kiwi Posted June 2, 2015 Share Posted June 2, 2015 Where I come from, your net is 1/2 of your gross. I purchase cokes for $.25 at the price club and sell them for $.75. Factor in repurchase of product, gas, taxes, and repairs, and my COGS is around 50%. Are you only vending cans/soda or are you also doing snack machine/s? Link to comment Share on other sites More sharing options...
RJT Posted June 2, 2015 Share Posted June 2, 2015 Are you only vending cans/soda or are you also doing snack machine/s? Also what are you paying yourself? Insurance cost? Stales? Machine cost? In order to grow you cant take 100% of the profit (net) for yourself and not invest it back into the company. You can, but then you are borrowing money to do it and then your "net" goes down paying back the money. If doing drink only accounts that helps if you are doing the smaller accounts but also pretty competitive going against Coke and Pepsi for drink only accounts. One of the main reasons vending companies are able to get vending is because we offer more than just drinks. Link to comment Share on other sites More sharing options...
MidStateVending Posted June 2, 2015 Share Posted June 2, 2015 Are you only vending cans/soda or are you also doing snack machine/s? I do snacks too. Charge $1.00 on everything whenever possible (except crackers). I try to avoid bottled soda because Coke/Pepsi have a monopoly on those margins... but I still have a few machines that sell those too. Also try to only accept accounts that will agree to cancel with Coke so I can put my own machine in, along with a snack machine. I don't do commissions and we are debt free.... if I don't have the capital to purchase a machine or account, I don't. Not saying debt is wrong, but it exponentially increases risk. Growing slow and working hard works for me. Link to comment Share on other sites More sharing options...
EdsVending Posted June 2, 2015 Share Posted June 2, 2015 Sounds like a lot of slow moving accounts. This route is worth no more than 15k pending y he equipment us in good shape. You need to remember that you will have lots of expired product with smaller locations. You might end up throwing away 5-10 dollars of expired product per month per account. Growing a vending business should be done patiently. Link to comment Share on other sites More sharing options...
FrCorey Posted June 2, 2015 Share Posted June 2, 2015 and make sure they are free and clear. no liens or payments due and not owned by another vending company. I have seen people go whole hog and fail, and you know the bank or the vending supplier aint going to ever see their machines again Link to comment Share on other sites More sharing options...
RJT Posted June 2, 2015 Share Posted June 2, 2015 and make sure they are free and clear. no liens or payments due and not owned by another vending company. I have seen people go whole hog and fail, and you know the bank or the vending supplier aint going to ever see their machines again Also make sure the drink machines are not owned by a bottling company. People have been known to do that thinking they where getting the drink machines and they were not. Link to comment Share on other sites More sharing options...
WhiteRoom Posted June 4, 2015 Share Posted June 4, 2015 I am in a similar position as the OP. A couple of points: 1) As I am looking to start in the business, it is a much easier sell for me when I try to acquire new locations to say "I service 25 vending machines weekly, and I would love to provide service for you as well," as opposed to "Can I put my first machine here?" We all have different strengths. Mine isn't cold-selling, and every little edge counts. 2) My time/value isn't really a factor for me as I get started. I expect the work to be tougher and longer hours. I KNOW I could make lot more money today as a burger flipper or bartender, but two or three years from now I can be making better money working better hours as my own boss. I am willing to sacrifice up front (as most entrepeneurs are) for the hope of a payoff down the road. All that being said, I am also trying to figure out what some different routes are worth. The OP found routes that made $22/week. I found some that make $42/week. I understand there are a ton of variables involved, but is there any number or combination of numbers or formula that can help us determine what a route is worth? The seller is asking for one year of gross profits. My thought was that number should be one year of net profits. I would guess we are either both wrong or there is no right answer. Without hijacking the thread too badly, is there a formula we newbies can use to make sure we aren't overpaying for a route/asset? I was in the same position starting out as you state in #1 and #2 above. I purchased a small route of known dogs for right around machine value, and at 1x gross. I knew then even as a newbie that I was overpaying, but didn't feel that I was going to have too much luck convincing people to let me service their location without an ongoing business. Looking back on it, I don't regret starting that way, it was helpful to get to know the business. However, "small route" is the operative word here. That said, these dogs are the ones I will get rid of when I find a buyer or a location for the equipment. Given that I have the time to service them now, and they make money, I haven't felt the rush to get rid of them, but yea, they bug me. I go with 6-9x monthly gross, with adjustments for how bad I want the location, what pricing is like and the value of the machines. The reality is that a location that is in right in your wheelhouse in terms of gross revenue and proximity to your base or other locations is worth more. Link to comment Share on other sites More sharing options...
