Please Appraise This Route

[blovewell]

Hey All, I could use some help with establishing the value of this route.  I think the guy is asking too much for the age of his equipment, but would like to see what others thoughts are.

 

Here is what he says about his sales:

 

The soda is currently at 60 cents and the snacks are 85 cents. The route will gross around $14,000-$16,000/year and are in ideal locations that never get vandalized.

 

I am attaching a .pdf file he sent showing the locations and equipment.

DyrekAyre.pdf

[musser]

I bet the seller is pleased as punch his proprietary business information is on display to the world.

[CajunCandy]

I don't think AZ would have parts to fix those OLD snack machines.

 

I got $28.35 for a snack machine just like those at the scrap yard.

 

I would pass on this route.

[moondog]

Hey All, I could use some help with establishing the value of this route.  I think the guy is asking too much for the age of his equipment, but would like to see what others thoughts are.

 

Here is what he says about his sales:

 

The soda is currently at 60 cents and the snacks are 85 cents. The route will gross around $14,000-$16,000/year and are in ideal locations that never get vandalized.

 

I am attaching a .pdf file he sent showing the locations and equipment.

The snack machines are absolute dinosaurs and the soda machines aren't anything to shout about either.  60 cents for a soda is way low - you need to be at 75 cents. You need to pass on this pile of crap

[orsd]

Marginal accounts, as soon as the snacks break I'd junk them

[TKK]

That sucks prices are wayyy too low.

[mission vending]

Hey All, I could use some help with establishing the value of this route.  I think the guy is asking too much for the age of his equipment, but would like to see what others thoughts are.

 

Here is what he says about his sales:

 

The soda is currently at 60 cents and the snacks are 85 cents. The route will gross around $14,000-$16,000/year and are in ideal locations that never get vandalized.

 

I am attaching a .pdf file he sent showing the locations and equipment.

 

I wouldn't bother with buying machines whose next stop is the scrap yard. Something to also keep in mind, it appears all these locations are. branches of the same business, all it takes is one good sales rep from a competitor or a new manager and you could lose all of them.

[AngryChris]

REGARDLESS of the equipment, I don't believe this seller at ALL.

 

A vending machine like that doing $200/month?!?!?  At a locaton that looks like it has 3 employees?!?!?!  Is it possible?  Yes, it's possible, but I simply don't believe it.  Even if everything in there were $1 (and it probably isn't with 60 cent soda), you would have to sell 200 pieces each month.  No way.

But wait, there's more!!!!

 

So these snack machines do $2400 to $3600/year in sales based off of what the seller says.  BUT!!! The soda machines vend roughly 2500 vends/YEAR.  At 60 cents per unit, that's about $1500/year with the snack machines doing an average of $2800/year.  I just DO NOT believe that.

 

But wait, there's even more!!!

 

If those machines were doing that kind of volume (which isn't great, but $200/month in a snack machine isn't bad if you ask me), I would have bought some used AP 7000's or National 145's a long time ago and made sure that I would keep my accounts happy while ALSO having better, more reliable equipment.

 

So... snack machines doing almost TWICE what the SODA machines are doing at EACH account?  Red flag.

 

Some silly accounts that look like they would realistically do $1,000 to $1,500 annually doing about $4,000 annually?  Red flag.

 

A vendor using GARBAGE equipment without a competitor taking over by now?  Red flag.

 

Every soda machine has a "new" compressor?  Red flag.

 

These locations look like they have 10-20 employees per office.  At that rate, they should be doing about $100-$150/MONTH between BOTH machines at EACH location.

 

If I round ***HIGH***, that means that you might be doing say... $120/month in soda sales per location (or about 200 vends/month... which is 2400 vends/year) while also doing MAYBE $80/month in snack sales.  ***MY NUMBERS MAKE SENSE FOR TYPICAL LOCATIONS***

 

Note:  If the validators on the SODA machines were NOT working, you would see approximately $200/month in dollar bills in the changers.  This would ONLY happen if people had NO change at all.  I get the feeling that this vendor simply counts the dollar bills in some of the changers and rounds up (WAY up) and says "Well, I pulled $187 out of this changer in a month so that probably went to the snack machine, so let's just say the snack machine does $200/month."

 

Red flag after red flag after red flag.  And that's just on the NUMBERS.

 

Here's the question:  If you bought this business and had to liquidate it, what could you liquidate it for?

 

Here's your equipment and approximate values:

 

Location #1:

DN Soda: $100

Snack machine: $0

Changer: $100

-TOTAL-: $200

 

Location #2

DN 240: $100

Snack machine: $0

MARS VALIDATOR: $100

Changer: $100

-TOTAL- $300

 

Location #3

Vendo 475: $100

Snack: $0

MARS VALIDATOR: $100

Changer: $100

-TOTAL- $300

Location #4

-TOTAL- $100

 

Location #5

-TOTAL- $100

 

That's $1,000 for the value of these machines if you're lucky.  Could you get $2,000 or more for them?  If you are some type of elite salesperson, then yes.  But realistically, if I bought this business and it didn't make me any money, I would hire a mover to pick up everything and send me only the changers and the DN/Vendo soda machines back to me while everything else would go straight to the scrap yard.

