Local delivery sales: how to sell a workable route

What to take away

This article focuses on local delivery sales: route design, pricing, proof of delivery, the handoff to dispatch and the records behind a quote. For a separate look at dispatch software, see our software review.

It is general information, not advice on motor carrier authority, employment classification, tax, insurance or contract terms.

Those depend on your state, your vehicles and your customers. Confirm with the FMCSA, your state DOT, the IRS and your state insurance regulator. Also confirm with a licensed attorney or CPA.

Sell the window, not the stop count

A customer asking for "forty stops a day" is describing a number they made up. What they need is a delivery window they can promise their own customers.

Ask what time the first parcel has to land and what time the last one can. That answer sets the route, and the route sets the price.

Two accounts with the same stop count can cost you very different amounts. Forty stops inside four square miles of dense retail is one driver and a van. Forty stops spread across a county is a different day, a different fuel bill and probably a second driver.

So quote in blocks: a driver-hour, a vehicle, a window. If the customer wants a per-stop rate, give it, but state the density assumption it rests on and what happens when the stops spread out.

The arithmetic you run before you quote

You cannot price a route you have never measured. Pull one ordinary week of dispatch records and record four measures: stops per driver-hour, loaded miles, cost per stop, and cost per loaded mile.

Calculate cost per stop by dividing the week's route operating costs by completed stops, and cost per mile by dividing those costs by loaded miles. Track stops per driver-hour to check whether the delivery window is feasible. Then price against those. If your cost per stop is C and your target gross margin is M, expressed as a decimal, the minimum per-stop price is C divided by (1 minus M). For a block quote, use the block's total cost in place of C. Substitute your own figures; nobody else's average applies to your city.

A contract priced below your cost per stop does not get better with volume. It gets worse, because the extra stops arrive in the same hours you already sold.

What a delivery customer actually buys

They are not buying movement. They are buying the ability to tell their own customer "it will be there between two and four" and be right.

That makes three things sellable, and only three:

Everything else in a proposal is decoration. If your draft spends more space on company history than on those three, cut it.

Proof of delivery is the product. A signature, a photo at the door, a timestamped scan and a notes field are what separate a courier from a person with a van. Show a sample delivery record in the proposal so the buyer sees the format before they sign.

Roles in a delivery sales process

Sales in a courier business is not one job. It is four, and they fail differently.

The dispatcher's sign-off is the step most small couriers skip. A quote that has not been checked against tomorrow's actual route plan is a guess with a number on it.

Give one person authority to hold a quote until dispatch confirms it. That person is usually the owner, and the rule only works if it applies to the owner's own leads too.

The handoff from sales to dispatch

The failure mode is familiar. Sales sells a 9am to 11am window. Dispatch builds the route at 6am and finds the pickup is forty minutes from the first drop. The driver absorbs the problem, the customer sees a late delivery, and the account churns in month three.

Prevent it with one document that both sides sign off on before the first delivery. It carries the pickup address, the delivery window, the stop count, the vehicle type, the access notes and the escalation contact.

Access notes matter more than they look. Gate codes, loading dock hours, a reception desk that closes at 4pm, a building with no freight elevator. Each of those turns a ten-minute stop into a thirty-minute one.

Test the route on a normal Tuesday before you commit to it in a contract. Then test it again in the week your largest customer doubles their volume, because that is the week the promise breaks.

Claims, proof and what you can say

The Federal Trade Commission's advertising guidance for small business sets the standard here: claims must be truthful and supported, and endorsements must reflect honest experience with material relationships disclosed. A courier claiming "99.8% on-time" needs the dispatch data behind it, not a slide.

Two practical consequences.

First, quote your own measured performance and say what period it covers. "We hit the window on 96% of stops last quarter, measured from first scan to delivery scan" is a claim you can defend.

Second, get written permission before naming a customer in a proposal. A logo wall assembled without consent is a liability, not proof.

Cargo securement is a vehicle-and-load fit question. For interstate work, confirm the applicable FMCSA requirements for your vehicle and operation before promising capacity; do not assume a van is exempt.

Records that make the next quote easier

Every delivery you complete is a data point for the next proposal. Capture it or lose it.

The IRS page on what records to keep is the starting point for the financial side: a system that clearly shows income and expenses, with documents behind purchases, sales, payroll and assets. Keep sales invoices, purchase receipts, bank statements, payroll records, mileage logs and asset records alongside per-route revenue and cost data, not just one monthly total.

Keep the operational record alongside it. Stops completed, miles driven, driver hours, failed deliveries, redeliveries and the reason each one failed. Redelivery rate is the number that quietly eats margin, because the second attempt carries all the cost of the first with none of the revenue.

For driver pay, the Bureau of Labor Statistics Occupational Employment and Wage Statistics tables publish wage estimates by occupation, industry, state and metro area. Use them as one input when you review what you pay, and remember they describe employees, not 1099 contractors.

Whether a courier is an employee or a contractor is a classification question with tax and liability consequences. Name it, document it with a CPA, and do not settle it with a handshake.

Common questions

How do I price a route I have never run?

Run it once at cost before you quote it. Time the pickup, the drive, the stops and the return, then build the quote from your measured cost per stop plus your margin. If the customer will not fund a paid trial route, quote a wider window and say why.

Should I charge per stop or per hour?

Per stop suits dense, repeatable routes where you control the sequence. Per hour suits spread-out work, waiting time and anything with an unpredictable dock. Many couriers quote a minimum block plus a per-stop rate above it, which protects the driver-hour when the route runs thin.

What do I need before the first delivery?

A signed agreement that states the service scope, delivery window, stop or volume assumptions, rate and minimum block, access and waiting-time terms, failed-delivery and redelivery terms, claims process, payment terms and termination terms. Confirm applicable commercial auto liability, cargo or inland marine, general liability and workers' compensation coverage with your broker and state insurance regulator. Also confirm the insurance limits required for the vehicle, cargo and contract. Have a dispatch record that produces a scan trail the customer can read, and name an escalation contact on both sides, because the first exception always arrives outside office hours.

When should I turn an account down?

When the window cannot be held with the fleet you have, when the stops sit outside your density, or when the customer will not fund a trial. A refused account costs you one conversation. An underpriced one costs you a driver, a vehicle and the accounts that were paying properly.