Ckane Posted August 19, 2013 Share Posted August 19, 2013 Hey guys Im new to the vending world and looking to purchase a route with 250 locations total 84 locations are bulk toys and the remaining are bulk candy... the purchase also includes 150 machines not placed on location all candy machines are 1-800s and the bulk toys are oak/A&A global machines. the gross on both routes are $7200per month and the net is $3500 the asking price he is asking is a huge 100K im meeting with him tomorrow to get in the paper work to back these numbers. can anyone help me determine if this asking price is anywhere close to what its worth?? any feed back is GREATLY appreciated. Link to comment Share on other sites More sharing options...
amc-vending Posted August 19, 2013 Share Posted August 19, 2013 I would only value it around 78K myself - but would need to see the machine t see what shape they are in is there any racks ? Link to comment Share on other sites More sharing options...
Ckane Posted August 19, 2013 Author Share Posted August 19, 2013 I would only value it around 78K myself - but would need to see the machine t see what shape they are in is there any racks ? yes there is a lot of racks from what I understand ill know tomorrow on the exact number. Link to comment Share on other sites More sharing options...
amc-vending Posted August 19, 2013 Share Posted August 19, 2013 you will need to figure also - ie gas, travel time etc 3500 net seems pretty low for that size of a route looks like his cogs is high. you may be able lower them a bit. even if you cleared 3500 a month - it will still take over 2 year to get your ROI back Link to comment Share on other sites More sharing options...
mjacks Posted August 19, 2013 Share Posted August 19, 2013 Sounds like a good opportunity. I am sure he is throwing out a big first number since he knows negotiations will bring the number down to what he really thinks he should get for the business. Go out and physically work the route with him and get a good idea of what the route is like. Easiest way to expand is to buy existing routes and improve them (in my opinion). Link to comment Share on other sites More sharing options...
musser Posted August 19, 2013 Share Posted August 19, 2013 This is a real loser very over priced. The gross is what it should be I'd it was all charity triples the rack locations must be real losers. The net figure is bogus. Link to comment Share on other sites More sharing options...
musser Posted August 19, 2013 Share Posted August 19, 2013 Ask to see his schedule c tax filing and evaluate the biz on what they report for taxes. Don't get suckered make the seller prove the income and expenses. Link to comment Share on other sites More sharing options...
treadmill Posted August 19, 2013 Share Posted August 19, 2013 I say it's worth 40-45k. 30k for the ones that are placed and 10k for the unplaced machines. Any more than that and you are overpaying. Also ask to see his tax return as was stated otherwise walk away immediately. At that point he is just blowing smoke. Link to comment Share on other sites More sharing options...
Ckane Posted August 19, 2013 Author Share Posted August 19, 2013 Thanks for all the great responses guys! ill have some good questions going in to todays meeting and ill let you all know what come out of it. I forgot to add that after setting up the meeting time and place he told me that "just so you know the price of 100k is firm" . so we'll see.. Link to comment Share on other sites More sharing options...
treadmill Posted August 19, 2013 Share Posted August 19, 2013 Run away as fast as you can. Tell him he'll be sitting on that for a while or better yet tell him yo place the other machines and tell you what they are doing and then come back yo us with the figures and let's us help you out then. Otherwise I would step away. Link to comment Share on other sites More sharing options...
jerry1973 Posted August 19, 2013 Share Posted August 19, 2013 I would only value it around 78K myself - but would need to see the machine t see what shape they are in +1 I think if you can get it for $75k or so give or take, it would be a good oportunity as long as the equipment is quality and all the numbers check out. 250 locations is good, but how many total heads is he operating? $7200/4 = ~$29 per location average in sales, which is pretty good. Unless they all have racks as stated above then those numbers would not be stellar. But if that was the case, the equipment would be worth a ton more bringing up the value also. Link to comment Share on other sites More sharing options...
