tasty Posted October 13, 2014 Share Posted October 13, 2014 25 stops and 45 total machines. $86,000 yearly gross sales. good brand machines from 90's and up. no truck, asking $85,000. really want to buy it. but is it worth the money? what is the net profit on this one? 35%? Link to comment Share on other sites More sharing options...
jerry1973 Posted October 13, 2014 Share Posted October 13, 2014 you would need to see his records and product prices before you could calculate a profit percentage. 1x gross sales is a little steep in my book, and if everything checked out good with at least 2 years of records (preferably 3 or more) then I would offer him much less and let the negotiations begin from there. Link to comment Share on other sites More sharing options...
tasty Posted October 13, 2014 Author Share Posted October 13, 2014 you would need to see his records and product prices before you could calculate a profit percentage. 1x gross sales is a little steep in my book, and if everything checked out good with at least 2 years of records (preferably 3 or more) then I would offer him much less and let the negotiations begin from there. what records do they have? it is all (most) cash business. I mean what to ask for from the seller for proof of sales? Link to comment Share on other sites More sharing options...
jerry1973 Posted October 13, 2014 Share Posted October 13, 2014 yes, and they should have tax records that should be able to see also. If they are running a legit business, they should have records. If they are running a shady operation where they don't claim their earnings, then I would recommend passing completely (unless you can get the price down very low, then start doing things right). Also you need to get a list of all the machines on the route to determine the value of those. If the equipment is old obsolete stuff that you cant get parts for anymore, then that will drastically lower the value. It might be an awesome opportunity, or you could lose your investment money, the devil is in the details. Link to comment Share on other sites More sharing options...
AZVendor Posted October 13, 2014 Share Posted October 13, 2014 Tasty, we still can't see with our ESP so we don't know the details you are asking us about without more information. 1. "what records do they have?": If they are legit then they should have route collection records that shows how much money was collected from each machine at each service. This information could be on paper, in a computer or preferably both. You need this information for at least a 1 year period. 2. "what is the net profit on this one?": The gross profit can vary by machine and account and is always a function of the prices of the products, the costs of those products, the volume of the location and the commission paid, if any. The net profit is the gross profit minus your operating expenses such as vehicle expenses, taxes, insurance, payroll, repairs, equipment purchases, etc. 3. "is it worth the money?": That is entirely up to you as the price of any object is what a buyer is willing to pay. Be very careful - your comment of "really want to buy it" is dangerous because it means you aren't thinking as a business owner, but as an excited little kid. The value will be based on the actual models of machines, the condition of the machines, the prices of the products, the commissions paid, if contracts are in place, etc. I will give you a start: $85000 divided by 45 machines divided by 52 weeks equals $36 per machine per week. Those are very weak sales. Some of the accounts will do more than the average and some will do less. It's very possible that there is one account with one or more locations that make up the bulk of the sales, so you need to be aware that if you lose the big account you will lose most of your sales, too. This is why you need much more information. Take your blinders off and be smart when you ask your questions of the seller. Link to comment Share on other sites More sharing options...
tasty Posted October 13, 2014 Author Share Posted October 13, 2014 yes, and they should have tax records that should be able to see also. If they are running a legit business, they should have records. If they are running a shady operation where they don't claim their earnings, then I would recommend passing completely (unless you can get the price down very low, then start doing things right). Also you need to get a list of all the machines on the route to determine the value of those. If the equipment is old obsolete stuff that you cant get parts for anymore, then that will drastically lower the value. It might be an awesome opportunity, or you could lose your investment money, the devil is in the details. most of the machines in this route are DN 501T and AP LCM. are they too old for the price? Link to comment Share on other sites More sharing options...
AZVendor Posted October 13, 2014 Share Posted October 13, 2014 The DN501T is a can machine, 3 cans deep. These machines could be from the 80's and early 90's. With modifications they can sell larger products but with a very limited capacity and only if the machines are multiprice. You probably have all cans on this route, which is a good thing for a beginner, but you will need to upgrade the machines in order to add bottle products later, if you ever decide to offer them. The AP LCM is a good machine and was built in the mid 90's. LCM stands for low cost machine and was called that because it was not as fancy as the main production machines from AP at the time. The machines used 12 pin, 24 volt coin mechs and 24 volt validators only but later ones were capable of having MDB mechs and validators added. The vend motors are specific to the LCM and the C series machines only, so if you need a new motor you can't use a mainstream AP motor. The cabinets were available in 4 wide, 5 wide snack or 4 wide and 5 wide combo machines that had can modules in them. I ran many of both models on my routes and I continue to repair them today. They are good, long-lasting machines. I also stock parts for either machine so if you buy this route you can PM me for anything you might need. I also believe that asking one year's gross sales is too high for this route, but you haven't answered all the main issues such as the price of the products and if there are commissions paid. There is more to the price determination than the equipment alone. The 501T's are probably worth $400 to $800 depending on model and condition. The LCM's are probably worth $800 to $1100 depending on model and condition. Link to comment Share on other sites More sharing options...
