coastalcaregroup Posted May 31, 2016 Share Posted May 31, 2016 Good Morning, I registered for the forum this morning, but have been reading different posts over the last 3 days- since I found it. I am brand new to this business, and am considering purchasing an established route, and am wondering if it is a good deal or not. The info I have per the owner: Price: $8,500 Yearly gross: $11,000 Yearly net: $8,500 200 total machines 150 are in the field = 2 sports blaster bouncy ball machines, 22 8 canister U-turn Candy (3 years old), 126 gumball (most of the gumball machines are single head, some double head, and a couple triple head machines) His wife has been running the route, doesn't know the manufacturer of the gumball machines. Said they are "cast iron base, red metal body plexi bowls with chrome coin mechs". 50 in storage = 39 gumball machines, some are parts machines, some are ready to be placed. 11 8 canister U-turn candy machines. Condition: Did not say. Time: 30 hours every 10 weeks Training and route visits would be an additional $1,500 ($10,000 purchase price instead of $8,500). Otherwise he will hand me the route cards and keys. Since I'm brand new to the business should I pay the extra? I have a friend up north in the business and he said just get the route cards and go. My goal is to make this my full time job right away. Bulk as well as soda/snack machines - one or the other or a combination, either by buying small routes up or buying machines and placing them myself. So back to my original question, is this a good/neutral/bad buy? He also said there are no contracts or agreements? Is this a problem, should I ask people to sign something? If so where can I find an agreement? Anyone that has .02 I would be happy to hear it. Thanks for your time! Link to comment Share on other sites More sharing options...
AmusedlyVending Posted May 31, 2016 Share Posted May 31, 2016 I've been in bulk vending since 1995 and this price seems fair. The machines are on location and already making money. Most of those canister U-Turn machines aren't the best quality, but if they're out there making money then so be it. You can expect to recoup your investment within two years. I wouldn't expect any sooner, but if it pays for itself in a year, even better. You will need storage space for the extra machines. You will need to locate new locations just on attrition alone, as well as getting new locations for the extra machines. What I mean is, expect to lose locations and know that you will have to go out there and get new ones. Locations are lost due to people deciding to get their own machines (especially applies to very profitable locations, unfortunately), people stealing your machines, businesses closing (including businesses closing and taking YOUR machines with them), people changing their mind about wanting or needing machines, and the list goes on. For a turn key operation, it sounds like a good deal to me. If you want to pay the guy $1500 to take you around and train you then you will at least get to see some of the locations in person and you'll get a feel for the traffic and how well they're doing. Someone can always write down numbers and fib about the income. You'll also learn all about the machines and how to maintain them, but you would learn this as you go also. I would lean toward NOT paying the extra money, but maybe visit some of the locations to see what exactly you're getting into. Asking your locations to suddenly sign an agreement may be a bad idea, I'm not sure. Make friends with them if you possibly can. This business is about personal relationships, in my experience. No contracts is actually somewhat normal for bulk vending, but can bite you in the butt if you're dealing with shady people. The seller may be on bad terms with some locations and you won't find out until you've bought the route. When I bought my route in 1995 it seemed as though the seller knew he was about to lose a big chunk of the route, but of course, didn't tell me. After I bought it, I lost 30% of my locations because one franchise business decided to buy their own machines for all 20 locations. That kind of hurt. There's my .02. I hope my experience helps you in some way. Link to comment Share on other sites More sharing options...
AMD Snacks Posted May 31, 2016 Share Posted May 31, 2016 Ok, before all the experience guys figure things out, so far this is what i'm thinking: 8 heads x $10 per head (low figure for 10 weeks) x 22machines x 5 cycles (five 10 week cycles in a year more or less) = $8,800 126 gumballs x $10 per cycle x 5 cycles = $6,360 So even if they were making a littles less than $5 per head per month, which in my mind is really low, you should still be around $15,160 per year gross. That's as far as I've gotten on your question because I don't have enough experience to say one way or the other, i'm just trying to put myself in your shoes and that's my $.02 lol. Maybe the locations just need to be fine tuned and those 8 heads need better homes. Maybe there's some potential, to make it work. Link to comment Share on other sites More sharing options...
