jharper2346 Posted January 17, 2013 Share Posted January 17, 2013 I know these is a topic a few things down about evaluating routes in general, but I would like some feedback on these specific routes. I have been looking to get into the business and have found two routes for sale near me. I am hoping you guys can help me value these routes and tell me if either looks attractive. Route 1: Asking Price: Approx $22k This one comes with 11 Machines and 6 Pepsi owned machines at 9 locations. The machines that he owns are: 1. Dixie Narco -3D 2. Automatic Products Snack Shop 7600 3. Rowe International 5900 4. Dixie Narco - 3D 5. Automatic Products Snack Shop 4600 6. Snack Mart III 7. USI 3085 8. Snack Mart II 9. Automatic Products Snack Shop 4600 10. Rowe International 5900 11. Antares Combo Soda & Snacks I tried to research the Dixie Narco 3D but I'm not sure what that is. Anybody know? From May through October, the machines averaged about $2,000 in revenue and no commissions are paid. This commission amount has not been verified and I am not sure how you even would do so? Route 2: Asking price: Approx $40k These are all coke or pepsi owned machines. There are 19 coke machines and 7 pepsi machines. These machines are all on location and bring in about $3500-3700 in revenue per month, according to the seller but again not verified by me. Was told that half of these pay a commission of approx $.05 per can.. If you guys need any other info then let me know. I appreciate any feedback you can offer. Thanks in advance! Link to comment Share on other sites More sharing options...
ruff84 Posted January 17, 2013 Share Posted January 17, 2013 Price for either route? Link to comment Share on other sites More sharing options...
jharper2346 Posted January 17, 2013 Author Share Posted January 17, 2013 The first is asking about $22k and the second is asking about $40k. I'll update the OP with this info. Link to comment Share on other sites More sharing options...
moondog Posted January 17, 2013 Share Posted January 17, 2013 I don't see either option as being something I'd consider purchasing. The first option has a variety of older snack machines, 2 Dixie 3D 501E multipriced soda machines* and 6 Pepsi owned machines and grosses 2K a month - that's a lot of work for a rough profit of 1K a month which you get to pay 22K for and you become a third party vendor locked into Pepsi (more on that later). The second option, with a rough profit of $1,800 a month, allows you to service 26 third party machines a month, and you own nothing for only 40k? I doubt it. Third party vending is a program where bottlers supply you with equiptment in exchange for buying product exclusively through them at a slightly inflated cost with minimum ordering requirements of 20 to 26 cases per months - that's about 800 cans per machine per month. * The 3D refers to a special graphics front that appears to be some sort of hologram. I doubt if it's exclusive to Dixie but I've seen some on the 501e models. I look for locations that gross $500 to $1,000 per month with 2 machines ( Soda & Snack ) and pay between $3,500 and $5,000 for them depending on the actual gross and equipment. They don't come around everyday but they're out there. Link to comment Share on other sites More sharing options...
jharper2346 Posted January 17, 2013 Author Share Posted January 17, 2013 Yeah, I definitely knew both were overpriced to begin with, but I'm wondering if either would be a good deal at a certain price. If there is one, what is that price? What is the approx value of the 11 machines listed in the first deal? Also, would you consider that deal if you placed your own soda machines and had the 6 Pepsi owned machines removed? Thanks! Link to comment Share on other sites More sharing options...
moondog Posted January 17, 2013 Share Posted January 17, 2013 Yeah, I definitely knew both were overpriced to begin with, but I'm wondering if either would be a good deal at a certain price. If there is one, what is that price? What is the approx value of the 11 machines listed in the first deal? Also, would you consider that deal if you placed your own soda machines and had the 6 Pepsi owned machines removed? Thanks! I'm going to use Mission's valuation here as you've got third party machines involved. His equation is 10 months gross less 10% - 20% based on things like equipment condition, verifiable revenue and contracts in place. I'd guess that Mission would come in around $8,000 on the first option and around $15,000 on the second (assuming he'd consider it). The formula I use is fair value of the equipment plus 3 months gross, but since so many of these machines are not really part of the sale, my formula wouldn't work too well. It's actually kind of interesting how close we normally come on typical (non third party) location evaluations using our different formulas. Link to comment Share on other sites More sharing options...
moondog Posted January 17, 2013 Share Posted January 17, 2013 Yeah, I definitely knew both were overpriced to begin with, but I'm wondering if either would be a good deal at a certain price. If there is one, what is that price? What is the approx value of the 11 machines listed in the first deal? Also, would you consider that deal if you placed your own soda machines and had the 6 Pepsi owned machines removed? Thanks! The second part of your question; I'd figure the value of the 11 machines in option 1 at $6,500 to $7,500 based on their condition. I'd definitely use my own machines in any scenario - that extra 5 cents a can and the inability to stock the machine with off-brand products makes third party vending a "no-go" for me. Good soda machines just don't cost that much. Link to comment Share on other sites More sharing options...
jharper2346 Posted January 17, 2013 Author Share Posted January 17, 2013 Thanks for the detailed replies, Moondog. What is the cheapest & easiest way to get a machine moved from one location to another for someone like me without the equipment? I have access to a truck, but nothing else right now. Should I just buy some sort of ramp/dolly or is there an easier way to get this done? If the first option, do you know of any particular types that work well and aren't too expensive? Any other ideas would be greatly appreciated. Link to comment Share on other sites More sharing options...
moondog Posted January 17, 2013 Share Posted January 17, 2013 Thanks for the detailed replies, Moondog. What is the cheapest & easiest way to get a machine moved from one location to another for someone like me without the equipment? I have access to a truck, but nothing else right now. Should I just buy some sort of ramp/dolly or is there an easier way to get this done? If the first option, do you know of any particular types that work well and aren't too expensive? Any other ideas would be greatly appreciated. Unless you're incredibly muscle bound you'll need to locate a machine mover in your area. These machines weigh at least 600 lbs and while there are some vendors on this forum that do move their own machines, they always have at least a commercial grade appliance hand truck and HELP. The pros will have a lift gate on their truck, the hand truck and various other equipment to do this efficiently and SAFELY. Occasionally I move a snack machine by myself but I remove all the shelves before attempting this - no way would I take on moving a soda machine. Link to comment Share on other sites More sharing options...
treadmill Posted January 17, 2013 Share Posted January 17, 2013 Leave the moving to the professional movers. They know all the tricks to move soda machines. Link to comment Share on other sites More sharing options...
ruff84 Posted January 17, 2013 Share Posted January 17, 2013 I would never buy the 40k option because your really just paying for hopes and dreams. After 40k u still don't own the machines. You gonna be better off just buying a few used machines for 1500 total and getting them places then doing that again. Link to comment Share on other sites More sharing options...
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