Route Value?

[RikaKazak]

Found a route for sale.  I've never done soda, so would LOVE some input

 

52 soda machines.  All coke owned machines.  Have been on location for 1.5 years or longer (max 3 years)

 

2 snack machines.  Only placed because locations requested them.  (I unfortunately don't do snack, so spoilage will be a problem)

 

1 snack machine in garage.

 

His post: "Up for sale is a Coke Vending Route. I run the route 8-10 hrs 1 day a week in the summer and 4-6 hours 1 day a week in the winter. Route's gross income in the summer is $900-$1200/wk and 600-700 in the winter. The net is approx. 40-45% of gross. So between $250-$500 1 day a week is your net income. Call or email if interested. Will take partial trade, vehicles, gold, silver or will consider others."

 

About 75% of the locations get a commission (10%) the other locations don't.  They're all over the place, from apartment buildings, to business break rooms, to inside, to outside.

 

The guy is selling because his auction house business is doing well and he's wanting to get rid of the vending route.  So he won't be in vending at all after this sale.  He's been doing it for 1.5 years.  He bought the route instead of locate it himself.  No location has a contract.

 

I have no idea what this route is worth, what would you guys pay?  (he said there's around $2,500 in the machines in change which goes with the sale of the route, and he's already said he paid $30,000 and would take $30,000)

 

 

Thanks so much for taking the time to read this post, I really appreciate it

P.S. He doesn't have tax returns, but he said I can ride the route with him (am going to do it wed) and I can ride it a second time (the following wed) if I want to.

[Golfdogs]

I would not touch this route. There are no assets since the machines are all bottler owned. Be very skeptical.

[orsd]

nope

value is 10 mos gross if machine are pert of it or 3 mos gross+machiens values

since you dont own most of the machiens, its worh maybe 12k

oh, and if coke decides to teminate your contract, where are you gonna find 52 machines in ar couple weeks

and these are crap locations, 70 dollar a month, so you may not even meet the min orders

[tedk]

I guess he'd take $30,000 for this route. It averages about $20 per machine in sales per week (in the busy season) and he services weekly? 

You are buying 2 snacks machines for $30,000 

I'd pass.

[moondog]

Like the other guys have said, that's a lot of "air" for 30 grand.  While soda routes are the best way to slide over into full line vending. this one looks to be a loser.  I shudder to think what the minimum monthly quota is on 52 bottler machines - yikes !!!.  You often need at least one of your machines to make the minimum order for each bottler machine you have.  Anther thing that smells fishy is that he says he does all 54 machines in a 10 hour day - believe me when I say that after you've serviced twenty or so machines in one day, you'll feel like you've been beaten over the head with a log.  . The only value here is in the monthly net plus three snack machines and you'd be taking on a hell of a responsibility with the minimum monthly quota just to keep the machines.

[jerry1973]

 Anther thing that smells fishy is that he says he does all 54 machines in a 10 hour day - believe me when I say that after you've serviced twenty or so machines in one day, you'll feel like you've been beaten over the head with a log.  .

 

 

I always work on my efficiency during services, and I usually end up averaging about 20 minutes per machine. That is averaging soda and snack machines mostly. Soda machines are faster, and slower snack accounts are not to bad, but when you go to load a snack machine that has sold over $100 it will take probably 30+ minutes. This is how it usually works out for me.  20 machines x 20 minutes = 400 minutes / 60 = 6.66 hours or 6 hours and 39 minutes plus drive time plus loading the vehicle plus shopping plus fuel fill plus this and plus that. Eventually the whole day has passed and I think you get the idea . 20 machines in a day = pretty much a full day

[RikaKazak]

Does coke have a set minimum or does it vary by part of the country etc? Just curious if I could call coke directly (with sellers permission) and see if he's meeting the minimum and if so by how much.

I think I'll still run the route with him wed. Worst case I work for free for a day and learn some things.

Thanks so much for the input guys I really appreciate it!

[SchligVend]

My rep says 100 cases a year min

[moondog]

Does coke have a set minimum or does it vary by part of the country etc? Just curious if I could call coke directly (with sellers permission) and see if he's meeting the minimum and if so by how much.

I think I'll still run the route with him wed. Worst case I work for free for a day and learn some things.

Thanks so much for the input guys I really appreciate it!

Coke quotas vary by individual bottlers, but with an $80 per month average per machine I suspect that these machines are not making their quota.

[Golfdogs]

I always work on my efficiency during services, and I usually end up averaging about 20 minutes per machine. That is averaging soda and snack machines mostly. Soda machines are faster, and slower snack accounts are not to bad, but when you go to load a snack machine that has sold over $100 it will take probably 30+ minutes. This is how it usually works out for me. 20 machines x 20 minutes = 400 minutes / 60 = 6.66 hours or 6 hours and 39 minutes plus drive time plus loading the vehicle plus shopping plus fuel fill plus this and plus that. Eventually the whole day has passed and I think you get the idea . 20 machines in a day = pretty much a full day

20 minutes a machine assuming some jackwad doesn't try the tape the quarter trick...