With that said, and while figuring that I cannot see these locations REALISTICALLY doing more than $120/month, $1500/year, or roughly $7500 for all 5 locations per year, ........ I would NOT offer more than $1,000 to buy this route and that's if I was DESPERATE.  I would probably laugh at the sight of the very first location and walk away from the offer completely, and I don't like to laugh at people that I don't know.

[QualitySelectionsJ]

Be glad you asked here before buying that stuff. First time I see a snack machine like that. I can only imagine having to service a machine like that ...

[CajunCandy]

Be glad you asked here before buying that stuff. First time I see a snack machine like that. I can only imagine having to service a machine like that ...

We had a snack machine at work just like what is in pictures! We thought that if we bought our own snack machine we would reap the profits and have lunches and what not with all the money we would make off the snack machine!

 

What a joke!

 

Dang machine would stay jacked up and darn little stickers holding snacks was a joke!  On top of that nobody on snack commity would go to Sam's to buy product. I was not involve with machine.

 

mike

[moondog]

Hey All, I could use some help with establishing the value of this route.  I think the guy is asking too much for the age of his equipment, but would like to see what others thoughts are.

 

Here is what he says about his sales:

 

The soda is currently at 60 cents and the snacks are 85 cents. The route will gross around $14,000-$16,000/year and are in ideal locations that never get vandalized.

 

I am attaching a .pdf file he sent showing the locations and equipment.

Please don't get discouraged by all the negative comments here as they are all valid.  Patience is a key element in acquiring existing locations - for every ten I look at I purchase maybe one.  You'll find that most locations for sale are somebodies dog account they just want to get rid of but if you keep your eyes open you will find a good route to purchase. Hang in there.

[FrCorey]

pass old junk and the figures don't sound right.

they are trying to unload it.

[blovewell]

Thank You for all the awesome feedback...you confirmed my initial thoughts.  I assume he is an employee of this company, that's why all of his locations are appear to be branches of the same business.  This company is actually one of the largest employers in my area.  If he does not have a contract with them, should I target these guys and try to get in there without having to buy this ancient equipment?

 

I don't want to be unethical, but I think this might be a good chance for me to get deeper into the game.

 

Thanks again for the feedback.

[moondog]

Thank You for all the awesome feedback...you confirmed my initial thoughts.  I assume he is an employee of this company, that's why all of his locations are appear to be branches of the same business.  This company is actually one of the largest employers in my area.  If he does not have a contract with them, should I target these guys and try to get in there without having to buy this ancient equipment?

 

I don't want to be unethical, but I think this might be a good chance for me to get deeper into the game.

 

Thanks again for the feedback.

There's nothing unethical about honest competition, if you believe that these could be good locations with some proper equipment, go fir it.  Understand that proper equipment could cost as much as $2,000 per location plus moving, coin change and inventory (no free lunch).  This guy was not doing the account any favors with those ancient "Tom's" snack machines.  A reasonable snack machine for a decent account might be a National 147 or AP 113, not new by far but reliable.

[AngryChris]

Thank You for all the awesome feedback...you confirmed my initial thoughts.  I assume he is an employee of this company, that's why all of his locations are appear to be branches of the same business.  This company is actually one of the largest employers in my area.  If he does not have a contract with them, should I target these guys and try to get in there without having to buy this ancient equipment?

 

I don't want to be unethical, but I think this might be a good chance for me to get deeper into the game.

 

Thanks again for the feedback.

 

It may be a large employer as a whole... but that doesn't matter at all.

 

If general motors had 1,000,000 employees with 100,000 buildings, and every building housed 10 employees, it would not be profitable to install machines in every building (or any building).

 

So let me ask you this, from what I saw (based off of my brilliant research methods... aka: google), there are 10-20 employees at most of these buildings.  Can you verify how many employees are at each building?  If you can, we can give you MUCH better estimates on the sales.  However, nothing changes the fact that I gave examples of SO many red flags on this deal.

 

And another thing, if no one else has managed to grab this account yet, I doubt you could get this account in any profitable manner.

 

P.S.  My point to the GM analogy was that a big employer does not mean big profits.  I have a few accounts with GIGANTIC warehouses and they don't do a ton of money.  I also have a few accounts in tiny buildings that do very well.  What matters is the amount of employees per building.  I turned down an account that came with 5 different locations because there simply wouldn't be enough usage (even combined) to pay for all of the equipment.

[metrovending]

Love the analogy about General motors, American Airlines employs about 8000 people here in Tulsa and about once a month I have to explain to someone how just because it's so big doesn't mean it's profitable. Cost of equipment, time to run location, vend prices the list goes on.

 

Lot's of good information on here. I would pass on this deal if for no other reason than all locations are tied together & it's not hard to get sideways with some mid level manager over not having diet caff. free R.C. cola in the machine. The next thing you know you are picking up all that junk that you just paid too much for & you have a loan payment & no income to make the payment. Then you are stuck not being able to grow your business because you have equipment you cant reset & minimal access to any more capital(borrowed money) because you haven't been in business long enough to get any more money.