Selling routes

[HotOiler3]

I'm curious why you see very high dollar routes being sold, what are the reasons people have spent all this time building a successful route only to get out of it?  What pitfalls in the business would drive someone to gross a quarter million a year only to sell for $150,000?    Or even the smaller routes or lots of 25 machines or so?    What makes people decide after seriously getting into the business, to get out of the business?   I think the answers would be worth consideration to those just first getting into vending, including myself.

[The Mage]

Honestly there are a billion reasons.

For some people, they find it just doesn't fit their lifestyle. This business isn't for everyone.

 

Sometimes priorities change. People retire, move, need more time in their life, or even have achieved their goals.

 

For some people they practically sing while working, because they love vending, but for others, it has become a job, and they dread getting out of bed, and seeing another machine. That's just the nature of things. We are all different people, and need to find our niche. 

 

Many people got in through a BizOp, and sometimes it's hard to recoup your investment if you overpaid for the machines and locations. These are the most frustrated vendors, and the ones who don't know what their route is worth, and try to sell out at a ridiculously inflated price.

 

When I bought a route, the person only did it as a hobby after retirement, and to hang out with his friend / business partner. But his partner passed, so his interest plunged. Hanging out with his friend was what he wanted, and then it changed to him doing all alone. That wasn't his goal, so he got out.

 

By the way, I do notice a type of thinking in your questions. Like me you seem to be the person who over-thinks things. That old analysis paralysis. Constantly looking for why that "something" won't work, or putting off actions because you believe you need just a little more information.

 

There are 2 types of people in this world, those that act without thinking, and those that think without acting. The goal is to get to the center of those extremes.

 

I always say to start off with a few machines, and test out the waters. If it's not for you, you can always get out before spending a ton of money. But if it is working, then expand at whatever rate is comfortable, and affordable to you.

 

The only reason for you to do this, or not to do this lies with you, not anyone else. If you don't have a reason to quit, try not to go searching for one.

[snack dude]

Or in the case of yours truly, You have medical issues and you decide that other things are more important 

[HotOiler3]

I'm not just thinking, I'm ordering a 4 column sticker machine as soon as my bank stops messing around, probably in the morning, bought 2 vendstars and placed one of them today, and tonight I made an honor box..... It might not be as full steam as I'd like it, but I'm not just thinking, I'm doing.

 

I realize there are alot of reasons one could sell a route, I guess I was curious is there is some kind of "wall" that is hit once you get so big, like your route is so big that one man cannot handle it, and yet it doesn't net enough to hire a hand..... That sort of thing, like I said, pitfalls that might be common.   Thanks for your input you guys,

[Rick]

Hey HotOiler, where are you finding these routes?  There are no LARGE routes for sale in my area and for the most part, haven't been in the last 3 years.  Believe me, I've been keeping my eyes on it.  

 

To answer your question though, the deeper I get into bulk vending the more I realize there's a "sweet spot" for the individual vendor that's capped at about $10,000/$15,000 a month.  Granted, there's hundreds of variables that could influence that number one way or the other but, generally speaking, a route of $200,000 a yr. gross is about the max a single bulk vendor can manage on his own.  At that point you simply run out of hours in the day. So you're faced with a decision of either "it is what it is" or hire help.  The problem with hiring help is you truly take a HUGE step back in net % once you introduce payroll expenses, insurance, fleet vehicle maintenance, etc.  When you run the numbers you begin to realize that what you were putting in your pocket as an independent vendor at $180,000, you'll need to gross $400,000 with only a couple of employees to net the same amount.  

 

Another thing working against taking that leap from being a mid-sided 1 man operation to becoming one of the big multi-state operators, is it's also right about this time people realize there's just easier, more passive ways to make money.  Mainly what I'm referring to is real estate, but that's a whole other post.  In short, bulk vending is a GREAT business for the do-it-yourselfer to earn an honest living.  But once you grow to the point of wanting more from your money - there's just easier ways.  Also, I think most of us are entrepreneurs at heart and there comes a point where boredom sets in, vending has served it's purpose and you're ready for the next challenge.  

[HotOiler3]

Hey HotOiler, where are you finding these routes?  There are no LARGE routes for sale in my area and for the most part, haven't been in the last 3 years.  Believe me, I've been keeping my eyes on it.  

 

To answer your question though, the deeper I get into bulk vending the more I realize there's a "sweet spot" for the individual vendor that's capped at about $10,000/$15,000 a month.  Granted, there's hundreds of variables that could influence that number one way or the other but, generally speaking, a route of $200,000 a yr. gross is about the max a single bulk vendor can manage on his own.  At that point you simply run out of hours in the day. So you're faced with a decision of either "it is what it is" or hire help.  The problem with hiring help is you truly take a HUGE step back in net % once you introduce payroll expenses, insurance, fleet vehicle maintenance, etc.  When you run the numbers you begin to realize that what you were putting in your pocket as an independent vendor at $180,000, you'll need to gross $400,000 with only a couple of employees to net the same amount.  

 

Another thing working against taking that leap from being a mid-sided 1 man operation to becoming one of the big multi-state operators, is it's also right about this time people realize there's just easier, more passive ways to make money.  Mainly what I'm referring to is real estate, but that's a whole other post.  In short, bulk vending is a GREAT business for the do-it-yourselfer to earn an honest living.  But once you grow to the point of wanting more from your money - there's just easier ways.  Also, I think most of us are entrepreneurs at heart and there comes a point where boredom sets in, vending has served it's purpose and you're ready for the next challenge.  

EXACTLY the type of answer I am looking for.    Thank you Rick!      I can send links to these routes for sell as I see them if you'd like?   I think the most expensive one's I've seen were in California, but I've seen several all over the country for tens of thousands of dollars

[Makes Cents]

I'm curious why you see very high dollar routes being sold, what are the reasons people have spent all this time building a successful route only to get out of it?  What pitfalls in the business would drive someone to gross a quarter million a year only to sell for $150,000?    Or even the smaller routes or lots of 25 machines or so?    What makes people decide after seriously getting into the business, to get out of the business?   I think the answers would be worth consideration to those just first getting into vending, including myself.

 

Sometimes its a business model.

I have a guy around me, he builds routes, pays equipment off, runs it for a year then sells it for a year and a half net plus machine replacement cost. He sells 5-6 of these a year and he has no trouble selling these, usually to newbies.

 

also,

 

Many times large vendors will split part of a route and sell off a portion. Its good to watch out when your looking at these types because many times they are selling their lower producing locations.