TKK Posted March 20, 2013 Share Posted March 20, 2013 Been looking for 2 months and all get sold like crazy. Anyhow I have about 4 snack machines 1 coke and 2 usi coke and snack setups as well as a fromac combo needing locations. And I have about 13 located. Anyways its very hard to find good locations here. Got an email from this guy he wants to retire he had over 250 machines 10 years ago and sold 3 routes in the last year. This is the last chunk he needs gone. 7 machines drink and snack. 3 locations Yearly gross $21,187 This guy has books and tax records for everything. He's asking exactly that. $21,187. He says its cans only. Which is great he does sell monsters abd waters too. Coke machines are all multiprice. Tomorrow he said I could go w him to fill them up. My worries is getting kicked out of a place like this and over paying crazy for machines. He pays 7% off net in all of them. To top it off he sells small chips for 55c. I sell big bags for $1 and small ones for .75. At that rate I'd be getting my ROI in 2 years. That is way too long. Work my golpher off 2 years to break even. I want to see the equipment too. Say it makes 21k he's probably netting 50% which sucks. I would be interested maybe at like $10,000 and try to raise prices by offering other products. His cans are at .75 which is how mine are as well. Will try to snap some pics without him seeing. The good thing is this guy seems very legit but expensive. Im only interested if it wasn't so damn hard to find good locations here. Link to comment Share on other sites More sharing options...
moondog Posted March 20, 2013 Share Posted March 20, 2013 Been looking for 2 months and all get sold like crazy. Anyhow I have about 4 snack machines 1 coke and 2 usi coke and snack setups as well as a fromac combo needing locations. And I have about 13 located. Anyways its very hard to find good locations here. Got an email from this guy he wants to retire he had over 250 machines 10 years ago and sold 3 routes in the last year. This is the last chunk he needs gone. 7 machines drink and snack. 3 locations Yearly gross $21,187 This guy has books and tax records for everything. He's asking exactly that. $21,187. He says its cans only. Which is great he does sell monsters abd waters too. Coke machines are all multiprice. Tomorrow he said I could go w him to fill them up. My worries is getting kicked out of a place like this and over paying crazy for machines. He pays 7% off net in all of them. To top it off he sells small chips for 55c. I sell big bags for $1 and small ones for .75. At that rate I'd be getting my ROI in 2 years. That is way too long. Work my golpher off 2 years to break even. I want to see the equipment too. Say it makes 21k he's probably netting 50% which sucks. I would be interested maybe at like $10,000 and try to raise prices by offering other products. His cans are at .75 which is how mine are as well. Will try to snap some pics without him seeing. The good thing is this guy seems very legit but expensive. Im only interested if it wasn't so damn hard to find good locations here. That do sound steep TKK The trend I see here, is that all the places where the machines are plentiful have a lack of good locations, while the places where good locations can be found have very few good machines available. It sort of makes sense when you think about it. I'm currently sitting on ten machines; two are my back ups (location ready to go), six are up for sale and the last two are being partsed on Ebay (they work fine but are just too old to refurb in this market), Sure I could locate them somewhere, but I'm out of the business of just locating a machine anywhere and everywhere. Link to comment Share on other sites More sharing options...
TKK Posted March 20, 2013 Author Share Posted March 20, 2013 Yes well my goal is just like 25-28 machines located and making like $50,000 gross doing everything on my own. I'd b netting like $30,000 which would be great while I finish school. I'm closing on my home tomorrow so no more storage. Link to comment Share on other sites More sharing options...