NYvending Posted June 4, 2015 Share Posted June 4, 2015 This may not be helpful in the OP's position but having purchased two smaller routes recently what I've done to secure my return is on the key accounts the seller introduced me to his contacts at the account and I got new 5 year agreements for placement. On the majority of the other accounts I had them sign 2 year contracts and the smallest ones I simply took on a month to month agreement incase I want to relocate the machines there. Also when doing your site visits be aware if your sharing the vending space with any other vending companies. I put a machine in a large account because there vending company already had 4 machines on site but wouldn't provide them a machine with a credit card reader. I didn't expect my 5th machine to do "well" but I sell more premium products like starbucks drinks than traditional junk food and it still grosses $400/month. Some large scale operations really fall on there face on the customer service side of the business so this week I was talking with the building manager who I've become very friendly with. I always make sure to show my face after I service and ask if there are any service or refund issues she needs address before I go. Most often she says no and once in while she has $6-$10 worth of refund requests. I always give her the cash without a hassle so today she mentioned to me her vending contract with the other company is ending in 3 months and asked if I could replace all there machines once she kicks them out. Link to comment Share on other sites More sharing options...
65tremecgt Posted June 4, 2015 Author Share Posted June 4, 2015 I can post in real time now! Thanks to everyone who responded, I leaned a lot and will continue to watch for and evaluate routes and machines in my area and you gave me lots of info to ask before deciding on a purchase. Any local SD guys have local advise, obviously your also looking for the deals on CL! I see a company post on CL that seems to have lots of inventory and while more pricy than private parties, might be useful for filling a newly secured location quickly. They don't list and address though which is strange. Thanks again! Link to comment Share on other sites More sharing options...
cdreed06 Posted June 12, 2015 Share Posted June 12, 2015 I am also considering a route that is for sale. Owners are asking 75% of gross receipts. About $100,000 gross annually. 42 machines. Does this sound good? I am seriously considering it. Link to comment Share on other sites More sharing options...
moondog Posted June 12, 2015 Share Posted June 12, 2015 I am also considering a route that is for sale. Owners are asking 75% of gross receipts. About $100,000 gross annually. 42 machines. Does this sound good? I am seriously considering it. That's about $200 a month per machine which is a nice average. Unless all the equipment is a Dinosaur you might be onto a good one here and we're not talking about 42 combo machines in 42 locations Give us the breakdown of actual equipment. Link to comment Share on other sites More sharing options...
MidStateVending Posted June 12, 2015 Share Posted June 12, 2015 I am also considering a route that is for sale. Owners are asking 75% of gross receipts. About $100,000 gross annually. 42 machines. Does this sound good? I am seriously considering it. gross receipts? I'm just curious how that works. After one year do you pay the Owner 75000 and then you're done? Link to comment Share on other sites More sharing options...
cdreed06 Posted June 13, 2015 Share Posted June 13, 2015 22 locations 42 machines total. Don't think they are dinosaurs as all have bill acceptors. Have to pay up front, gross income is the 100 grand figure. So 50% less for product and then gas and insurance Yada Yada Yada profit should be around 35 a year. Right? Is it worth it? Not sure on machine types/brands yet. Not sure on machine types/brands yet. Link to comment Share on other sites More sharing options...
