How to Start a Cargo Van Business: A Comprehensive Guide for Beginners

Are you failing to handle your ever-increasing delivery volumes with your two-wheeler or sedan-style car?

Do you find it hard to increase your deliveries per journey due to low payload capacity, space constraints, weak engines, and lower horsepower?

If yes, it’s time to consider cargo vans for deliveries.  

They form an ideal fit, especially for small transportation businesses. 

The reason? 

They have a significant load capacity, are easy to drive or park on busy streets, and are cheaper compared to box trucks. 

If you want to know how to start a cargo van business, this blog is for you. It guides you through the steps involved, the checklist you must follow, and the benefits of this business.

9 Steps to Start a Successful Cargo Van Business

Of late, there have been a lot of questions about starting a cargo van business.

For example, this Reddit user is looking to know whether the model he chose is good.  

I’ve been looking at the Nissan NV200 and the smaller cargo vans as a starting vehicle. Specifically the Nissan. My concern is that there may not be a huge market for this style of van. Curious if anyone has any ideas, feedback, or general advice. Appreciate your time in advance.

Then there’s another user asking whether a cargo van business is profitable these days.

If you also have similar questions, this section will guide you through all the steps while giving you the answers.  

1. Develop a solid business plan

Starting a new business requires planning things such as banking/funding options, licenses and permits, and insurance policies, as well as keeping everything well-managed.

A proper cargo van business plan will help you turn thoughts into action at the right time. You can include the following things in your business plan:

• Keeping your budgets in check.
• Identifying your competitors and target market.
• Strategic marketing techniques and business goals.
• Pricing strategy as per your requirement.
• Operational plans and challenges that can come along.
• Skills and expertise required in your delivery drivers or other team members.

2. Secure financing

You need to calculate your startup costs, including vehicle purchase or leasing, cargo insurance, marketing, operating expenses, licenses, and permits. 

Additionally, you should explore various funding options such as loans, grants, investors, or personal savings to finance your business. 

If you’re curious about the startup costs of starting your cargo van company, you might want to research specific figures that will give you a clear idea of what to expect and help you secure the financing you need to get started.

3. Acquire the right cargo van

As every business is different, the type of van you would require depends on the number of packages, weight, and dimensions of parcels you would be carrying. Budget is another factor when it comes to buying a van, depending on your business type.

Depending on all the above factors and the features you need in your van, you can opt for a top cargo van that gives the best result within the budget. You can choose one from the link or visit the nearest dealer. You can ask the dealer about upfitting your van with the required parts during the purchase process. Furthermore, you should invest in necessary equipment such as dollies, straps, and blankets to ensure smooth operations.

4. Register your cargo van business

Before registering your cargo van business, you may need to come up with a business name and logo that you like, based on their availability (keeping your name and logo unique will save you from any sort of copyright infringement). You can then have a proper website and list your cargo van delivery business on Google so that people can find you.

Depending on your cargo van business requirements, you can register your van delivery business entity as an LLC, corporation, or partnership. A lawyer will help you set up the entity and explain more about the usage, terms, and conditions.

You may also want to open a banking account for your cargo van delivery business. It will help you keep your personal and business finances separate, give credibility to your business, help you organize things, and pay taxes on time.

5. Obtain necessary licenses and insurance

Although you don’t need a CDL (Commercial Driver’s License) for your van business, you may need to get the required permits, licenses, and cargo insurance coverage plan based on your business type (flower delivery, courier, or any other transportation business).

For instance, if you offer moving services, you may need a license depending on state and local laws. A lawyer can help you understand licensing requirements and cargo insurance so you acquire the appropriate license to start delivering fantastic customer experiences.

Moreover, you must also have commercial auto liability insurance (often called commercial auto insurance) to cover accidental injuries and property damage. This will help you operate your cargo van business while preventing legal issues that could arise later.

6. Brand and market your delivery services

Branding helps your business stand out and attract customers. A clear and enticing brand voice builds trust and awareness, making it easier for potential clients to recognize your services. Steps for branding and marketing include:

• Create a strong brand identity: Design a logo, website, and social media presence that resonates with your target audience.
• Vehicle branding: Consider wrapping your van with your company logo and contact information to increase visibility.
• Marketing strategy: Use digital marketing strategies such as SEO, Google Ads, and social media campaigns to attract customers actively searching for delivery services. You can also network events and local advertising to reach and attract target customers effectively.

