thoughts on these locations for sale

[northernvavending]

Here is a link to a Craigslist ad that I would love to have some expert analysis for.  I emailed this person about a month ago about it.  At that time they wanted $30,000 for it and said it grossed between $800 and 1500 a month.  Given the net from that I thought it was overvalued and never really followed up.  It was reduced to $25,00 a few days ago and now is down to $20,000.  Another more recent ad also claims it nets $500 a week.  Any thoughts would be greatly appreciated.  I am doing some bulk machines and want to get into full line vending.  Over the next four or five years I hope to build a full time vending business.  This might be too many machines to start out with, but if the price is really right I might consider it anyway.  Thanks for any responses.  

 

http://washingtondc.craigslist.org/nva/bfs/3929236289.html

 

[Feral Vending Mechanic]

Run away screaming. Not worth it at all. That price is over a thousand dollars each for a bunch of really crappy combo machines. 

 

It's not too many machines to start out with. It's too many crappy insanely overpriced combos to start out with.

 

A month ago, he was claiming it grossed 800-1500 a month. Now he's claiming it nets 500 a week. Something doesn't smell right.

[northernvavending]

Thank you - that is what I thought, but wanted to make sure.  I really appreciate you taking the time to respond.

[moondog]

Run away screaming. Not worth it at all. That price is over a thousand dollars each for a bunch of really crappy combo machines. 

 

It's not too many machines to start out with. It's too many crappy insanely overpriced combos to start out with.

 

A month ago, he was claiming it grossed 800-1500 a month. Now he's claiming it nets 500 a week. Something doesn't smell right.

Amen,

 

This guy is either dumping his dregs or got sucked in real bad because he didn't do his homework.  I would not want 6 locations that only averaged $250 a month for any price and I definitely would not want most of his equipment.

 

This has got to be one of the worst deals I've seen in awhile.

 

Bottom line - you don't want this route at any price

 

 

[mission vending]

There are some decent machines in there, not great, decent. Like feral said the inconsistency in.bb the numbers is VERY concerning.

I'd ask for proof of sales, bank deposits or tax returns. I'd also bet a ton of cash on the fact that there won't be any verifible records. Without proof of income you are only left with value of machines, inventory and locations.

Something along 10-12K would be my BEST offer, if, after looking at the machines and locations I am getting a warm fuzzy feeling.

[orsd]

lowball him at the last minute

[Feral Vending Mechanic]

To be fair, he has a couple of good pieces of equipment. The GPL in picture six is decent. As is the soda machine in picture six. But those combos... ugh.

 

Also, it seems as though he is counting the combos as two machines each. Which is disingenuous, to say the least.

 

Additionally, empty spirals, missing labels and handwritten labels. Sloppy, sloppy. ( Perhaps I am a perfectionist, but I'm not even an owner, just a mechanic and I always try to ensure the machine looks as good as it possibly can. Handwritten and missing labels are a particular pet peeve of mine. It only takes a few minutes, a halfway decent printer, and a Google image search to make presentable labels. )

[Vendors Tech]

I agree, stay away.  Most of those machines are no good.  If he's working one day a month, they are not large commercial accounts, or he does a terrible servicing and they would always be empty.  A "large" commercial account will need serviced AT LEAST once a week for a decent one.  You will constantly have problems with those combos and those USI branded machines.  Move on, or look over the accounts in person, and offer based on what you feel they are worth from there.  The machines in their present physical condition, and assuming they are all working, I would value at only $5000 max.  Those combos and USIs are basically worthless, unless you were to resell them to someone who is a sucker. 

[moondog]

There are some decent machines in there, not great, decent. Like feral said the inconsistency in.bb the numbers is VERY concerning.

I'd ask for proof of sales, bank deposits or tax returns. I'd also bet a ton of cash on the fact that there won't be any verifible records. Without proof of income you are only left with value of machines, inventory and locations.

Something along 10-12K would be my BEST offer, if, after looking at the machines and locations I am getting a warm fuzzy feeling.

That would have to be a class A warm fuzzy feeling.  I'm seeing more of a liability than asset here.  Even if the accounts did have some potential, it would take a substantial reinvestment to capitalize on it.

 

Apparently there are verifiable records - I believe you'll find that in picture #7     

[AZVendor]

Regardless of how this person has priced this route (I always find it comical when each location is called a route) here is what I feel the machines are worth as assets only:

 

Pic 1: Chinese combo $200

Pic 2: AP LCM5           $1500

Pic 3: USI GF19          $400

         DN501E, multi   $1200

Pic 4: Chinese combo $200

Pic 5: GF19 F80         $600

          USI CD6 slave   $200  if BC6 $500

Pic 6: Nat. 168            $1000

          DN501T, multi?  $800

Pic 7: Money from bank robbery $priceless

Pic 8: USI CD8            $500

          USI? 5700?       $1000

Total> $7600 plus inventory and coin

 

If his cryptic sales are as bad as $800/mo gross and you can net 60% due to pricing and buying right, you will net before expenses $5760/yr.  If the gross comes anywhere close to $1500/mo, then you could net before expenses $10800/yr.

