Methods of convincing Direct Shippers

start out with a fictitious name and hire Russian drivers and don't pay them and keep all the money for yourself they don't have green cards so they can't file complaints against you .... give em enough money for fuel and a bologna sandwich no more keep the rest for you tell them you will give them full payment at the end of the month string them along as long as you can the split and start up somewhere else but be careful to find new Russians the old guys will be harder to fool again

 

What a great way to impress a new shipper, by giving them your factoring paperwork saying where to send the money. lol.

Besides you are already talking about cutting your margin, now you will give away another 3%? Living expenses will be a drop in the bucket. What happens if a shipper doesn’t pay?

I’m not saying don’t go for it, but it’s much tougher then you would imagine.

 

Contingent Cargo
Contingent Auto Liability
General Liability
Truck Brokers Professional Liability

Runs around $9000/yr for up to 1 million per year in revenue.

@ the OP... being 18 is nothing to worry about other then the lack of credit will increase your costs for the surety bond and insurance. I started my trucking company at 24 so being young isn’t a big deal. But you gotta be smart and what you learn in school doesn’t apply whatsoever.

 

Do shippers think negatively of their brokers factoring? Is factoring with brokers that uncommon to warrant a negative reaction? I was gonna go with non recourse as insurance against the shipper not paying.

 

The reason I can offer the shippers lower prices while maintaining competitive offers with trucks and afford the extra overhead from the factoring is because I get to save 100% of the profit, and reinvest it back into the brokerage. I'm a student, meaning I don't have to pay for anything at all.

 

I might be misunderstanding your reply, but does insurance for brokers go up as revenue does? I was told that insurance was around $5k - 6k per year, assuming a decent credit score.

 

Would it put you off as a shipper? You know that carriers can come after the shipper if the broker doesn’t pay?

What if you have a carrier scam you by double brokering and collecting the payment but not paying the actual carrier?

I don’t know anything about factoring for brokers. Have you found a company? Do they offer non recourse? What if they won’t accept your shipper who you made 300 calls to get?

I’m just throwing some things out there for you bud. Not actually trying to be negative.

Yes, it sure does. More business being done equals more risk. Just like adding more trucks and trailers is more risk therefore more money.

5 to 6k is likely for $0 to 500k revenue. While my quote is 500 to 1m. So yes the amount goes up but it’s less per dollar as it goes up if that makes sense?

You might be better off being an agent at first. Where do you live? Somewhere near a major freight market or ?

 

Okay, let's start at a more basic level. First question is this- what do you have for initial startup and operating capital? Have you talked to any insurance and bonding agents, and gotten any actual quotes?

 

I intend on starting the brokerage this Summer, whereupon I'll have $20k - $25k in capital. Because I just started building credit last month, I have no credit score, which is why I haven't been able to get quotes. By June I'll have a score, which is why I'm starting in the Summer.

 

Not to be a dick, but how are you going to have 20-25k by this summer? I was an 18 year old college student, once. I can't recall ever having any opportunity to put up half that.