February 20, 2023
In recent years, the box truck industry has grown significantly, driven by an increase in e-commerce and online retail sales, which has led to a growing demand for delivery and transportation services. The rise of "last-mile" delivery services has also contributed to the growth of the industry, as more and more businesses seek to offer fast, efficient delivery to their customers.
In this article I am going to explore what it takes to start a box truck business and how much profit you might expect to make. I plan to hit on the following topics:
As I walk through these different aspects of the business I am going to use our Box Truck Financial Projection Template as a guide and ultimately to help us forecast potential profits.
Types of Box Truck Businesses
When it comes to the box truck business there are actually quite a few different types of box trucks and different types of businesses that you can start with a box truck. Here are some of the most popular business ideas utilizing a box truck.
Box Truck Business Ideas
- Junk Removal Service
- Moving Service
- Catering/Food Delivery
- Same Day Delivery (Amazon box truck business)
Once you know what type of business you will start, you will need to pick a truck type that works well for your business. Here are some of the different types of box trucks.
Types of Box Trucks
- Basic Box Trucks
- Flatbed Trucks
- Landscape Trucks
- Refrigerated Trucks
- Utility Trucks
Once you decide on the type of business and type of truck, it is time to dive into the financial details.
Cost to Start a Box Truck Business
We estimate that the cost to start a box truck business is between $20,000 and $110,000.
We calculated this startup cost range based on the following expected startup costs:
- Box Truck (New vs. Used)
- Pallet Jack
- Working Capital
How much does a box truck cost?
A new box truck can range in cost from $25,000 up to $90,000 depending on size according to Price Comparison Advisor.
How much is a used box truck?
According to Price It Here, box trucks over two years old can cost anywhere from $12,100 to $24,000, and box trucks over 6 years old can cost as low as $1,650.
How much does a refrigerated box truck cost?
A refrigerated box truck usually will cost an additional $10,000 to $20,000 according to Price Comparison Advisor.
How much does a pallet jack cost?
A manual pallet jack costs between $400 and $1,400 at Home Depot.
How much does an electric pallet jack cost?
An electric pallet jack costs between $2,000 and $3,000 at Home Depot.
How much does box truck insurance cost?
According to FreightWaves Ratings, box truck insurance ranges from $3,000 to $5,000 per year.
For the sake of this article we are going to assume that we are going to drive for Amazon. According to Box Truck Startup, Amazon requires the following insurance:
Box truck insurance requirements to drive for Amazon
- Commercial General Liability: Not less than $1,000,000 per occurrence and $2,000,000 in the aggregate
- Auto Liability: Not less than $1,000,000 per occurrence, including a trailer replacement coverage of $50,000
- Cargo coverage: At least $100,000
- Workers’ Compensation insurance: In every jurisdiction where your company operates
- Employer Liability: Not less than $100,000 per occurrence
Working Capital for a Box Truck Startup
We estimate that a box truck startup should have at least $10,000 in working capital when starting the business.
Working capital will cover fuel, driver food and lodging if required, driver salary until you get paid by your customers and unexpected repair expenses.
Box Truck Startup Costs Example
Below you can see how I entered assumptions for an example Amazon box truck startup into our box truck financial projection template.
You will notice that I added a second truck starting in month 25 of the financial model. I also added 90% financing for the trucks and assumed that we will come up with a 10% down payment for the trucks.
I also added a pallet jack in the fixed asset section:
Finally, I added a personal investment of $20,000 to help cover the down payment on the truck and to go toward working capital.
Next, let’s look at how much revenue our box truck might be able to generate.
Box Truck Revenue
We estimated that a box truck should be able to generate between $150,000 and $350,000 in annual revenue.
