I work with a lot of moving companies throughout North America. I manage tens of thousands of dollars of my moving company clients’ AdWords budgets each month, and I help them get leads and make the phone ring.
Through my marketing work with those moving companies, I’ve come to know the moving business intimately. It’s a competitive business, it’s a hard business, but when run correctly, a moving company can be a very profitable business for its owners.
However, some of the keys to profitably running a moving business are to know your company, understand your market, and figure out where you fit in. As a friend once told me before my first jiu-jitsu class, you have to get in where you fit in.
As a moving company owner you have to be self-aware and understand what kind of moving company you run, and you have to understand your local market and the moving niche opportunities within it, and you have to get in where you fit in.
In my experience there are three kinds of moving companies.
1. Low-Cost Moving Companies
These are the low-cost moving companies that compete primarily on price. These kinds of moving companies are often referred to as “low-end” moving companies, but that doesn’t have to be a negative thing, and often these lower-end moving companies do awesome volume and make a great profit each month (which is what business is all about).
These low-cost providers are usually run by one owner, and often their family members work in the business (the son is a mover, the wife does sales and dispatch, etc.) There’s not much revenue to be spent on overhead each month, so these low-cost moving companies keep the overhead razor thin, and because of that I have a warm spot in my heart for these kinds of companies.
These low-cost providers compete on price, and they compete like savages. These are the moving companies getting all the jobs on Thumbtack for $60 to $70 an hour. These are the moving companies using Craigslist to get an extra 5 jobs each week.
The low-cost moving companies provide a quality service. They move your stuff from point A to point B, and they do it without breaking anything. These guys are great if you need one piece of furniture moved, of if you’re moving a small house or apartment. They probably don’t do any long distance moves.
2. Premium-Service Moving Companies
The second kind of moving company is the premium-service moving company, and a lot of them charge premium level prices. These are the franchise guys and the local movers with a handful of owners. These companies invest a lot in their marketing budgets, and they have full-time sales employees who use proven selling scripts when they’re on the phone with customers.
These premium companies offer premium services. They’ll pack your entire house, they’ll expertly wrap every piece of furniture, and they’ll move you across the country.
These companies break up all those services when selling them to the customers and this allows them to charge higher prices than the low-end guys. They also invest heavily in their marketing budgets and spend a lot of time and money on online advertising, including AdWords and SEO efforts.
These companies can also be very profitable for their owners. They spend a lot of money on advertising, employees, and other overhead, but they also do a high volume of moves at premium prices, and you can make a great monthly profit running that kind of model.
3. Moving Companies That Go Out of Business
Finally, there are the moving companies that don’t understand their identity, and these are the kinds of moving companies that end up going out of business. I’ve seen it many times, and it never gets easier to watch – going out of business SUCKS.
As a moving company owner you have to understand what kind of moving company you run. Do you run a low-end service provider that competes on price? Or do you run a premium moving company that competes on services, branding, and reputation? If you don’t know the answer to that question and act accordingly, then sooner or later you will go broke. You have to know who your company is, because knowing what kind of moving company you are influences everything from the employees you hire to the pricing strategy you use.
He who doesn’t know his moving company, knows the unemployment line.
There is actually one more type of moving company that I call The Unicorn. I call this type of moving company The Unicorn because I’ve never actually seen it in operation before. The Unicorn is the type of moving company that I’d run myself if I was in the moving business, and I’d love to find a unicorn one day and work with them on their marketing efforts.
The Unicorn is a hybrid moving company that provides both low-end moving services where they compete on price, and also premium moving services where they compete on services, branding, and reputation.
The Unicorn operates in a medium-sized to large city, and they are locally owned. Their goal is to dominate the local market and to out-compete the low-end companies on price and out-compete the franchise players on customer service and reputation.
The Unicorn invests heavily in both his people and his marketing, he is active in his community, and he thinks long term (not 3 years, think 30 years). He sees the vision of the ultimate local moving company and that is what he sets out to create so he can enjoy the fruitful monthly profits for decades and decades to come.
The Unicorn knows his people, him company, and their capabilities intimately, but he also has extreme flexibility and can service any type of move his clientele needs done. He can send two guys on a quick $85 in-house furniture move, he can send two guys on a small $350 apartment move, he can send three guys on a 5,000 square foot house $1,800 move, he can do the $500 two bedroom house move, he can send 4 men on a two-day office move, and he can even send out his most trusted employees on regional long distance moves. This flexibility and capability allows The Unicorn to do insane volume, make a profit on every single move, and keep the cash flowing into his bank accounts, month after month after month.
The Unicorn is flexible with his prices and service offerings and adjusts his bids in the area he’s playing in. When he sees a small apartment move on Thumbtack he bids $65/hour. When he gets a small three-bedroom house moving lead from Billy.com he offers $80/hour with a one-time fuel/travel fee. When he gets a call from AdWords for a five-bedroom house move in the upscale suburb he offers premium moving services for $125/hour. And when he quotes a regional long distance move he offers a competitive flat rate quote that still provides for plenty of profit.
The Unicorn’s intimate and self-aware understanding of his employees and his capabilities allows him to offer many different kinds of moving services at many different price levels. The Unicorn respects his customers and lives to serve them and understand what each type of customer is looking for to satisfy their current moving needs.
The Unicorn model of a local moving company would be an awesome business model and could be very profitable. I have yet to find a unicorn out there, but I’ll keep looking.