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Reasonable amount to pay for route


jt66250

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I want to purchase already placed coke and snack machines in my area and I have a parameter in place for what I want to pay. Is an offer where I can recoup my investment in profit within 12-15 months a reasonable amount? What amount do some of the experienced vendors use, as I am just getting started in the business.

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You are asking a very vague question here. If you want to buy accounts that will net the purchase price back to you in 12 - 15 months then you'll need to find some very strong accounts (which cost more) or pay a very low price for some accounts (which will have poor sales). You can see that those two scenarios are actually a catch-22 and until you find an account for sale with PROVEN numbers you won't know if the price for it will allow the ROI you're looking for.

In other words, there are no rules and every deal or account has to be judged on its own merits.

There are no sure things in business and that's true in vending as well.

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Generally, the answer to your question is no. If you net 33% after all costs, you'd need to pick up an account doing $600/month for $2400/$3000 max for your parameters. Not unheard of but you didn't ask that, you asked for reasonable. Most sellers would be asking around $6-7k for this account and would need to be fairly desperate to take less than $4500. And you'd be pretty lucky to stumble upon that seller before someone else did. Generally speaking, double your numbers is closer to reasonable. But great deals do fall into your lap from time to time.

This is assuming TON of averages which can vary widely as AZ stated. Your mileage may vary.

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I want to purchase already placed coke and snack machines in my area and I have a parameter in place for what I want to pay. Is an offer where I can recoup my investment in profit within 12-15 months a reasonable amount? What amount do some of the experienced vendors use, as I am just getting started in the business.

The first thing that you'll find when purchasing existing routes is that you'll end up looking at many before you find one that works for you.  Most routes for sale tend to be some guys bottom feeders he's trying to dump and you'll need to avoid these.  For me, the value of a route consists of three elements; one the value of the equipment, two the revenue stream and three the fact that it's already located with no moving or vetting costs associated.  Vetting costs relate to the time it took somebody to find a location and hope it was profitable and I've spent a great deal of time doing this so I can tell you it ain't cheap.  When I consider purchasing a route, I generally will offer fair value of equipment and inventory plus three months gross (or six months profit).

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The way I go about buying a route or a single account is I give no value to the machines ZERO most of the drink machines are Coke of Pepsi assets which did not cost them anything and the snack machine will have something wrong with it or will have to be upgraded. Then the numbers 90 percent of the owner of the machines will inflate the sales. If they tell me the sales are 300 a week I cut it in half to 150 a week. Take a walk around the account if it is blue collar say 50 men or more sales will be pretty good but if it is 50 women your sales will be half than a 50 men account. Take a hard look at the machines if they are beat up this will mean it is what we call down South as a thug account do not buy this one it will cost you more than it is worth and they will shake the machines to steal the products from it .I never pay much for accounts because their is a reason for them wanting to sale it. if the account was good it would be not reason to sale it. JT always remember you are it this to make money 

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The way I go about buying a route or a single account is I give no value to the machines ZERO most of the drink machines are Coke of Pepsi assets which did not cost them anything and the snack machine will have something wrong with it or will have to be upgraded. Then the numbers 90 percent of the owner of the machines will inflate the sales. If they tell me the sales are 300 a week I cut it in half to 150 a week. Take a walk around the account if it is blue collar say 50 men or more sales will be pretty good but if it is 50 women your sales will be half than a 50 men account. Take a hard look at the machines if they are beat up this will mean it is what we call down South as a thug account do not buy this one it will cost you more than it is worth and they will shake the machines to steal the products from it .I never pay much for accounts because their is a reason for them wanting to sale it. if the account was good it would be not reason to sale it. JT always remember you are it this to make money 

Amen to the thug accounts - if their management allows that type of behavior there's nothing you can do to combat it.

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