Q&A - How Much Money Do Freight Brokers Need to Pay Carriers?
Episode description
Topics Discussed: Q&A
- How Much Money Do Freight Brokers Need to Pay Carriers
- Partnering with a factoring company
- Finding shippers that will pay you quickly for a discount
Timestamps:
[00:00] How much money do freight brokers need to pay carriers? It all depends on how many loads you plan on moving. If in your first month you plan on moving 10 loads and an average load is $1500, that means you must be invoicing shippers for 15k. We know it takes 30-60 days to get paid. If you get paid 20%, you will need 12k to pay those carries on those loads.
[02:21] Factoring is a powerful strategy because it doesn't require you to have cash or a credit line and provides you with unlimited growth capital. Essentially, your biggest expense is paying carriers and employees, so If you do not want to partner with a factoring company, then you will have to use your own capital.
[03:26] Find a shipper that will pay you quickly by offering a discount. Typically the discount can range from 1-3% of the total price with an invoice payment of 10 days.
[04:48] Example: When I worked with the Department of Defence they would take a 1.5% discount and would pay within 72 hrs.
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