RJT Posted June 13, 2015 Share Posted June 13, 2015 22 locations 42 machines total. Don't think they are dinosaurs as all have bill acceptors. Have to pay up front, gross income is the 100 grand figure. So 50% less for product and then gas and insurance Yada Yada Yada profit should be around 35 a year. Right? Is it worth it? Not sure on machine types/brands yet. Not sure on machine types/brands yet. Average is not good at $45.00 per week per machine. Link to comment Share on other sites More sharing options...
cdreed06 Posted June 13, 2015 Share Posted June 13, 2015 OK I'm worried about it. Don't want buy a job I have several of them already. Just thought vending route would be a good fit for us. Link to comment Share on other sites More sharing options...
moondog Posted June 13, 2015 Share Posted June 13, 2015 22 locations 42 machines total. Don't think they are dinosaurs as all have bill acceptors. Have to pay up front, gross income is the 100 grand figure. So 50% less for product and then gas and insurance Yada Yada Yada profit should be around 35 a year. Right? Is it worth it? Not sure on machine types/brands yet. Not sure on machine types/brands yet. Given that you could run this operation in no more than 8 days a month, I'd say it's definitely something worth considering but the equipment is still an issue as bill acceptors can be found on some pretty rough machines. Link to comment Share on other sites More sharing options...
RJT Posted June 13, 2015 Share Posted June 13, 2015 OK I'm worried about it. Don't want buy a job I have several of them already. Just thought vending route would be a good fit for us. It can be a great fit with the right situation just not sure if this particular situation is a good fit. Link to comment Share on other sites More sharing options...
cdreed06 Posted June 13, 2015 Share Posted June 13, 2015 Thank you everybody for the input. Sorry to hijack this thread. I am still mulling this over. Link to comment Share on other sites More sharing options...
allprovending Posted June 13, 2015 Share Posted June 13, 2015 Personally I like all my machines to gross a minimum of 200.00 per month. Just sold a business in Texas and am starting over in North Carolina. In Texas I had 302 locations and 454 machines. I've been going now in NC for about a month and have 33 accounts. Link to comment Share on other sites More sharing options...
EdsVending Posted June 13, 2015 Share Posted June 13, 2015 I always try to pay about 40-50 percent gross sales pending reasonable pricing. However, there are times that there are no opportunities available to grow, which means if you want to grow you have to pay extra. I have a friend who paid 60-75 percent gross sales and now has a company doing over 300k per year. Good luck! I am also considering a route that is for sale. Owners are asking 75% of gross receipts. About $100,000 gross annually. 42 machines. Does this sound good? I am seriously considering it. Link to comment Share on other sites More sharing options...
cdreed06 Posted June 14, 2015 Share Posted June 14, 2015 I really hate to pass this up. Thanks everybody for the input. Link to comment Share on other sites More sharing options...
AZVendor Posted June 14, 2015 Share Posted June 14, 2015 Let us know what you decide to do and how the negotiations go. Link to comment Share on other sites More sharing options...
moondog Posted June 14, 2015 Share Posted June 14, 2015 I really hate to pass this up. Thanks everybody for the input. The biggest pitfall for new vendors is their impatience to get the ball rolling. This first step is critical as to whether you make it or not and you must be prepared to walk away if it appears that something is not right about this deal. Realistically you should be prepared to look at many routes for sale before pulling the trigger. Keep your powder dry if you're not sure and be patient. Link to comment Share on other sites More sharing options...
Anacapa Vending Posted June 14, 2015 Share Posted June 14, 2015 You need to figure out how many days it takes to service this route. If you can do it in 2 days a week you'll do okay. If it takes 4 or 5 days a week after everything is said and done your net profit will be a joke.. good luck Link to comment Share on other sites More sharing options...
cdreed06 Posted June 14, 2015 Share Posted June 14, 2015 Thanks again everyone. I am only looking into this because it is local. One day a week I think. I'll keep it posted as and if it goes along. Link to comment Share on other sites More sharing options...
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