TKK Posted March 21, 2013 Author Share Posted March 21, 2013 ok so i have mixed feelings about this. i went and helpped him out today. i think the whole 3 location route can be serviced in about 1-1.5 hours. one building is like 1000 feet from the other building, they are office buildings, or multiple businesses in one. and one is a pretty big real estate agent training building. its actually 9 machines. they look like generic ones though well atleast the fronts. i think one was a royal multi price, one was a dixie, and 2 usi (serpent looking ones). the snack machines all look in like new conditions, and i think are all usi. so its a total of 5 drink, 4 snack. (one is a side by side that doesnt sell much). 3 locations, all within a mile apart, has been there for over 5 years. he pays 7% off net i believe which is probably low. His prices are way lower than what id have, however, i have way better products, as he vends the small chips (reg cheetos,hot cheetos, lays, doritos, tgif,pretzels,bugles) for .55c. then he has some called salsitas tortilla rounds for .75. pastries, and brownies, for .95-$1 and honey buns .75c. chocolates/starbursts/skittles .95-$1. etc. i know i could raise this up far, and i would be ok i\as i would introduce bigger portions, and different product which has always raised sales in these type of locations. (bigger size hot cheetos,hot funyons, munchies, hot fries, lemon hot cheetos, takis fuego, a ton of mexican candy, etc. keep in mind i DONT sell chocolate, but im thinking of selling snickers for $1 and nothing else. thats why most of my full line locations are accomponied with a bulk tripple that offers pmm and skittles. he showed me records, what he does is he puts projected yearly gross by entering the current months. in total the 3 locations or 9 machines should gross $18,500 ish. the side by side he says does very bad, he kinda over populated that building, so that one would have to go. i learned alot from him as he used to operate 300+ machines at one time. has sold them all except these. he has a casino lounge that makes $14,000 a year in 2 machines but he wants to keep it lol i dont blame him. i liked the way hes organized, which i will do for sure this month when i move into my new home. the only downside is he takes all his chips/snacks with him. i think its way easier to go inside look at what you need and then just take 1-2 crates and stock that. we could have saved half the time for sure, we also stopped at sams twice. hes a very nice man, and wants to retire, plus he has leg problems. if it wears me out i wonder how he does this. i snaged a couple pics, except for the last locaation but they are the same snack machines. no way can i pay $21,000... say his COGS are 50% (he sells water and soda at .75) then i would NET $18,000 in 2 years. leaving the same prices. im sure i can easily increase gross, AND sales by offering my kind of products to COGS 35%. so id make about $23,000 or so Net in 2 years. i was thinking of offering $10,000. and going maybe up to $12,000. however i might offend him, as he seems very set on price. he also fixes coin mechs,bv, motors, etc authorized usi parts. how should i go about this? i can pay the $10-$12,000 without getting a loan. anything over that i cant do, he also said he wouldnt mind selling each location individually for the same price. i think at $12,000 if i change them to my products, i will have my ROI in 1 year. which is what makes sence. anyways heres some quick pics, im gonna look into a cargo van it sooo much easier! if only i could find locations! i mean im getting good deals on equipments ($250-$400 per soda and snack machines) with $12,000 i could easily get 24-35 machines. but in a damn garage! Link to comment Share on other sites More sharing options...
moondog Posted March 21, 2013 Share Posted March 21, 2013 This decision may ride more on your lack of good locations in your area than any calculation. Using my formula, I'd offer 12K - that's too far short of 21K to really entertain any negotiation. If it were me, I'd tell him that I'll "think about it" and let him dangle for a couple of months. It sounds like the situation in El Paso is a little different than here so that might not work for you. Ps. Salsitos sell pretty good once people try them and they've got a 5 month shelf life. They're not super spicey but they've got some avocado in them so you should find several people in each location that will prefer them. They come in a 2 oz bag so you should have no problem getting a buck for them - cost is the same as Lay's LSS size. Link to comment Share on other sites More sharing options...
TKK Posted March 22, 2013 Author Share Posted March 22, 2013 thanx moon dog. well i offered him $10,000 and said maybe we can work something out. im expecting him to come back at maybe 18 and then ill go up to 12. if not ill pass. he said that because of his legs, he usually gets someone off the homeless shelter, and pays them $5 an hour to do most of the work (he fills the machines) but they haul the cases of cokes in the dolly etc. so since i only work 1 day a week lol, i told him i could help him instead of having homeless people running it. id probably charge like $7 an hour, and if he wants me to run it i would too (buy product etc) obviously for alot more $. im guessing that would make me an extra $300+ a month and i can go locate as well. or idk haha what am i even saying. Link to comment Share on other sites More sharing options...
