Should I make an offer at all?

[jerry1973]

This morning there is a route advertised with 22 stops that would fit perfectly into my territory. He is asking $12000 for it, but thats just not going to happen at all. I will give the details that I know at this point and then let me know what you think if you don't mind.

 

22 locations, all soda only except 2 have snack also

 

soda machines are all leased through coke

 

owns 2 snack machines (1 full size and one smaller, but not a combo, getting more info today or tomorrow)

 

gross sales so far for the year are about $11,000 (terrible for 22 accounts, just horrible)

 

 

There are a ton of negatives with this;

as said they must be terrible accounts ~$17 average per week per stop.

machines are not owned except the 2 snack machines.

 

I kinda feel like i need to have my head examined for even thinking twice about this, but it fits absolutely perfect with where i service every week anyway, and I could probably do an every 2 week (or 3 ) to make it worth the time.

 

If you exclude the unknown (snack machines) how much value if any is here? Should I even make a small offer, or should I go get a mental evaluation?

 

I'm sort of thinking if i could get it for $4000 or up to $5000 ish, then maybe I might go for it, any thoughts?

 

[mission vending]

So 20k in annual revenue with only 2 pieces that you will own. Provided that the lease agreement will transfer 4-5 K with inventory included would be about right.

If you are patient and willing to wait a few months you can probably get it for that price.

[moondog]

This morning there is a route advertised with 22 stops that would fit perfectly into my territory. He is asking $12000 for it, but thats just not going to happen at all. I will give the details that I know at this point and then let me know what you think if you don't mind.

 

22 locations, all soda only except 2 have snack also

 

soda machines are all leased through coke

 

owns 2 snack machines (1 full size and one smaller, but not a combo, getting more info today or tomorrow)

 

gross sales so far for the year are about $11,000 (terrible for 22 accounts, just horrible)

 

 

There are a ton of negatives with this;

as said they must be terrible accounts ~$17 average per week per stop.

machines are not owned except the 2 snack machines.

 

I kinda feel like i need to have my head examined for even thinking twice about this, but it fits absolutely perfect with where i service every week anyway, and I could probably do an every 2 week (or 3 ) to make it worth the time.

 

If you exclude the unknown (snack machines) how much value if any is here? Should I even make a small offer, or should I go get a mental evaluation?

 

I'm sort of thinking if i could get it for $4000 or up to $5000 ish, then maybe I might go for it, any thoughts?

12 grand does seem high for a couple of snack machines - he doesn't own the soda machines and he'll never own the locations.  And to top it all off, the revenue is low - I wouldn't want it at any price and I certainly would not offer more than 2 grand for it.  Too much money and too much work relative to the returns involved (less than a $1,000 per month profit to service 24 machines ?)

[jerry1973]

moondog, I have been thinking about pretty much exactly what you said all morning. From my brief vending experiences, I know there's going to be misc problems and minor breakdowns to go along with the extra work of servicing also. All that stuff adds up to a lot of time without much pay compared to growing slower and picking better locations along the way.

 

Another thing ive thought about (and I might be off base) is that if I added all these dud locations to my coke account, then it might bring my case average down and coke could start pulling machines, or at least raise my product prices or maybe not let me have anymore equipment when and If I should need it.

[RobertInPhilly]

Do you have any teenage kids that could do this route to supplement allowance and teach them how to run "their own business"?

[AZVendor]

Jerry,

 

This will bring your case average down, no doubt about it.  Since you are already a Coke third party vendor you know how the rules work.   You would have to add a bunch of new soda accounts, preferably with generic machines to offset this.  Are any of these bottler machines from Pepsi so you can get in with them?  These stops are the kind I used to add to fill in routes with after we had tons of good soda volume already built up.  As we got larger we would accept many accounts just because they fit in with a route. 

 

You are correct to plan on stretching out the service schedule on these to maximize you collections.  I would evaluate it more on a per account basis to see if anything can be changed to increase sales, or if any accounts are growing or expanding to other locations.  This could get you a diamond in the rough but you need access to the list of locations to determine this.

 

As to the value of the locations, you won't pay anything for the leased machines so their only value is in inventory, coin, and his blue sky.  The snacks will be valued at, say, $2000, and the inventory and coin in 22 machines is maybe $2000, so anything over that would be blue sky.  You do need to pay for the value of not building up 20 locations yourself.  What is that worth to you?  How well does it fit in with what you are already doing?

[jerry1973]

Thanks everyone for the responses!!

 

Robertinphilly, I do have some kids that I have thought about doing that with, but I was thinking more along the lines of a couple gumball machines each or something, and let them reinvest into more etc.

 

AZ, Yes I have accounts with coke and pepsi with my current route, and this does fit perfectly into my territory (I drive right through this area every week servicing), and it sounds like you value this at $4000 + whatever the cost is of finding 22 accounts and depending on if the snack machines are of any worth. That is sort of where my $4000-$5000 price came in. I just don't know how much value I put on finding a <$20/wk account, but I do find a little value in acquiring a big chunk of locations just because it would help push my name out there as someone who strives to do a good job taking care of customers, which would go a long way in getting more good accounts (in theory anyway). BUT I surely don't want to make a name for myself without making any money!!

[TKK]

Man that sounds like a crappy route but atleadt its not Waugh overpriced. Most people try to sell their coke accounts as if they were theirs. I'd say if you don't kind the ton of machines and not a lot of income offer no more than 4-5k. He may not take it as it dis take him time to find 22 stops. Soulds like he just dropped them everywhere that would accept a machine. That's crazy low income though. Don't expect that sales will go up either. My route consists of 19 machines and makes 6 times that ammount. Two machines themselves make more than those 22 machines. That's really bad. I personaly would skip it. I don't keep accounts that don't make under $100 a piece

[jerry1973]

Kandy Kornerz, I'm leaning your way the more I think about it. We are way too far apart on price and I'm not totally sure that I would even give the $4000 - $5000. It just seems like a lot of work without a lot of payback. I think I could do much better finding my own locations.

[FrCorey]

forget it. it's all based on loaned equipment.

What if you buy it and the soda bottler decides to cut back?

Could you run out and buy replacement soda machines?

unless you really like to gamble.

[Walta]

This sounds like the type of route where a bottler would threaten to pick up their equipment if vender doesn’t buy more product weather he can sell the product or not they don’t care.

Most likely why it is up for sale he may have a dead line from his bottler.

Walta

[FrCorey]

This sounds like the type of route where a bottler would threaten to pick up their equipment if vender doesn’t buy more product weather he can sell the product or not they don’t care.

Most likely why it is up for sale he may have a dead line from his bottler.

Walta

 

years ago I had it good with 7 up.

brand new machines and they didnt care where I bought the soda from.

only real rule was, only 7 up products in our machines.

then they closed the vender program because it was getting to be a pain.

and they stopped giving away the machines after that.

[moondog]

Kandy Kornerz, I'm leaning your way the more I think about it. We are way too far apart on price and I'm not totally sure that I would even give the $4000 - $5000. It just seems like a lot of work without a lot of payback. I think I could do much better finding my own locations.

I guarantee that you could find all the accounts like these you'd ever want - not that you'd want any of them.  I proved this about three years ago - took me six months to clean up that mess once it finally dawned on me that I could be making more money flipping burgers.

[jerry1973]

yeah i agree completely