jerry1973 Posted October 13, 2014 Share Posted October 13, 2014 What AZ said Link to comment Share on other sites More sharing options...
tasty Posted October 13, 2014 Author Share Posted October 13, 2014 The DN501T is a can machine, 3 cans deep. These machines could be from the 80's and early 90's. With modifications they can sell larger products but with a very limited capacity and only if the machines are multiprice. You probably have all cans on this route, which is a good thing for a beginner, but you will need to upgrade the machines in order to add bottle products later, if you ever decide to offer them. The AP LCM is a good machine and was built in the mid 90's. LCM stands for low cost machine and was called that because it was not as fancy as the main production machines from AP at the time. The machines used 12 pin, 24 volt coin mechs and 24 volt validators only but later ones were capable of having MDB mechs and validators added. The vend motors are specific to the LCM and the C series machines only, so if you need a new motor you can't use a mainstream AP motor. The cabinets were available in 4 wide, 5 wide snack or 4 wide and 5 wide combo machines that had can modules in them. I ran many of both models on my routes and I continue to repair them today. They are good, long-lasting machines. I also stock parts for either machine so if you buy this route you can PM me for anything you might need. I also believe that asking one year's gross sales is too high for this route, but you haven't answered all the main issues such as the price of the products and if there are commissions paid. There is more to the price determination than the equipment alone. The 501T's are probably worth $400 to $800 depending on model and condition. The LCM's are probably worth $800 to $1100 depending on model and condition. Drink Pricing: Cans .75 Bottles 16.9 $1.00 Bottles 20oz $1.50 Snack Pricing: Chips: .60/.75 Caddy .90/.95 Danish: .95/$1.00 don't know how to add files here. so can show you more details Link to comment Share on other sites More sharing options...
AZVendor Posted October 13, 2014 Share Posted October 13, 2014 As I recall, you're in Canada so those prices sound a bit low, especially since candy is the US should be at $1 (easy to change yours), big chips are at .85 and pastry is at least $1 and usually more. The soda prices are okay if there's no commission, but I still think they're too low for Canada. To add files, click the More Reply Options button below the reply window. Then click the Browse button under Attach Files and find the file you want to upload on your computer. Double click the file on your computer and come back to this window and click Attach This File. That will upload the file to your post as an attachment. Finish by clicking the Add Reply button. Link to comment Share on other sites More sharing options...
AngryChris Posted October 13, 2014 Share Posted October 13, 2014 what records do they have? it is all (most) cash business. I mean what to ask for from the seller for proof of sales?I have "proof" of my sales. It's called a tax return. It shows my revenue, expenses, and profit for my business. My revenue is 99% cash.I can also match my tax return with my route cards. We aren't advising you to get a tax return to see if he's actually being honest with the government, we are trying to see if he's being honest with YOU. Almost no one is going to want to pay more taxes than they are supposed to, so it's generally safe to assume that the income they reported to the IRS is the maximum income. If some claims they made 100,000 in the last year, but their return only shows 80,000, then it's probably safe to assume that he's at LEAST cheating the government. He might do that to you as well. If his returns match his stated gross revenue, then it's pretty safe to assume that the deal is legit. If he has no tax return or the return shows FAR LESS than what he stated, then use that to negotiate a lower price. Being a cash business does not mean that you are exempt from taxation. And a dishonest person is a dishonest person. Link to comment Share on other sites More sharing options...
Growliebusters Posted October 14, 2014 Share Posted October 14, 2014 Drink Pricing: Cans .75 Bottles 16.9 $1.00 Bottles 20oz $1.50 Snack Pricing: Chips: .60/.75 Caddy .90/.95 Danish: .95/$1.00 don't know how to add files here. so can show you more details If your in Canada, minimum pop price for cans is 1.00. Chips 1.00-1.35 depending on what you can get away with. Chocolate I have at 1.35 and 1.50. I just saw a vendor today at the vet where choc is still at 1.25(to low). I don't have Danish yet but I do have large choc chip cookies at 1.25 Don't be afraid to match the local gas station, you'll never match the big stores so.why try. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.