pricing bulk routes?

[dogcow]

Can anyone give me some guidelines for pricing a purely bulk route? I am looking at a route bringing in $1400/yr gross. 10 locations, 15 machines 6 4-col a&a, 3 6-col, 3 1-800 set up for caps, and a u-turn set up for caps. I know how to price a full line route but what are the rule of thumb for bulk routes? IMO the asset value does not exceed gross sales. any suggestions appreciated. 

[Rick]

Commission would have an impact.  Can't imagine he's paying a % with these numbers but, regardless, I'm guessing he's asking far more than it is worth.  Unless my math is off, he's averaging $7.77 per machine per month and $11.66 per location.  Those numbers are VERY below average.  I'm guessing he's selling what amounts to one or two solid $30-50/month locations and the rest are dogs that need pulled.  

dc, to be completely honest I wouldn't even bid on this unless I wanted the equipment and couldn't go much more than 4 months gross ($500-$600).

 

P.S. Generally speaking, my rule of thumb for bulk routes is 4-9 months gross, which puts my ROI somewhere between 8-18 months.  Obviously, I'm willing to pay a premium for good equipment averaging $17+ per head.  The higher the gross per machine, the longer I'm willing to wait for my return on investment.  

[mission vending]

Can anyone give me some guidelines for pricing a purely bulk route? I am looking at a route bringing in $1400/yr gross. 10 locations, 15 machines 6 4-col a&a, 3 6-col, 3 1-800 set up for caps, and a u-turn set up for caps. I know how to price a full line route but what are the rule of thumb for bulk routes? IMO the asset value does not exceed gross sales. any suggestions appreciated. 

 

Hey DC, good to see around again.

[dogcow]

Commission would have an impact.  Can't imagine he's paying a % with these numbers but, regardless, I'm guessing he's asking far more than it is worth.  Unless my math is off, he's averaging $7.77 per machine per month and $11.66 per location.  Those numbers are VERY below average.  I'm guessing he's selling what amounts to one or two solid $30-50/month locations and the rest are dogs that need pulled.  

dc, to be completely honest I wouldn't even bid on this unless I wanted the equipment and couldn't go much more than 4 months gross ($500-$600).

 

P.S. Generally speaking, my rule of thumb for bulk routes is 4-9 months gross, which puts my ROI somewhere between 8-18 months.  Obviously, I'm willing to pay a premium for good equipment averaging $17+ per head.  The higher the gross per machine, the longer I'm willing to wait for my return on investment.  

hes asking 4500 i think yeah seemed way high, thts the same what i estimated it at. based on the locs i thought i might be able to upgrade some to crane locs. i agree i think theres mostly duds and 2 or 3 winners. i agree its prob worth asset value 600 seems low to me , no?

Hey DC, good to see around again.

thanks good to be back, at some point i might explain what was up, i just got thru living a real life after school special lol

[Nick505]

Assets are closer to $900 at a fair used price.

 

A&A Advance 4 columns: 6@$80.00 $480

Allstar 6 columns??:         3@$90.00 $270

1800's                               3@$60.00 $180

Uturn                                 1@$50.00 $50

                                                           $980

 

This is fair used prices. Prices are higher on ebay.

[Rick]

Assets are closer to $900 at a fair used price.

 

A&A Advance 4 columns: 6@$80.00 $480

Allstar 6 columns??:         3@$90.00 $270

1800's                               3@$60.00 $180

Uturn                                 1@$50.00 $50

                                                           $980

 

This is fair used prices. Prices are higher on ebay.

 

Can't argue with any of that.  My initial estimate of 5-600 was lowball.  

thanks good to be back, at some point i might explain what was up, i just got thru living a real life after school special lol

 

Sounds like an epic post for the golpher hole coming!

[havending]

Can anyone give me some guidelines for pricing a purely bulk route? I am looking at a route bringing in $1400/yr gross. 10 locations, 15 machines 6 4-col a&a, 3 6-col, 3 1-800 set up for caps, and a u-turn set up for caps. I know how to price a full line route but what are the rule of thumb for bulk routes? IMO the asset value does not exceed gross sales. any suggestions appreciated.

Glad to see you back buddy.

[caserri]

Hey DC, good to see around again.

Ditto. And hitting up the bulk section to boot!