QuikVend Posted May 31, 2016 Share Posted May 31, 2016 Without knowing what kind of machines they are and what condition they're in, it will be hard to gauge the value. Plus, chances are he's boosting his sales figures. My guess is it's priced too high. Also, definitely do not pay him to show you the route. Both routes I bought, the previous owner took me to each one or explained any details about each location. Granted, they were less than 20 locations each, I still wasn't charged anything. It's not difficult to fill a machine and collect the $, and definitely wouldn't require $1500 in training. Also, I know alot of people here aren't fans of the uturns. I have about a dozen or on location. Only 1 of the 8 canisters. If you do end up buying this route, I'd take a look at those locations closely. More than likely they're overkill and you can get a smaller machine in there to prevent spoilage. Link to comment Share on other sites More sharing options...
musser Posted May 31, 2016 Share Posted May 31, 2016 Never buy anything vending unless the seller can prove the income by tax returns, bank statements, commission reports, route reports, and the owner goes with you for FREE to show you what he is selling. Believe nothing the seller says. IF the income is really $11,000, the toute isn't worth a nickle over $5500 given the kind of equipment you describe. Find out what the gumball machines are because the uturns suck and unless he has some great looking quality single heads he has nothing. Link to comment Share on other sites More sharing options...
Hillbilly Posted May 31, 2016 Share Posted May 31, 2016 Musser is correct. I will also add that if the current route owner wants to charge you $1500 for taking you on the route and showing you the ropes, then maybe he is thinking he has found a sucker. Best thing you can do is probably run away from this deal. Link to comment Share on other sites More sharing options...
sweetstop Posted May 31, 2016 Share Posted May 31, 2016 the key is whats the 126 gumball machines? if there imports i would pass all together. if they are decent you can get him way down on price. at that price no one is pounding at his door. if he doesn't want to show you around once you agree on a price offer him half until you verify each loc. make your own simple contract/ bill of sale and you both sign. Ive bought many routes this way. if you get him down to 6K that only $40 per loc if there really is 150 locs, less than a locator alone Link to comment Share on other sites More sharing options...
BaneTrain Posted June 1, 2016 Share Posted June 1, 2016 That's insane, 1500 to show you the locations?! I think Hillbilly is right, he wants a sucker and he thinks he found one. Anyone could buy keys off ebay and say I have this many machines etc. If his wife has no idea what they are and she services them, another red flag in my opinion. Oak's and NW's are branded and easy to spot. They might be knock offs like everyone is saying. Ask to sign a non compete clause to show you the locations and if not, run the hell away. Be like Forrest Gump and keep on running lol. Link to comment Share on other sites More sharing options...
coastalcaregroup Posted June 1, 2016 Author Share Posted June 1, 2016 Thanks everyone for the input, it is greatly appreciated! The Craigs List ad (Daytona Beach, FL area C.L.) has $8,500 for an experieced operator to take over, and $10,000 for a new person to the business that requires training and route stops. I would ask to see financials to verify, as well as ask to see the machines to see the manufacturer. If they are all Northwestern machines and the numbers check out, I assume they are a good deal. Generic machines, run away? Link to comment Share on other sites More sharing options...
QuikVend Posted June 1, 2016 Share Posted June 1, 2016 I still think even if they are a brand machine, the asking price might be a bit high. Sent from my SM-N920V using Tapatalk Link to comment Share on other sites More sharing options...
musser Posted June 1, 2016 Share Posted June 1, 2016 No, if the machines are all Northwesterns or Oaks the route is worth $5500 tops. Now as far as training, get up in the morning grab your keys and product go fill machines and get money return home. Link to comment Share on other sites More sharing options...
parrotthead Posted June 1, 2016 Share Posted June 1, 2016 and WHY aren't they making more? sound like to me he's getting rid of the part of his route that doesn't pay. Link to comment Share on other sites More sharing options...