7. Hire and train staff

You should recruit skilled and reliable staff, such as drivers, dispatchers, and administrative personnel, to support your cargo van operation. 

Furthermore, you need to conduct background checks and screening processes to ensure quality hires. Once you hire them, you should provide comprehensive training and ongoing support to ensure your team is well-prepared and aligned with your business goals.

8. Invest in technology and software

As your business grows, managing deliveries manually can become overwhelming. To simplify operations and enhance efficiency, consider using delivery management software like Upper. These tools offer features like:

• Route optimization: Efficiently plan the best routes to minimize travel time and fuel costs.
• Real-time tracking: Keep an eye on your cargo van drivers and update customers with accurate delivery times.
• Proof of delivery: Collect digital signatures, photos, or notes upon delivery to ensure accountability and professionalism.

Using delivery management tools can significantly improve your overall operational efficiency, reduce costs, and even improve the customer experience.

9. Establish partnerships and networks

You need to build strong relationships with suppliers, vendors, and industry partners to access resources and support for your business. 

Additionally, you should network with other businesses, associations, and organizations to explore collaboration opportunities and expand your reach in the industry.

Key Benefits of Starting a Cargo Van Delivery Business

If you are new to the cargo van business, you might be amazed to see that they can help you in numerous ways. The reason why local businesses are switching to cargo van delivery is its capability to lower the hassle and boost revenue. Here are the 3 main benefits.

1. More number of delivery orders

A cargo van is your go-to option as it allows you to manage higher order volume and raise your total deliveries. There are three key ways it helps you with this.

• Offers more space: The main purpose of cargo vans is to carry a huge amount of packages. So, you can add more deliveries if you have a plethora of orders but are unable to fit them in the delivery vehicles due to their size. For this purpose, you can go for sprinter vans.
• Offers more payload capacity: Along with more space, a cargo van can also deliver heavier parcels due to a huge payload capacity, unlike normal cargo vans or box trucks.
• Offers ample space for lengthy packages: Although vans offer appropriate spaces for long packages, you need a cargo van if you have to fit large building materials like plasterboards.

2. Space to fit in multiple packages

A cargo van is normally a large box on wheels. Though slightly different from box trucks, people sometimes use cargo vans and box trucks interchangeably. 

These vans offer ample space to carry various items, including packages, tables/chairs/furniture, equipment/tools, and food items. The cargo space at the back of the van is measured in cubic feet, and it has a significant load capacity. You can choose a model from manufacturers that provide different roof heights and wheelbase options based on your cargo van requirements.

As cargo vans are supposed to be spacious to carry more packages, they only come with two front seats. However, if you require more workers to fulfill your business needs, you can opt for other models that offer seating upgrades, such as a passenger van.

You can also upfit your cargo vans through service professionals or check if your manufacturer provides upfitting services during purchase. A van upfit is an upgrade that makes it versatile and involves installing customized accessories and parts without altering the van’s design. It includes:

• Shelves 
• Bins
• Refrigeration 
• Coolers
• Wall hooks 
• Wall pockets
• Hand-washing stations
• Ladders
• Racks, drawers, and cabinets
• Cargo tie-downs

3. Increases delivery speed and gives branding opportunity

A cargo van can help you improve your delivery time and make your customers happy without the stress of a speeding ticket.

• Compared to freight trucks, cargo vans are smaller and easier to move. So you can drive across your routes quite conveniently. Moreover, driving a cargo van doesn’t require a commercial driver’s license (CDL) and requires less parking space. So, it is better than a giant truck because it increases delivery speed. The Sprinter van business model is prevalent for its speed and efficiency.
• A vehicle with more horsepower offers more speed to carry heavier payloads. A cargo van can be your best bet if you have been struggling to carry heavy packages on a vehicle that slows down.
• While you can glam up your new cargo van with graphics, taking advantage of the blank space on the sides can increase your brand’s awareness. Such advertising on your cargo vans can target the public eye in the locality.
• According to the American Trucking Association (ATA), a vehicle wrap on a local delivery van is recorded to make around 16 million impressions yearly. So, cargo vans can also give you a good return by simply moving around the roads and promoting your business.