--Steven

[dogcow]

Apologies if the person who post this ad posts here, but another guy im contacting with is claiming that he has 22 locations bulk vending that NETS $10,000 per year. Now again I am not in bulk but those numbers seem crazy to me. I am trying to find locations that can get flipped to amusement.  He is asking 28,000 but the way I am thinking on it is, the margins are probably something like amusement, like 30-40% to product, 30% commission and 30% net meaning that his gross is around 30,000 per year 

making each location average to around $125 per month. Is that even remotely possible? he is asking $28,000 which again seems very high but at least on the mark if those crazy numbers are true. 

 

sorry if this is a stupid or obvious question, maybe those numbers are totally normal? i dont know i just

have 3 kinetic pinball games out, no other bulk, i know my pinball games dont make more than 30-40 bucks 

on a real good month. 

[Action Vending]

Apologies if the person who post this ad posts here, but another guy im contacting with is claiming that he has 22 locations bulk vending that NETS $10,000 per year. Now again I am not in bulk but those numbers seem crazy to me. I am trying to find locations that can get flipped to amusement. 

Make sure there is room For amusements, before you buy it thinking you can put amusements, in a lot of bulk accounts there is no space for amusements. 

 

If there is space- talk to the owners and see if that s something of interest to them. 

 

Good to have you back bud. 

[PowerVendor]

Apologies if the person who post this ad posts here, but another guy im contacting with is claiming that he has 22 locations bulk vending that NETS $10,000 per year. Now again I am not in bulk but those numbers seem crazy to me. I am trying to find locations that can get flipped to amusement.  He is asking 28,000 but the way I am thinking on it is, the margins are probably something like amusement, like 30-40% to product, 30% commission and 30% net meaning that his gross is around 30,000 per year 

making each location average to around $125 per month. Is that even remotely possible? he is asking $28,000 which again seems very high but at least on the mark if those crazy numbers are true. 

 

sorry if this is a stupid or obvious question, maybe those numbers are totally normal? i dont know i just

have 3 kinetic pinball games out, no other bulk, i know my pinball games dont make more than 30-40 bucks 

on a real good month. 

I'd offer about $11,000 based upon 4 months of gross revenue assuming $33,000 per year and about $150 per location for the equipment (150x22=$3,300).  I would say the route would be worth about $14,000.  I guess that i have been spoiled buying routes using that math.  I wouldn't go out 12 to 18 months to break even as some have said before because i think most vendors stretch their gross numbers at selling time!  What do yall think about my ciphering?  

[Rick]

I wouldn't go out 12 to 18 months to break even as some have said before because i think most vendors stretch their gross numbers at selling time!  What do yall think about my ciphering?  

 

Hey PV, not sure about your ciphering, but if you paid 11k for this route, you would be breaking your own rule.  You wouldn't see a return on investment for over a year.

 

That being said, I think $11,000-$12,500 is just about right on the dot.  And yes dogcow, $125/month for a solid bulk location is not unheard of.  I'd proceed with caution, but it's possible.

[mainor5251]

Welcome back DC

[musser]

Using someone else's "net" as a guide is a mistake. Each operators business process is different thus each operator will have a different return. I always look at gross if it can be verified by route sheets, commission checks, tax returns then I plug the number into a spreadsheet that reflects my cost of doing business. Most people selling will pretend that gross minus product and commission is net, it is not. You have repairs depreciation, labor, travel costs, insurance, taxes, etc and if financing the debt load.

Everyone selling these small "routes" of a dozen or two machines has the same skewed view of the business process. Which is why they are selling to begin with. Of all the routes I have looked at maybe 2% were worth the annual gross, 30% were worth 75% of gross the rest were worth no more than 50% of gross.

[sherlock]

Using someone else's "net" as a guide is a mistake. Each operators business process is different thus each operator will have a different return. I always look at gross if it can be verified by route sheets, commission checks, tax returns then I plug the number into a spreadsheet that reflects my cost of doing business. Most people selling will pretend that gross minus product and commission is net, it is not. You have repairs depreciation, labor, travel costs, insurance, taxes, etc and if financing the debt load.

 

 

Great insight musser.