rodney69 Posted June 1, 2016 Share Posted June 1, 2016 Search Uturn on this site. Just an fyi, I have 4 selections I'm selling for 50.00 on cl and still have them and they're in good shape. Like mentioned above, look at it as you're getting locations. Not equipment. If they're running 8 selects, there's an issue. Settings are probably set way high, or they're the older tumblers that don't go down far enough to sell reeses at that right amount. You'll have to carry 10-12 products so you can rotate. Make him take you to EVERY STOP, take quarters with you and check the pmm on each machine. Probably gives out 10 or so. That was Uturns suggested amount about 8 years ago. Then when you reset the settings and give 7 out ( the next lower setting pmms jam a lot and give none up to 5) your Locations that have mostly employee use Will damage the machine or stop using it for about 6 months or get it kicked out because they feel ripped off. The alternative it's to replace the machine with a different one Like a double or so, with different Settings that Make sense, they think it's a different machine sms takes less time for them to adapt. But then what Do you do with the Uturns? Sell them on ebay if you have time and they're in great condition, spend hours cleaning a machine that you're not familiar with just to Sell it. If your time is worth anything, I would count 3-5 hours per machine from puck up to actual sale of each Uturn 8 select, plus it will sell in mint condition for about 120-150 on ebay if you space out the listings too keep the value there. Just my thoughts on that part. Link to comment Share on other sites More sharing options...
PerformaVending Posted June 2, 2016 Share Posted June 2, 2016 $1500 to "teach" you the route? I smell a scam here- learning how to pop the lid on a coin op machine to fill product and pull quarters isn't exactly rocket science. Now, if he was going to teach you the nuances of the business, that might be something- but that's pretty much impossible. If he was any good at vending, he wouldn't be selling a route the way he is. There's just too many mysterious variables here for my liking. Crazy. If it were me, I would walk away. My 2 cents on that one. Whatever you choose to do, good luck! Link to comment Share on other sites More sharing options...
Bravo Duck Posted June 2, 2016 Share Posted June 2, 2016 Good Morning, I registered for the forum this morning, but have been reading different posts over the last 3 days- since I found it. I am brand new to this business, and am considering purchasing an established route, and am wondering if it is a good deal or not. The info I have per the owner: Price: $8,500 Yearly gross: $11,000 Yearly net: $8,500 200 total machines 150 are in the field = 2 sports blaster bouncy ball machines, 22 8 canister U-turn Candy (3 years old), 126 gumball (most of the gumball machines are single head, some double head, and a couple triple head machines) His wife has been running the route, doesn't know the manufacturer of the gumball machines. Said they are "cast iron base, red metal body plexi bowls with chrome coin mechs". 50 in storage = 39 gumball machines, some are parts machines, some are ready to be placed. 11 8 canister U-turn candy machines. Condition: Did not say. Time: 30 hours every 10 weeks Training and route visits would be an additional $1,500 ($10,000 purchase price instead of $8,500). Otherwise he will hand me the route cards and keys. Since I'm brand new to the business should I pay the extra? I have a friend up north in the business and he said just get the route cards and go. My goal is to make this my full time job right away. Bulk as well as soda/snack machines - one or the other or a combination, either by buying small routes up or buying machines and placing them myself. So back to my original question, is this a good/neutral/bad buy? He also said there are no contracts or agreements? Is this a problem, should I ask people to sign something? If so where can I find an agreement? Anyone that has .02 I would be happy to hear it. Thanks for your time! Find out what brand and condition the Gumball machines on location are in. Also the machines in storage. Then report back here. Link to comment Share on other sites More sharing options...
coastalcaregroup Posted June 2, 2016 Author Share Posted June 2, 2016 Find out what brand and condition the Gumball machines on location are in. Also the machines in storage. Then report back here. Will do! (wont be until next week though) Thanks again! Link to comment Share on other sites More sharing options...
PerformaVending Posted June 3, 2016 Share Posted June 3, 2016 Will do! (wont be until next week though) Thanks again! Looking forward to it! Link to comment Share on other sites More sharing options...
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