To specialize or not?

[Freight Broker]

Like most brokers I offer a wide range of services..local, international, etc...however I've noticed that most of my revenue comes from a much narrower range of services. I'm therefore wondering if cutting out the 80% that makes 20 % of my profits would be a better tactic...I see most other brokers are also "one call does it all" shops... any opinions? Carriers..would like your views too..

 

[whatiship]

Good question.
It can be a little disturbing when we look at our total business and realize that a small percentage of our sales results in the biggest percentage of our profits. The first thing we think is " what the heck are we bothering with all this other stuff when we should just concentrate on what makes the most profit".
Good point, and hard to argue against thinking that way, but take a closer look. You may find that many of the high profit moves came as a result of a connection or contact made through some of the other not so rewarding biz.
I have felt the same way until I realized that without some of the marginal biz I would never have had the opportunity to handle the really good ones.
By all means, try to do more of what makes the most $$$ but keep in mind that the other 80% allows you to keep the doors open and be ready and available to handle the extra profitable ones when they pop up.
The 80/20 rule is not unique to trucking or brokering. Ask any other business and they will tell you the same thing.
Good work on at least understanding where your profits are coming from, that is half the battle and many unfortunately do not have a clue.

 

[loaders]

First question: whatiship, what are you doing on this site at 8:30 on Sat. morning? Seriously though, good topic. It has been my experience to look at all my business transactions as how much effort is extended vs. profit received. Do I want to spend hours on a container move to the Falkland Islands to make a few bucks, knowing that it is only a one time deal, or do I concentrate on the shipper to Cedar Rapids, Iowa, knowing that it is regular business? As whatiship said, don't close the door to the odd ball stuff but realize where your "bread and butter" is and service the hell out of it.