Deal or No Deal?

[davco1]

I have an opportunity to buy 2/3 of a competitors route. It's 40 locations with 120 machines all Vendstars and Route Pros. The newest location is 5 yrs old. He says it averages $1160 or so /mo net. He wants $11,000, I was thinking of offering $9000. His reason for selling is he is 69 y/o and winding it down.

All comments are welcome and some will be appreciated.

By the way I know that the machines have very little value.

[GagesVending]

I like Route Pros.  I have 20 Vendstars, and even though they are plastic and look ugly, I have to say, I've been impressed by how reliable they've been for me.  I won't buy more, but they serve their purpose.

 

I find it very odd however, that it's only 40 locations, but 120 machines!  Unless some are not on location.  If they are all on location, that'd be 3 triples per location!  Talk about overkill!    The numbers (if honest, at net) look good.

 

For price, IMO is a little high.  Being that they are RoutePro and Vendstar, they are only selling candy, and no capsules.  Some of the locations might benefit from adding capsules, so you could always replace the machine(s) with a small 4 head rack or 1800 to vend toys also.

 

Bottom line:  I'd be interested if I were you, but I'd want to pay more around $6,000.  

[davco1]

The thing is though. These are huge factories and warehouses where you need multiple machines because there's employees all over.

Oh and quite a few are restricted access where you need to sign in.

There's just a couple of retail spots included. I have equipment in reserve that I can put in with .50 mechs and toys.

[GagesVending]

The thing is though. These are huge factories and warehouses where you need multiple machines because there's employees all over.

Oh and quite a few are restricted access where you need to sign in.

Oh.  Okay, that changes everything!  I've serviced those types of sites before, and you're absolutely right!  They typically have many heads and even some bulk candy racks, and those locations do great for candy and nuts.  I was thinking there would be some typical restaurants and such that you could add toys too.

 

Some require wearing eye protection, maybe a hardhat and jacket, and signing in at security.  If you're willing to take longer at each stop walking around to the vending sites, and get a good price, then it might be a good option for you.  I've done it, and I won't have my own route of the industrial sites, but I do know there's good money in it, so if it's right for you, then it could be a potentially good money-making route.

[davco1]

It's my understanding, which my perspective is limited, I've only been at this for a year, that these types of locations are much more stable and consistent over the long haul.

And Gage and anyone else feel free to correct my perception if its wrong.

[GagesVending]

It's my understanding, which my perspective is limited, I've only been at this for a year, that these types of locations are much more stable and consistent over the long haul.

And Gage and anyone else feel free to correct my perception if its wrong.

I'm not sure about what's the most stable venue type, honestly.  I think it sounds like a safe investment. With those employee-used candy locations, it's good to change stuff up every so often.  I have some, and I either move canisters in different positions or add a new candy to a low selling type.  The machines get boring after awhile, so you just need to keep it interesting, in order to keep the numbers up.  I've also done things like add a peppermint patty machine or a Hershey's Nugget machine.  Those are popular for the candy locations, and have a good mark-up.

[Tbuford]

If all 120 machines are in good long term locations and I was wanting to run charity machines I would pay 100 per machine (on location)so his asking price is ok to me, but I'd still try to get it for less. For me charity is to much work for too little money. He will take less than he is asking. I guarantee you that.

[davco1]

T, we're still in the charity realm. We haven't made the jump to bigger, commission type locations. That's actually going to be our next step in building this thing. And the next big question I was going to put on the forum.

We're pretty close to that point. Would the money be better spent buying some racks and trying to secure a couple of commision spots?

And, what's the best way to make that jump?

[Tbuford]

Tough question you need to decide for yourself. I'm sure many folks on here can advise you. Let me think back cause I also started with charity. I bought six 2-way's with po-89's on them. They were not on locations. I got them for $600.00 from some guy who paid like $2500.00 for them from some biz opp shyster. I thought I got a great deal until I called A&A and found that at the time I could have got the machines brand new from & A for about the same money. (half the machines I bought had never been put on a location-they were still brand new). Anyway I did not get ripped like the guy I bought them from did. The hardest part (for me) with charity and bulk commission accounts is getting locations. After I got these six out I bought like sixty locations (from an old man who was quiting)of those three compartment plastic machines for 100 per machine. I wanted the locations and knew the machines were junk (although we still have some of them out 15+ years later). I don't put them out. If one comes off ,location it goes into the dumpster. gotta go, i'll finish answer later

[GagesVending]

T, we're still in the charity realm. We haven't made the jump to bigger, commission type locations. That's actually going to be our next step in building this thing. And the next big question I was going to put on the forum.

We're pretty close to that point. Would the money be better spent buying some racks and trying to secure a couple of commision spots?

And, what's the best way to make that jump?

If you have some good locations now that would benefit from upgrading, and have space for a rack, then talk to them about it.  As long as you didn't make it seem like you're the charity rep, then they understand that you're in business to make money and you can explain to them that they can make money with you too.  (Some of my locations that I've upgraded I still kept at charity because they didn't care) but ask first, or tell them you'll have a different machine for them next time.  I even have a location where I have a 4 way rack, a double head and soon to be a 5 way rack, I pay 25% on the double, will be 25% on the 5 way rack, and charity on the 4 way rack.  If you are honest and fair with them, you can negotiate a fair agreement, most of the time.

[Tbuford]

Tough question you need to decide for yourself. I'm sure many folks on here can advise you. Let me think back cause I also started with charity. I bought six 2-way's with po-89's on them. They were not on locations. I got them for $600.00 from some guy who paid like $2500.00 for them from some biz opp shyster. I thought I got a great deal until I called A&A and found that at the time I could have got the machines brand new from & A for about the same money. (half the machines I bought had never been put on a location-they were still brand new). Anyway I did not get ripped like the guy I bought them from did. The hardest part (for me) with charity and bulk commission accounts is getting locations. After I got these six out I bought like sixty locations (from an old man who was quiting)of those three compartment plastic machines for 100 per machine. I wanted the locations and knew the machines were junk (although we still have some of them out 15+ years later). I don't put them out. If one comes off ,location it goes into the dumpster. gotta go, i'll finish answer later

Gage said what I was gonna say. I began racks by asking restaurants if they would let me put it in the place of my charity machines. I would tell them that they can take their commission and if they want to give their commission to charity then give it to the charity of their choice. This was 15 years when many of the restaurants only had charity machines in my local area. I'll still buy a small charity route now and then if I see an opportunity to put racks in several of the locations. I would not buy racks unless I had a good idea of where I am gonna try to put them unless it's a really good deal on used top quality equipment.