VendingExperts Posted August 19, 2013 Share Posted August 19, 2013 $70,000 firm! Link to comment Share on other sites More sharing options...
bhfisher Posted August 19, 2013 Share Posted August 19, 2013 I'm willing to bet the Seller does not in fact adequate documentation to support the the selling price. I found one like this on Craigslist and the Seller appeared to be selling a biz op. No facts, no income documentation, no bank deposits, no Schedule C, just "pie in the sky". Is this Seller in Orange County? Be careful - Good Luck! Bart Link to comment Share on other sites More sharing options...
jerry1973 Posted August 19, 2013 Share Posted August 19, 2013 yes, for sure. Above all else be very careful. Check everything, and run all information through these forums. Plenty of experience here to help you with this. There have been more people than not scammed on vending deals, so be very cautious, and check/verify everything. There are good deals out there from time to time, but they are easilly outnumbered by scams and stretched numbers/expectations. Link to comment Share on other sites More sharing options...
Action Vending Posted August 19, 2013 Share Posted August 19, 2013 For 100k you can buy a ton of new equipment and build a much better route yourself!! Link to comment Share on other sites More sharing options...
musser Posted August 19, 2013 Share Posted August 19, 2013 For 100k you can buy a ton of new equipment and build a much better route yourself!! Now thats the best advise on this thread. Link to comment Share on other sites More sharing options...
Ckane Posted August 20, 2013 Author Share Posted August 20, 2013 Ok so after the meeting this is the info I got... He showed me his vending business bank account for the last 4 months of deposits and it totaled $22,629 this is after commissions are paid for both routes. He also had last years (2012) total sales bulk toy route- gross $55,221 net $34,800 candy route- gross $25,310 net $15,037 all nets are after all expenses: auto, cost of goods, commissions and fees 84 locations are racks all toys some gum and candy 150 locations 1-800 gum and candy extras there is about 6 racks, a ton of parts and partial machines, about 100 1-800 triples, and $3000 in product inventory. Link to comment Share on other sites More sharing options...
musser Posted August 20, 2013 Share Posted August 20, 2013 Are his 1 inch toy machines at 25 or 50 cents? Are there 2 inch machines and what vend price he has a very low cog and commission it seems to me Link to comment Share on other sites More sharing options...
Ckane Posted August 20, 2013 Author Share Posted August 20, 2013 Are his 1 inch toy machines at 25 or 50 cents? Are there 2 inch machines and what vend price he has a very low cog and commission it seems to me Im not sure that's something I can ask him.. also after looking through the numbers again the net for the bulk toy route is wrong toy route gross is $55,200 and the NET is $24,850.... not $34,800 I conformed this with him. this seems really low profits for the size of the route maybe things can be done differently with the structure and locations.. Link to comment Share on other sites More sharing options...
VendingExperts Posted August 20, 2013 Share Posted August 20, 2013 I personally would not pay more than $60,000. Be willing to walk! Otherwise I would take the money that you are looking to invest and start your own route. Buying an established route can give you a jump but you definitely don't want to over pay and then have to rework the entire route. If you develop your own route you can tailor it to your expectations. I would want to be able to get 100%ROI in under a year. Just my opinion. Link to comment Share on other sites More sharing options...
musser Posted August 20, 2013 Share Posted August 20, 2013 That's a more realistic number but the so called net can be deceptive. You need to factor in 20% of the value of the equipment as cost due to depreciation. If all the equipment is near new and fairly close together to service top dollar value is $60000 and that's really pushing it. Link to comment Share on other sites More sharing options...
jerry1973 Posted August 20, 2013 Share Posted August 20, 2013 I personally would not pay more than $60,000. Be willing to walk! For sure, be willing to walk. He is going to have a hard time getting his full asking price. I do however think this is probably a good route, but you can do a ton with $100k cash money, or even the $60-$80k that some of us are projecting its worth. Link to comment Share on other sites More sharing options...
treadmill Posted August 20, 2013 Share Posted August 20, 2013 I still say no more than 45k. At the rate everybody is talking about it would take 2 yrs to get your money back. Normal time frame should be a year for ROI. As someone said check the coin mechs sell price. If they are st .25 then they must be changed out to .50. This would effect the sell price too. Link to comment Share on other sites More sharing options...
Ckane Posted August 20, 2013 Author Share Posted August 20, 2013 thanks for all the great responses guys.. as for now im going to back and focus on building a route myself as there is to much risk in a buy like this. Link to comment Share on other sites More sharing options...
Action Vending Posted August 20, 2013 Share Posted August 20, 2013 How many heads total??? Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.