 

I would offer as low as possible and not until August 1 or later.  Maybe $8500 including the inventory and coin making your ROI as long as 1 1/2 years or as short as 10 months.  He must be able to prove his collections for at least the last 12 months or you should only offer asset value.  It doesn't matter that they overpaid for this, you can only offer what it's worth because you have no control over the quality of accounts they chose to put their assets into.  Not being able to clearly substantiate sales would mean sales have no bearing on this deal.  If you look at the machines and decide that the Chinese ones need to be replaced, factor that in, too.  I can't make out any hand written labels but those are easily replaced.  I'd be more concerned if that lazy attitude led to inoperable bill validators, coin mechs or compressors.  Personally, I only have a problem with the Chinese machines but I know how to work on all the others and keep them running properly.  The GF19s will give some product vending problems.

 

Good luck if you move forward with negotiations. Let us know what happens.

[Feral Vending Mechanic]

Looks more like a GPL in picture 6. Round buttons, slightly different trim, looks like the letters run straight down the left side of the keypad, rather than in a grid on top. ( Hard to tell for certain, as the pictures are blurry. ) Easily turned INTO a 168 with a control board upgrade. ( I want to say you have to also replace the service keypad, and the main keypad as well, but don't quite recall exactly. )

 

I gotta say the machine in picture two is throwing me for a loop. It looks like an LCM, but it also strongly resembles a National. Is that one of the first post Crane buyout models? ( We had a few weird machines in San Diego from that period. Last couple of years before the guy sold to the big company, he was buying all kinds of oddball machines. ) (( Caveat: I've only ever dealt with a hand full of combo machines, mostly Nationals based on the 14x/15x/16x chassis. And one bastard of a USI that I'd have loved to take a sledgehammer to, Office Space style. ))

[AZVendor]

No, picture 2 is an AP LCM5. You can tell from the control panel.  The nice can loading door graphics came on the last machines before Crane bought them out and destroyed one of the best manufacturers. 

 

I know the USI combo you are talking about, it's the only one that anyone would vehemently hate.  It had snacks on the left and soda on the right in one mother of a heavy cabinet that the door rarely aligned correct on.  The door was almost as heavy as the cabinet, as the door is on the CB700.

[spdydre]

I waited a guy out for 6 months lowballing him and making him frustrated.  His route grossed the same $1500 and he was selling for 15k  I ended up buying it for 4k after he gave in lol

[northernvavending]

Thanks for all the comments and advise.  I may ask to meet with him.  I'm going to give it some more thought.  It would have to be a really good deal and you guys have given me a good idea of what that was.   

[Poplady1]

If I were considering buying it I would ask to run the route with him at least twice, count the money.  More than that I would load and test each machine.  At the end of the day this route has value.  You job is trying to decid how much you have to pay to make a fair profit.  Do the work by going out with him first.  Then work on the price.  My two cents.   Also once you see the work involved you may not want to get into this business.

[RobertInPhilly]

Find out where every location is located. The day he leaves I'd be knocking on every single door with equipment if your choosing. He'll I'd be knocking on those doors before he leaves so your foot is already in the door

[moondog]

Okay guys, what am I missing?  The last time I checked, locations that grossed $250 a month only netted $125 less the COS.

 

There are cheaper hobbies out there if that's what you're looking for.

[northernvavending]

Thanks again to everyone for their comments.  I  really appreciate each and every one.  I'll let everyone know what I end up doing.    

[AZVendor]

Find out where every location is located. The day he leaves I'd be knocking on every single door with equipment if your choosing. He'll I'd be knocking on those doors before he leaves so your foot is already in the door

Not cool Robert.  Tongue in cheek I hope.

[RobertInPhilly]

I had a thinking faster than writing moment with my previous post. I ment to add on that if you are able to buy the route hat would be best to guarantee you get it, BUT if the guy that owns it doesn't sell it in time the route servicing is probably going to go to hell. He might have someone servicing it but what are odds this person is going to service the route as it should be? Probably slim to none. This is where I was thinking you could come in, since you know where all of the stops are located, and offer servicing that this route deserves.

[ZoTerri]

Hello

 

If you do manage to purchase someone elses stops/machines or route do still need to put your own permit sticker on it? Never mind i think that would be a no brainer.  .

