by moving 2 loads per day – consistently every day – a broker will make about $100,000 using the assumptions above.
Here’s a recap on the math – 2 loads x 312 days (6 dys x 52 wks) 624 loads x $160 profit per load ($1,600 x 10%) = $99,840. Let’s call it $100,000 with some rounding off.
Now, is it easy to do this? How long will it take you to do this? What might be your strengths or constraints?
Call me at 1-888-526-ATEX (2839) and I’ll give you my answers based upon some input from you. I’ll give you the straight scoop. Don’t fall for a “pie in the sky” sales pitch. Get realistic answers here.