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Tips when buying a route?


lukey

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After a lot of planning and consideration, I've decided to jump into the bulk vending game. 

I'm a newcomer to this and I know that my biggest struggle will be working up the courage to make a sales pitch to new locations. That said, I do have a fair chunk of cash to invest, so I was thinking of starting off by simply buying an established route. The fact that I already operate a number of machines seems like it might make the sales pitch a bit easier.

I have found one in particular that seems like it might be a good fit. The ad is as follows:

Quote

 

i have around 20 vending machines all in locations that makes about 400 a month . plus i have about 7 extra machines . They are all restocked with candy and the locations are in ***** and ****** . Asking 5000

 

The first concern I have is whether an ad like this presents any red flags. Are there any common scams involving the sale of routes? What information should I be asking for to make sure everything checks out?

Finally, does buying a route include a transfer of ownership of the machines themselves, or am i simply paying for the rights to service them?

Any answers, advice or resources you might have would be greatly appreciated! 

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There is two ways to look at this:

I'm assuming $400 a month GROSS - not NET - $400 Gross - (30%) Product Cost = $280 Net

1) Return on investment (ROI):  Payback should be 12 - 18 months - this route comes in at 18 months - 12 months = $3360

2) Cost to duplicate:  Assume you hire a locator: $65 each and purchase a machine $120+ each = $3700

I'd offer $3700 if he has 100% proof of income and the machines are named brands

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4 minutes ago, bhfisher said:

There is two ways to look at this:

I'm assuming $400 a month GROSS - not NET - $400 Gross - (30%) Product Cost = $280 Net

1) Return on investment (ROI):  Payback should be 12 - 18 months - this route comes in at 18 months - 12 months = $3360

2) Cost to duplicate:  Assume you hire a locator: $65 each and purchase a machine $120+ each = $3700

I'd offer $3700 if he has 100% proof of income and the machines are named brands

Hey thanks a bunch! This is tremendously helpful. What should I be looking for when it comes to proof of income?

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Collection records - not excel sheet but hand written records

  • Bank Deposits
  • Income Tax Schedule C
  • Charity Sticker payments
  • Candy Purchase Receipts
  • Maybe City License Fees

If he tell you there is no records and it's under the counter income, pays no income taxes, I would highly discount route.

Hint: Your route is a business, run it like a business from first day. Run it like you plan to sell tomorrow.

If they cheat the government, they will cheat you 

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