You can have the best product or service, but if you are unable to sell it, there is no business. That’s why – especially if you have your own authority – you should learn about proper pricing for your service and how you can strengthen it.
Because loads are posted online, many owner-operators allow the customer – the broker – to set the price. Yet in most business transactions, the service provider sets the price, and the customer decides to pay it or not – or to negotiate.
So as an owner-operator – a service provider – you should have a written pricing structure in place. You should have multiple levels for shorter- or longer-mileage hauls, certain lanes or certain cities.
All pricing should start with your operating expenses – what it costs to run the truck and trailer per mile. If you don’t have an accounting system that allows you to track income and expense on a per-mile basis, that is step number one.
Once you know how much it costs to run your operation, determine a profit margin – what you want to make above your costs. Do you want to make 60 cents per mile? Would you be happy with 50 cents?
With those numbers determined, you now can price your service and continue to fine-tune it. You may find that certain lanes are more expensive because of fuel or other costs. You may see that it’s harder to find good-paying freight coming out of certain cities or regions, so you may want to charge more to go to those locations. You may want to discount certain cities or lanes because you know you won’t have any trouble finding another load once you’re there – or simply because you like traveling in those areas.
Now, just because you set a price doesn’t mean anyone will pay it. The nature of the free market is that your competitors might outbid you.