There are a few different ways to approach revenue forecasting for a box truck. You could get paid in at least 3 different ways:
- Paid by the mile
- Paid by the delivery
- Paid by the hour
For example, if you are delivering appliances for a retailer to local customers and part of the job is to move the appliance into the house and pick up the old appliance as well, it probably won’t make much sense to be paid by the mile only right? Most of the work and probably most of the time associated with the delivery will be moving the new appliance in and removing the old appliance. If the customer is 2 miles away from the store and you get paid $3 per mile, that won’t make much sense. $6 to deliver an appliance obviously isn’t a sustainable business.
So it is clear that different types of box truck services will be paid in different ways.
In our box truck financial model we opted to use a revenue per hour assumption. We thought this might be the best way for you to think about modeling. So if you are driving longer distances you might be primarily paid by the mile. If you are driving short distances you might get a mix of paid by the delivery and paid by the mile. That being said, we think you should estimate how many miles or how many deliveries you can make in an average hour to calculate an expected revenue per hour.
You can see how we set up the model assumptions below:
In order to help you calculate your expected revenue per hour we found some other key stats that should be helpful.
Box Truck Owner-Operator Pay per Mile
The industry average pay-per-mile is between $1.50 and $2.50 according to 123LoadBoard.
Amazon Relay Pay per Mile
More specifically, Amazon’s load board, Relay, typically pays between $1.21 and $3.09 according to Trison Tarps.
How many hours can a box truck driver drive?
Truck drivers are not allowed to drive more than 60 hours over a 7 day period according to the Federal Motor Carrier Safety Administration.
Box Truck Advertising Revenue
According to Be A Trucker, you may be able to make an extra $500 to $1,000 on your daily route by adding advertising wraps to your truck. This will depend on your route and location though.
Box Truck Expenses
There are a number of expenses required in order to operate a box truck business. In our financial model we give you the ability to include variable expenses that go up and down based on how many miles you drive, how many hours you drive, how many deliveries you make. You can see those below:
There are also some fixed costs like a lease for your truck and costs for a load board. If you are planning to drive the truck yourself then you won’t have driver wages, but if you don’t plan to drive, then your driver wages will be one of your largest expenses. Here is some research that we did to help you estimate your expenses.
Box Truck Driver Salary
The median box truck driver salary in the US is $39,000 per year according to talent.com
How much does it cost to lease a box truck?
It typically costs between $725 and $995 per month to lease a box truck depending on credit score and age of your business according to Trust Capital USA.
Box Truck Gas Mileage
You can expect to get between 8 and 12 miles per gallon depending on the size of your truck according to MyMove.
Load Board Cost
Load boards typically cost between $30 and $170 per month according to FreightWaves Ratings. Free load boards exist but may limit your load searches.
You can see how we enter in various operating expenses into our model below:
Box Truck Business Profit
We estimate that the average box truck owner operator can generate an annual profit of $50,000 to $225,000. You can see based on the assumptions we used in our model we estimated a net income in the first year of $78,000
Finally, I just wanted to clear up some confusion that I see when we were doing our research. ZipRecruiter publishes what they call an owner-operator salary for box truck drivers which they show ranges between $52,000 and up to $300,000 annually for Amazon box truck drivers. I do suspect that there might be some confusion between an owner operator salary and profit. I think $300,000 in annual revenue could be possible, but then you need to reduce that salary by all of your operating expenses to come up with a true profit figure. I find it highly unlikely that a box truck driver would be generating $300,000 in annual profit. You can use our template and play around with the assumptions and see how difficult that would be.
So that being said, I just wanted to make sure that we cleared up any potential confusion between profit and salary and revenue.
For your reference, you can find the numbers from ZipRecruiter below.
Box Truck Owner-Operator Salary
A box truck owner typically makes between $1,000 and $3,461 per week according to ZipRecruiter.
Amazon Box Truck Owner-Operator Salary
An Amazon box truck owner makes between $78,000 and $300,000 per year according to ZipRecruiter.
I hope this has been helpful for you as you consider starting your own box truck business!
If you have any questions about our box truck financial projection template or need help filling it out just let us know!