I'm looking to get more involved as right now i manage the machines at work. But i want to branch out into the world with my own Vending Business.in Phoenix/Scottsdale Arizona area.

[AZVendor]

ZoTerri,

 

If you would like some information on vending in the Arizona market I can help you avoid any pitfalls.  In Arizona there are no permit stickers to apply to machines, nor any special permits to get, per se.  You will need an Arizona sales tax license as well as one for the city you operate in.  Let me know if I can be of further help.

[mission vending]

I agree, stay away.  Most of those machines are no good.  If he's working one day a month, they are not large commercial accounts, or he does a terrible servicing and they would always be empty.  A "large" commercial account will need serviced AT LEAST once a week for a decent one.  You will constantly have problems with those combos and those USI branded machines.  Move on, or look over the accounts in person, and offer based on what you feel they are worth from there.  The machines in their present physical condition, and assuming they are all working, I would value at only $5000 max.  Those combos and USIs are basically worthless, unless you were to resell them to someone who is a sucker. 

 

Let me preface my comment, We are all here to share information and experiences, some of which will be very different from others. My comment is not meant to disparage yours but merely offer a counterview, I hope its taken with that spirit.

 

Regarding your comments about the USI equipment, I started vending in 1995 and within 3 years had about 200 machines out, most of it USI. My career gross revenues is well in excess of 10M, again much of that on USI equipment. I disagree with your comment that they are basically worthless. I have said numerous times previously that, IMO, USI branded is decent equipment, not the best but quite serviceable. A analogy used by another member is that they are the Chevy of vending machine manufacturers, I think that is a perfect description.

 

I still have 35 or so USI machines, most of them have at least 50 and as much as 250K in lifetime sales run through them and I can honestly say that I have replaced more DBV's and coin mechs (which are made by coinco, Mars or other and NOT USI) than I have motors, boards or other USI parts. Yes, their parts are pretty expensive because they are not popular with the large vending companies and consequently have no other source for parts other than the manufacturer, but that's another discussion

 

I have also previously said that  some of the models they put out on the market have been HORRIBLE, the worst being the 7/10 drink machine that I actually sunk in a lake to use as a boat anchor. If there is a machine on this planet that I hate it is this one.   So on the worthless comment I guess that there are some models that come pretty close, even scrap metal has some value, doesn't it?

 

Given that in other recent threads there has been discussion about the decline in quality of other brands of newly manufactured equipment I think that in the not to distant future its possible that USI equipment will be considered on par with the other brands.

 

For my business I will continue to buy equipment as I have need for it and to me it does not matter if its USI, AP, AMS or whatever, if it fits my need and the price is right I will buy it regardless of manufacturer.

[moondog]

Let me preface my comment, We are all here to share information and experiences, some of which will be very different from others. My comment is not meant to disparage yours but merely offer a counterview, I hope its taken with that spirit.

 

Regarding your comments about the USI equipment, I started vending in 1995 and within 3 years had about 200 machines out, most of it USI. My career gross revenues is well in excess of 10M, again much of that on USI equipment. I disagree with your comment that they are basically worthless. I have said numerous times previously that, IMO, USI branded is decent equipment, not the best but quite serviceable. A analogy used by another member is that they are the Chevy of vending machine manufacturers, I think that is a perfect description.

 

I still have 35 or so USI machines, most of them have at least 50 and as much as 250K in lifetime sales run through them and I can honestly say that I have replaced more DBV's and coin mechs (which are made by coinco, Mars or other and NOT USI) than I have motors, boards or other USI parts. Yes, their parts are pretty expensive because they are not popular with the large vending companies and consequently have no other source for parts other than the manufacturer, but that's another discussion

 

I have also previously said that  some of the models they put out on the market have been HORRIBLE, the worst being the 7/10 drink machine that I actually sunk in a lake to use as a boat anchor. If there is a machine on this planet that I hate it is this one.   So on the worthless comment I guess that there are some models that come pretty close, even scrap metal has some value, doesn't it?

 

Given that in other recent threads there has been discussion about the decline in quality of other brands of newly manufactured equipment I think that in the not to distant future its possible that USI equipment will be considered on par with the other brands.

 

For my business I will continue to buy equipment as I have need for it and to me it does not matter if its USI, AP, AMS or whatever, if it fits my need and the price is right I will buy it regardless of manufacturer.

Mission,

 

Are you keeping track of all the machines you're dumping into those lakes?  It would seem to me that at some point you're going to start filling them up which is really going to piss some of those boat boys off down there   

[mission vending]

Nah, only 2 machines, one lake. Besides if the navy can sink a battleship to "create habitat" why can't I?? I'm sure those ships were a lot more toxic than my soda machine.

As nasty as that old soda sludge is it was only a snack for some catfish.