What Can You Use a Cargo Van Delivery Business for?

Businesses that require to deliver or transport highly loaded and multiple packages can use a cargo van to fulfill these demands. 

Cargo vans are similar to passenger vans, but they have large back doors that help delivery drivers to load and unload packages. 

So, it is also crucial to hire professional delivery drivers and give them the training to perform their jobs with ease and expertise.

Depending on your preference and market demand, you can use a cargo van business for services including:

• Deliver Furniture (or moving services)
• Last-mile delivery services
• Catering services
• Flower delivery
• Medical transports
• Mobile pet grooming business
• HVAC technicians
• Cleaning services
• Mobile auto detailers

Recommended Tools and Resources for Cargo Van Businesses

Starting a cargo van business involves more than just having a vehicle and customers. To set yourself up for success, it’s essential to leverage the right tools and resources. 

Here are some recommendations to help you get started.

Upper Route Planner for efficient route optimization

Managing multiple deliveries can be time-consuming and burdening without the right tools. That’s where Upper route management software comes in handy. 

Based on the analysis, the likely features for the page, and their explanation for the section on Upper, are:

• Advanced route optimization: Upper utilizes real-time data integration, including delivery locations, driver availability, vehicle capacities, and live traffic, to create efficient routes. It minimizes drive times and reduces transportation costs. This ensures that goods reach customers on time and efficiently.
• Scheduling ahead of time: For scheduled deliveries, you can plan routes and schedule their dispatch ahead of time. It helps avoid last-minute scheduling chaos and errors.
• Bulk Import of up to 500 stops: Our software supports importing up to 500 delivery stops. With smart address validation capabilities, you can also stay assured that there is no duplication or inaccuracy in delivery addresses. It enables you to handle large delivery volumes while reducing the effort of adding stops manually. 
• Driver mobile app: Upper provides an app for drivers to access delivery details, navigate routes, scan packages, and capture proof of delivery. When drivers get all they need to simplify their delivery operations, it enhances their overall efficiency. 
• Placement optimization: When adding a stop, Upper lets you fill in the details of where an order is in the cargo van. You can also images of the package so the driver can easily identify it and unload it fast, reducing delivery times. 
• Automated customer notifications: Our software provides GPS tracking that monitors vehicles in real time and sends live tracking links to customers. Plus, they also get accurate and up-to-date ETAs, which helps enhance delivery transparency and build trust.
• Integrated communication tools: Upper’s app for drivers allows them to connect with dispatchers on the go to enhance coordination and fix run-time issues.
• E-commerce storefront integration: By integrating with popular e-retail storefronts like Shopify and WooCommerce, Upper lets you import and map orders directly as location pins. It reduces the time to plan routes and makes planning faster.  

Upper is simple to use and requires no advanced technical skills, making it perfect for cargo van businesses of any size.

Online training courses and industry certifications

Building a successful cargo van business isn’t just about getting a van and starting deliveries. You can benefit from learning new skills that can improve your service and give you a competitive edge. 

Many online platforms offer training courses and industry certifications that focus on logistics, delivery management, customer service, and business operations.

Here are some recommended platforms and courses:

• Coursera: Offers courses on logistics and supply chain management from top universities. You can learn at your own pace and earn certificates to boost your credibility.
• Udemy: Features a wide variety of courses related to delivery management, customer service, and business fundamentals. Many are budget-friendly and taught by industry experts.
• LinkedIn Learning: Provides courses focused on enhancing business skills, including project management and customer service. You can also earn certificates to showcase your skills on your LinkedIn profile.

These courses help you stay up-to-date with the latest industry practices and ensure you’re providing top-notch service. Certifications can also make you look more credible in the eyes of your customers.

Conclusion

With online orders on the rise, now is the perfect time to start a cargo van business and boost your income! If you already own sprinter vans, you can follow simple steps to get started right away.

While setting up your business and planning for growth, let Upper handle your route planning. With features like route optimization, one-click dispatch, and API integration, you can save time and improve efficiency. Make deliveries smoother and enhance customer satisfaction with Upper Route Planner. Try the 7 days free trial today.