Rick Falcon Posted March 17, 2013 Share Posted March 17, 2013 I'm looking into this route thats for sale in N.Y its an old Parsal route that was sold to another operator a few years ago. The route has a total of 90 locations half outdoors and half indoors with a total of 230 machines all mach. are N.W and Oak. with .25,.50,.75 mechs. The asking price is 33,000 with 19,000 up front.The route grossed 28,000 last yr. Any advice will be highly apreciated. Link to comment Share on other sites More sharing options...
will.vend Posted March 17, 2013 Share Posted March 17, 2013 Is this possibly T-Bird's old route? Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 17, 2013 Author Share Posted March 17, 2013 Is this possibly T-Bird's old route? Theirs a chance it might have been at one point not sure Will, I think John was east more into Oceanside. Link to comment Share on other sites More sharing options...
musser Posted March 18, 2013 Share Posted March 18, 2013 over priced Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 18, 2013 Author Share Posted March 18, 2013 over priced I was thinking along the same lines,what would you say is a reasonable offer? Link to comment Share on other sites More sharing options...
Rick Posted March 18, 2013 Share Posted March 18, 2013 I'm thinking the 19K they are asking for up front is about what I would pay period. Maybe go as high as 23K if the route is very compact and entirely within my central service area. I'd estimate that would put your ROI at right around 20-23 months assuming approximately $14k-$16k annual NET. Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 18, 2013 Author Share Posted March 18, 2013 Rick I wasnt too far off I was thinking about 20k Im just not crazy about the stops that are outside thats going to kill my gmb. business Link to comment Share on other sites More sharing options...
ransom Posted March 18, 2013 Share Posted March 18, 2013 I'm thinking the 19K they are asking for up front is about what I would pay period. Maybe go as high as 23K if the route is very compact and entirely within my central service area. I'd estimate that would put your ROI at right around 20-23 months assuming approximately $14k-$16k annual NET. This isn't my deal, and I'm pretty new here, so I just want to be sure I understand these calculations. So you're just figuring $65 a machine per year net? From the reading I've done on this site, it sounds like most people try to gross at least $20 a month, which is what, about $14 a month net? Wouldn't that make the net per year about $160 instead of $65? $65 a year net on a machine seems so meager that it's a bit discouraging. Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 19, 2013 Author Share Posted March 19, 2013 I still feel that the best route is the route you put together from scratch I think thats why I never bought into a route I have a 150 locations I probably should have more for the time I have been vending but I guess I like to focus more on quality than quantity. Link to comment Share on other sites More sharing options...
Rick Posted March 19, 2013 Share Posted March 19, 2013 I still feel that the best route is the route you put together from scratch I think thats why I never bought into a route I have a 150 locations I probably should have more for the time I have been vending but I guess I like to focus more on quality than quantity. This isn't my deal, and I'm pretty new here, so I just want to be sure I understand these calculations. So you're just figuring $65 a machine per year net? From the reading I've done on this site, it sounds like most people try to gross at least $20 a month, which is what, about $14 a month net? Wouldn't that make the net per year about $160 instead of $65? $65 a year net on a machine seems so meager that it's a bit discouraging. Hey ransom, In my experience if you were to gross $20/machine a month there's no way you could net $14. Mind you, when I say "net" I'm talking about the money you can pay your rent and cell bill with. Most people starting out make the mistake of thinking that gross minus cost of goods is your net. In fact, I think it's the biggest reason most bulk vendors abandon ship within the first year, because there's a bit of "sticker shock" that happens when you finally realize that your TRUE costs not only include COG (25%) but taxes (11.3% in my home city), insurance (which represents a disproportionate expense per machine when you're just starting out) and gas (if your stops are an average of 3 miles apart and you run an average of 18 city mpg you're spending over 50 cents per location in gas or 2.5% of your gross at a $20 location!). Not to mention that probably at least once every two years per location you're going to run into some sort of major snag (machine stolen at a $50/month loc, broken PMM mech cheated you out of $15 in sales for the month, ants in a machine resulted in a huge loss in revenue for the month - on and on). ALL of this stuff eats into your averages. Assuming 25% COG I think a vendor is still doing VERY well for themselves to net 50% of gross long-term. So the machines on this route are grossing $10.14/month on average - I would estimate that $65 annually is not only realistic...it's on the upper edge of reasonable expectations. Chin up though, right about the time the reality of candy bulk hits you, you'll either quit or discover the wonderful world of bulk toys. Toys are so much less hassle. Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 22, 2013 Author Share Posted March 22, 2013 I knocked the price down to 20k for 90 locations I'm still considering, what do you guys think? Link to comment Share on other sites More sharing options...