AZVendor Posted March 22, 2013 Share Posted March 22, 2013 TKK, Hopefully you can work something out that is profitable for both of you. Just an FYI, the snack in the fourth picture down is the newest one you are showing. It could be as old as 1998, when the first F80 control boards came out with the red display, but probably more like 2003 when the first GF23s came out (the fourth pic is of a GF23). The other thing I'm wondering about is your aversion to selling chocolate candy bars. They are a staple in vending and I would be surprised if you didn't have a lot of requests for chocolate. I see chololate in his machines and you would have quite a backlash if you removed it. Bulk candy is not a substitute for what the customer wants. Just because chocolate is the highest cost candy items you will buy, only means you should be sure your prices are high enough to cover the cost and make the profit you want. If your aversion is because of product handling and storage issues, that's just part of the business that you have to deal with. Just my opinion. Link to comment Share on other sites More sharing options...
TKK Posted March 22, 2013 Author Share Posted March 22, 2013 The thing is I offer a lot of other products not many local vendors offer. I think that offsets people wanting chocolates. I HAVE tried chocolates. Kit Kat, reeses, snickers, Hersheys. And they were my lowest selling items for sure. I would sell them at $1. I couldn't see them selling for $1.25 even though that's what I see. I'm sure I could post a note as he has a note on the snack machines stating he's retiring and location is for sale. I was thinking if I buy it to put new vendor new products.. and put prices include taxes and are more affordable and convenient than your nearest gas station. I might do chocolate again but I definately have all my machines with no empty spirals and no doubling. Well most of the time. I offered him 10k. He just replied I thought he was offended since he took longer. He said he's not offended at all and thanx for the cheap labor lol since I ran his route prety much for a hotdog and coke. He then put "as for your offer, are you in anyway negotiable"? Link to comment Share on other sites More sharing options...
AZVendor Posted March 22, 2013 Share Posted March 22, 2013 I certainly can't argue with the success you're having, TKK. If no chocolate works well then keep it up. The notes on his machines does make it easier for an account to understand that they will get a new operator who will do things differently. Some of the customers probably have ideas of what should be changed and some may be fearful that they won't like the changes. Most probably don't even care. This is good for you, especially if you offer different products that they don't have now, like the large chips that you can get more for. It may take some time, but you should be able to get prices up to where you want them with some creative merchandising. Negotiate away! Link to comment Share on other sites More sharing options...
TKK Posted March 24, 2013 Author Share Posted March 24, 2013 So he said he could do half down and the rest in 12 months. I offered $7,000 cash and $400 a month totaling $11,800 Link to comment Share on other sites More sharing options...
AZVendor Posted March 24, 2013 Share Posted March 24, 2013 This sounds like a very fair offer, good luck. Link to comment Share on other sites More sharing options...
TKK Posted March 24, 2013 Author Share Posted March 24, 2013 Wow o really thought he was firm. This is what he replied with. From my $11,800 offer. $7,000 down and $400 a month. We are getting closer. I will counter w/$14,000.00. $7,000.00 down and 24 payments that will include the balance of $7,000.00, the cost of the remaining inventory, escrow in the coin mechs, reasonable interest and a 30 day parts and labor warranty. I will have my attorney prepare a binding agreement. This is my best and final offer. Bert I told him $7,000 and $250 a month for 2 years. That would make it $13k. I think ill stay at that. Link to comment Share on other sites More sharing options...
adog Posted March 25, 2013 Share Posted March 25, 2013 Wow that's nice. Sounds like he is running on fumes. To only counter with 1000 dollars more. If he you could score it for 13k thats almost 10 k off from the asking price. Some times low offers are worth the risk of insulting I guess lol! Link to comment Share on other sites More sharing options...
spdydre Posted March 25, 2013 Share Posted March 25, 2013 What I realize with buying routes is to negotiate and be patient sometimes the seller gets desperate and will eventually sell for alot less than the original price especially if they want out of the business or it is a must sell option or they lose money. The first small route I bought the guy started out at 15k it was grossing around 18k+ a year. I waited him out for about 6/7 months and he eventually sold it to me for $4000 LOL. Link to comment Share on other sites More sharing options...