[allen watson]

Pass. Sounds like hot air to me.

[rmorris1953]

Like everyone says.... A lot of hot air .... And no Tax returns .....     

 

He still has bills from coke ask for those... It would not be hard to figure out if he is buying enough from coke to substantiate his claims. 

 

My guess is he isn't servicing all theses every week. Some every two weeks and some once a month. My other guess is he didn't pay anything for this route. Most likely Coke found someone who was willing to take on none producers because they didn't want to service them any more.

 

I have a customer who got about 200 machines on location from 7-Up that way. 7-Up gave up the entire route because they couldn't take care of it properly.  Not a dime. The only reason he did it was to have a foot in the door to see if he could place snack machines.

[Djstorman]

I would not waste my time with a ride along on Wednesday.  The only thing you are going to learn from them is how to pick crud locations and I would shudder working beside someone who is blatantly lying.

[RikaKazak]

Coke quotas vary by individual bottlers, but with an $80 per month average per machine I suspect that these machines are not making their quota.

Do you have a ball park figure of what the quota might be? (Just a guesstimate is good enough for me). Thanks man

[mojorhino]

I don't know what it is for Coke but with Pepsi in my area its 3 cases per machine per week.

[AngryChris]

For 7up, they want 70-80. I hear it's usually 150/year or more for coke or pepsi. With that said, you probably can't make it off of that route alone.

He probably already got contacted by coke and he's just trying to get money for nothing.

Think about something. If I had leased a car that the dealer owned, and I tried to sell the CAR to you, not the lease, with the agreement that you don't actually own it, would you buy it?

Here is another thing to think about. It can be difficult to rotate stock in machines that sell 1 case each week. Try rotating stock on 50+ machines. Good luck.

[moondog]

Do you have a ball park figure of what the quota might be? (Just a guesstimate is good enough for me). Thanks man

I think it starts at a hundred cases a year and can be bigger with some bottlers - and don't forget that bottler prices are about 10% higher than our normal sources like Costco and Sam's.  Just think, if you got this route you'd be on the hook for 5,200 expensive cases a year.

[SchligVend]

Do you have a ball park figure of what the quota might be? (Just a guesstimate is good enough for me). Thanks man

The coke rep in my area requires me to do 100 cases of Coke a year and Pepsi requires 200 cases a year but again every region is different.  You can call coke directly and just ask questions they may or may not talk to you about it but it doesnt hurt to try.   and like moondog said the costs are more, a few dollars per case for cans more for me compared to Sams club.

 

I only use their machines when it is absolutly nessesary or if I dont have the capital to buy a new or really nice machine.

 

 

 

Let us know what happens on your "work for free day" tomorrow .....

[RikaKazak]

So running the route was pretty interesting.  

 

Our first stop was at walmart to buy 4 cases of diet coke along with some cookies for the snack machines.  (the pickup was already loaded up with coke/fanta/others by the time I got there)

 

Then we went to the first location, and it did about $60...we refilled the coke owned machine with mountain dew in one of the columns, and red bull in another column.  This pattern continued for ~20 machines which was the total we did today.  With a total pull of $700ish.

 

About 1/3rd of the machines had mountain dew in them, or other non coke products.  I know coke won't like that.  Add in the fact they're coke owned machines and he's buying from walmart, doesn't pay sales tax, doesn't pay the commissions in the winter because "it's not enough to even care about," and he tossed all money collected into the same bag (so no way of knowing which location earned how much)...and it's a pass.

 

Of course you guys were right  Never thought for a second you wouldn't be (ok I lie, maybe for a few seconds I hoped you guys were wrong, lol).  But I did learn a lot about vending...just maybe on how "not" to do it lol.

I did learn that I do like full line vending.  Saying hi to people, driving around at your own speed.  I like the industry, hopefully someday I'll build a route capable of going full time.

p.s.  Not that I'd ever do it...but I wish some magic fairy would call coke, tell them he's vending mountain dew/ red bull / lots of other non coke products, have them get mad, boot him, and let me take it over and be legit lololol  

[AngryChris]

It would be kind of.. sort of mean but you could try to place your own equipment at some locations and give him the boot. He doesn't deserve much sympathy if he's doing it all under the table.

700 for 20 machines though... it probably does 700/week in the summer or maybe 550 each week year round. That's maybe 28,000. It would have taken you at least three years to break even.

He knows what the route does. He just won't reveal much cause he's a tax cheat and a liar. He's now trying to find some sucker to give him money before coke takes all their machines back and probably charge him for machines he sold illegally.