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5 Vending machines on location for $6000? - good deal?


vendoc

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Hi,

 

A complete newbie wanting to get into the business.

 

Per the seller - 

2 locations/5 machines

 

1 location has 2 machines in an aerospace manufacturing company

2nd location has 3 machines in a 24 x 7 x 356 open shipping company with lot of delivery drivers

 

Grosses - 850/month in summer months and 750/month otherwise

 

Even if I were to assume an average of 600/month gross - $300/month net, it would take 2 years to get ROI.

 

 

Does that sound like an OK deal?

 

 

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Hi,

 

A complete newbie wanting to get into the business.

 

Per the seller - 

2 locations/5 machines

 

1 location has 2 machines in an aerospace manufacturing company

2nd location has 3 machines in a 24 x 7 x 356 open shipping company with lot of delivery drivers

 

Grosses - 850/month in summer months and 750/month otherwise

 

Even if I were to assume an average of 600/month gross - $300/month net, it would take 2 years to get ROI.

 

 

Does that sound like an OK deal?

 

The locations sound like they are decent, without knowing about the equipment the price is probably high. If the machines are less than 2-3 years old and have all the latest technologies then it COULD be worth that kind of money. My first thought would be more like 3-4K WITH coin mech money and inventory.

 

Some questions: Why is the guy selling? Is there a contract(s) in place? What are make models of the machine? What is the pricing of items sold? Is there commission to be paid? How long has he had these location?

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If your net ends up being $300/mo (reasonable in my opinion because your net will be less than 50%) you will have a payback of 20 months. This is a prime example where the price is probably more than the equipment is worth in used condition. Of course without machine models we can't guess the value of the equipment but if they are typical used machines, aged 10-15 years, multiprice sodas and good validators and coin mechs, the value of location ready machines if you went out and had to buy them could easily amount to $6K. Provide us the model numbers and you may find some room to negotiate based on equipment value.

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As we've all said, get the information on the equipment (The model #s on soda machine are usually found on the left side of the machine, snack machine model numbers are usually on the inside of the machine near the top left or top right).  You also need to check the validators and coin mechs inside (if you just tell us whether they are plastic coinco/mars or old metal validators like Maka's).

 

Also, it is crucial that you check the pricing of everything.  You need the prices of the 1 oz. bags of chips, the LSS chips (about 1.5 - 2 oz), the "cookies", the candy, the pastries, cans, and bottles.  It's very possible that this guy is exaggerating his income and arbitrarily giving you a net of 50% of the gross just to make his case.  If you can really only net 35% for example, and the route only grosses 600/month, you would be stuck with $210/month in revenue AFTER COST OF GOODS ONLY, NOT fuel, NOT repairs, NOT anything else.

 

Assuming a lower figure of $210/month for example, it would take you over 28 months to break even.  Furthermore, if the equipment is JUNK, the cost of repairs could be much higher, and it could be possible that the locations have already threatened to kick him out and YOU will be stuck holding the bag (the bag of junk).

 

Get that information and report back to us and we'll help you figure it out!

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