TKK Posted March 25, 2013 Author Share Posted March 25, 2013 Awesome! He said let's do this! We agreed on $6000 down and $7000 at 292 a month for 2 years. He said what I want to do with product and escrow and contract? My thing is how can I do it so if for any reason I start keeping the accounts...for example what if its almost paid off and something happens how can I protect myself from him taking the locations or machines since I haven't paid them off? Should he do seperate pricing so say once I paid $9000 I have paid some machines? I wouldnt want to pay money and not own them Link to comment Share on other sites More sharing options...
moondog Posted March 25, 2013 Share Posted March 25, 2013 Awesome! He said let's do this! We agreed on $6000 down and $7000 at 292 a month for 2 years. He said what I want to do with product and escrow and contract? My thing is how can I do it so if for any reason I start keeping the accounts...for example what if its almost paid off and something happens how can I protect myself from him taking the locations or machines since I haven't paid them off? Should he do seperate pricing so say once I paid $9000 I have paid some machines? I wouldnt want to pay money and not own them As long as you make your payments on time it would be a breach of contract for him to step back in. Even if you default it's going to take some legal action on his part to repo them. This does not mean that somebody else couldn't move in on the account in the meantime as the only tangible part of this sale are the machines. You could try to structure the contract where future payments are conditional upon "Good Will" (the value of the locations minus the equipment) but I doubt he'd go for that as he'll have no control over how effectively you'll manage these accounts. If you do lose these accounts, you're still going to be liable for the balance of the contract. Buying on credit is a double edged sword - if you default, you lose everything you've put into it (just like buying a car). Link to comment Share on other sites More sharing options...
AngryChris Posted March 26, 2013 Share Posted March 26, 2013 I worked a deal with another vendor that works out great and it is similar to this. As long as you don't breach the contract, you could be having a great deal. One thing has been pressing me.... I would love to know how you are going to "net" 30k out of 50k in gross sales! That's pure insanity! Link to comment Share on other sites More sharing options...
TKK Posted March 26, 2013 Author Share Posted March 26, 2013 Makes sence I'm going to go for it will update once I do. I hope sales are what he says ill change products too. As far as net I meant net sales I'm at 40% cogs Link to comment Share on other sites More sharing options...
AngryChris Posted March 26, 2013 Share Posted March 26, 2013 Makes sence I'm going to go for it will update once I do. I hope sales are what he says ill change products too. As far as net I meant net sales I'm at 40% cogs Ah. That makes a little more sense then. I thought you were returning a 60% profit. I believe that 50-60% COGS is pretty common in my area. I am at 55% COGS myself. Link to comment Share on other sites More sharing options...
TKK Posted March 26, 2013 Author Share Posted March 26, 2013 I'm a little lower like 35-40% cogs. Link to comment Share on other sites More sharing options...
AngryChris Posted March 26, 2013 Share Posted March 26, 2013 I'm a little lower like 35-40% cogs. I would have to sell bottles at $1.75+, cans at $1.00+, pastries and candy at $1.25+, cookies at $1.00+ to get anything near that. Are you sure your cogs are that low? Link to comment Share on other sites More sharing options...
TKK Posted March 26, 2013 Author Share Posted March 26, 2013 Yes. Average. Sodas at .75 cookies at $1 chips at $1 nutty bars at $1 pastries at $1.25 etc. I do sell Mexican chips and candy which lowers my cogs. I buy the chips at .28 and they sell for $1 and the takis chips are .43 sell for $1.25. I'm going to start selling water which should keep my cogs stable. Link to comment Share on other sites More sharing options...
TKK Posted March 27, 2013 Author Share Posted March 27, 2013 Ok so he wants to charge an interest on the loan and $150 for the escrow coin and inventory at cost. I offered $500 more to keep escrow and interest fees I think interest is too complicated as every month my interest would come down. Now I will use like 70% different product. Do you guys think I can get the boot for changing it up? Link to comment Share on other sites More sharing options...
dogcow Posted March 27, 2013 Share Posted March 27, 2013 Ok so he wants to charge an interest on the loan and $150 for the escrow coin and inventory at cost. I offered $500 more to keep escrow and interest fees I think interest is too complicated as every month my interest would come down. Now I will use like 70% different product. Do you guys think I can get the boot for changing it up? u need to work with the location if u plan on changing products. Link to comment Share on other sites More sharing options...
TKK Posted March 27, 2013 Author Share Posted March 27, 2013 How would u go about it? There have been for sale signs on them for a while saying the owner needs to retire Link to comment Share on other sites More sharing options...
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