Rick Posted March 22, 2013 Share Posted March 22, 2013 So he really said yes to 20K? Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 22, 2013 Author Share Posted March 22, 2013 So he really said yes to 20K? Yes he is in the process of moving I could feel desperation coming on.13k off is a big difference.He is asking for 16 up front. Link to comment Share on other sites More sharing options...
Rick Posted March 22, 2013 Share Posted March 22, 2013 Oh man. This sounds ripe for the picking Rick. If you have it, I'd show up with 14K cash in hand. When he balks (and he will) ask him how many people he thinks are going to come along with this lump sum in the next 12 months...let alone within the next two months - which is his real timeline? I mean really play up the fact that you have the cash right there with you. Show it to him. Cash changes people when they see it right it front of them. $14K would put you right at 12 months ROI (assuming 50% net of gross). And if what you're saying about your service area is true that would be a very good purchase. Also, don't underestimate the possibility of tweaking some of these locs and squeezing that ROI down to 10 months. Link to comment Share on other sites More sharing options...
indiana Posted March 22, 2013 Share Posted March 22, 2013 Oh man. This sounds ripe for the picking Rick. If you have it, I'd show up with 14K cash in hand. When he balks (and he will) ask him how many people he thinks are going to come along with this lump sum in the next 12 months...let alone within the next two months - which is his real timeline? I mean really play up the fact that you have the cash right there with you. Show it to him. Cash changes people when they see it right it front of them. $14K would put you right at 12 months ROI (assuming 50% net of gross). And if what you're saying about your service area is true that would be a very good purchase. Also, don't underestimate the possibility of tweaking some of these locs and squeezing that ROI down to 10 months. This would probably work. You run the risk of nearly guaranteeing he'll take the next offer he's given, assuming someone else is able to bring more than $14k to the offer. You're right though, that probably won't happen. If he's desperate, he'll sell for what he can get before moving. Link to comment Share on other sites More sharing options...
Rick Posted March 22, 2013 Share Posted March 22, 2013 This would probably work. You run the risk of nearly guaranteeing he'll take the next offer he's given, assuming someone else is able to bring more than $14k to the offer. You're right though, that probably won't happen. If he's desperate, he'll sell for what he can get before moving. Funny you say this because immediately after posting that last night I started thinking man, my advice would really make him come off like an a-hole. Maybe there's a softer way to approach it than what I wrote because I agree you run the risk of burning a bridge there. Link to comment Share on other sites More sharing options...
dogcow Posted March 22, 2013 Share Posted March 22, 2013 Funny you say this because immediately after posting that last night I started thinking man, my advice would really make him come off like an a-hole. Maybe there's a softer way to approach it than what I wrote because I agree you run the risk of burning a bridge there. ur advice is sound in my opinion the fact is if u ever sold anything on craigs list be it equipment, locations or routes you find lot of idiots calling saying they want to take a look at the route then oh well im gonna have to go talk to my banker to get a loan for five grand (LOL) and that kind of non sense. craigs list is full of cheapos and tire kickers when I am serious about buying something that I feel is overpriced I am very direct and I say straight up, I am a CASH buyer, not a tire kicker, this is what I can pay and it is what the route is worth, if you want to hold out for more thats your right but when you get tired of the BS on craigs list call me 24/7 and ill be over with cash Link to comment Share on other sites More sharing options...
Rick Falcon Posted March 22, 2013 Author Share Posted March 22, 2013 I like your aproach dogcow,I never bought a route before what would you say are the proper steps Link to comment Share on other sites More sharing options...
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