[Rick]

Everyone selling these small "routes" of a dozen or two machines has the same skewed view of the business process. Which is why they are selling to begin with. Of all the routes I have looked at maybe 2% were worth the annual gross, 30% were worth 75% of gross the rest were worth no more than 50% of gross.

 

This has been my experience as well.  Good post musser.  Although I will add, I think sometimes we forget to put a value on the most precious asset of all...our own time.  If these 22 locations truly gross 30k annually, those are 22 BLUE CHIP bulk locations.  And I'm always willing to pay a 20-30% premium for those because of the $/hr worked it represents long term.    

 

I'd pay more for a 22loc. route of crappy generic brand equipment doing 30k than I would for a 100 loc route of brand new NW, Beaver, Oak racks doing 30k...even factoring in the equipment value.  

 

Assuming a standard 40 hr. work week and 30 min. service time per location per month - the first route can be serviced using only 6.9% of my most valuable resource and the 2nd route sucks 31.25%!  Service time people.  The true value of a route lies in your $/hr.

[dogcow]

Using someone else's "net" as a guide is a mistake. Each operators business process is different thus each operator will have a different return. I always look at gross if it can be verified by route sheets, commission checks, tax returns then I plug the number into a spreadsheet that reflects my cost of doing business. Most people selling will pretend that gross minus product and commission is net, it is not. You have repairs depreciation, labor, travel costs, insurance, taxes, etc and if financing the debt load.

Everyone selling these small "routes" of a dozen or two machines has the same skewed view of the business process. Which is why they are selling to begin with. Of all the routes I have looked at maybe 2% were worth the annual gross, 30% were worth 75% of gross the rest were worth no more than 50% of gross.

thanks thats pretty much along the lines of my thinking . i have my own cost of doing biz numbers

i was trying to suss out his gross i agree he was probably doing gross - (product+comm) 

anyway i appreciate the advice i will take it quite serious advisement

[Billnuts]

It worth $1200- $1600

 

depends on size and how good of locations for expansion if you get 3 locations to take a crane that's pure gravy

from there

 

bill

 

how did I figure this?

 

900 in equipment

200 in stock?  considered  FREE with buying the machines and locations.. but still a cost to consider..

 

and $30-$50.00   for the location

[musser]

 

Assuming a standard 40 hr. work week and 30 min. service time per location per month - the first route can be serviced using only 6.9% of my most valuable resource and the 2nd route sucks 31.25%!  Service time people.  The true value of a route lies in your $/hr.

 

Spot on Rick. Time is ones most precious possession and yet we never own it just spend it. Don't throw it away on junk.

[dogcow]

 

 

Assuming a standard 40 hr. work week and 30 min. service time per location per month - the first route can be serviced using only 6.9% of my most valuable resource and the 2nd route sucks 31.25%!  Service time people.  The true value of a route lies in your $/hr.

 

Spot on Rick. Time is ones most precious possession and yet we never own it just spend it. Don't throw it away on junk.

 

now im confused, 2nd route has more stops so increased service time but considerably more revenue per stop ( tenfold increase in revenue) so how is the route sucks? is there something i am missing  here?

[vendamania]

Pricing a route question will always get a ton of different equations.

Personally I break it down several ways.   Quality of route…Quality of machines… Kind of machines…Worth of machines... Gross … Net ... ect.

 

In my opinion the first route is worth nothing. Locations averaging $11 a month is a complete waste of time. You are buying machines and the wrong type at that.

You could place those sticker machines on the street in front of your house and your neighbors and do $11 a month. You would cut your gas expenses.

This route consist of bad locations and crappy machines. Worth $500 tops… I have sticker machines for sale if interesed.

 

Second route worth more depends on type of machines and locations.

 

I guess you have to look at it from both sides. What would you sell your route for?   If it is a quality route with quality machines and a lot of sweat to build then it would be worth top dollar.

If it consist of junky machines and bad locations it not's worth more then used machine value.

 

 

I personally would price my route at around a year gross or 2 1/2 year gross net being gross minus product and commission, minimum. I don't care what someone else's net is that is the way I would price it.

Quality machines ,great locations and a lot of sweat. It would take someone years to build it even if they could due to saturation. So it has worth.

 

Sometimes using the gross ,net and machine worth equations all come out to about the same number.

 

OK this is my take on pricing routes and I am sticking with it.

 

Fred