MartinNOLA Posted December 18, 2008 Share Posted December 18, 2008 I have an opportunity to purchase about 50 machines, 40 on location and about 10 extras, all are triple head SuperPro machines. They are grossing about $1000 per month. Buyer wants $3500. I think its a great deal, and have some, albeit limited, experience in the industry. Locations are pretty solid, some breakrooms, some restaurants. What should I watch out for and what, if anything, should I put in the sales agreement? Thanks in advance!!! Link to comment Share on other sites More sharing options...
alyssamma Posted December 18, 2008 Share Posted December 18, 2008 Martin, first, it is almost impossible to verify gross sales on bulk machines. If his numbers are correct, he is averaging $25/month/machine. This is a little above average ($21/month/machine is average). Second, almost all sellers overstate their income. Most by a lot. In reality, it is probably making $500-$750/mo. Even at the low end, $500 per month, paying $3500 is a pretty good deal. Another way to look at it is simply the machines. You are paying $70/machine (50 machines for $3500) which is great considering you are also getting 40 locations! Bottom line, go for it! Good luck and welcome to VENDiscuss. Kevin Link to comment Share on other sites More sharing options...
BluePlate Posted December 18, 2008 Share Posted December 18, 2008 I agree, gross numbers look high,but this is still a good deal. Link to comment Share on other sites More sharing options...
G-man422 Posted December 18, 2008 Share Posted December 18, 2008 Welcome to the forum Martin. You have been given some great advice already, but I will repeat it. Be sure to check on his numbers. Overall it sounds like good deal if the machines are in nice shape. See if he will go any lower though. Good luck! Link to comment Share on other sites More sharing options...
MartinNOLA Posted December 18, 2008 Author Share Posted December 18, 2008 How can I verify his numbers? He gave me a copy of his spreadsheet from when he bought them 13 months ago to present, but that doesn't mean it's worth the paper it's printed on, I know. I actually talked him down to $3200 split into 4 payments, so I take over the route with only $800 out of pocket. I did randomly checkout about 8 locations, and the machines are there and about 3/4 the way full (he just serviced his route about a week ago). He's anxious to sell because he's moving out of town next month. I really want his to go through but, what's that old saying? If it seems too good to be true ... Link to comment Share on other sites More sharing options...
alyssamma Posted December 18, 2008 Share Posted December 18, 2008 Martin, if he is willing to take 4 payments over time, close on this deal *now*. You're going to get 50 machines for $3200 - $64 each. That in itself is a good deal. Plus you are getting 40 locations...it doesn't matter if they gross $10/month. *Plus* you can finance over time. Do it now before he changes his mind... Kevin Link to comment Share on other sites More sharing options...
West Coast Vend LLC Posted December 18, 2008 Share Posted December 18, 2008 Welcome to the forum Martin. I think it's a great idea that you are paying for the route in 4 equal payments. You will be able to see after the first couple of months whether his numbers were accurate or not. At that point you may even be able to negotiate the final price again. As far as his numbers, he is probably giving you his best average sales in a month. Gary Link to comment Share on other sites More sharing options...
MartinNOLA Posted December 18, 2008 Author Share Posted December 18, 2008 His spreadsheet is surprisingly thorough, amount collected from each location for each of the 13 months (so, a spreadsheet of about 40x13, or 520 cells). If it was faked, he took a lot of time to do it. He bought all the machines at once and used a placement service. The 1st month showed only 10 or so placed, the second up to about 25, and all 40 placed by the 3rd month. I just got an e-mail and we are doing the deal tomorrow. I'm excited to say the least! Link to comment Share on other sites More sharing options...
alyssamma Posted December 18, 2008 Share Posted December 18, 2008 Martin, again, congrats. It sounds like you got a great deal. Link to comment Share on other sites More sharing options...
G-man422 Posted December 18, 2008 Share Posted December 18, 2008 Way to go Martin! That's a great deal, congratulations. Link to comment Share on other sites More sharing options...
Beer980 Posted December 18, 2008 Share Posted December 18, 2008 Is it a charity route or commission type? Does any product come with it? How spread out is the route? Are these payments every month or quarter? Put something in the contract that if said revenuse does not produce before the next payment then the purchase price needs to be lowered by the percent difference. If you get 4 month before the next payment then you will have an idea on income. If you are averaging $800 a month then the route payments should be adjusted down 20%. It does sound like a lot of spreadsheet entries to fake so it sounds legit but you never know. I have a route book that has a page for each location that I handwrite in the info every time I service. When I go to sell my route I will get my monthly average off all these sheets whether anyone believes me or not is another story. At least it will show all my service days and what each product sold from month to month. Link to comment Share on other sites More sharing options...
MartinNOLA Posted December 18, 2008 Author Share Posted December 18, 2008 It is a charity route. He serivced the route at the beginning of last week, so all the machines are full. He also gave me about 10 fresh bags of product he had from his servicing as well as the stickers. I made the first payment today, and I wrote in 5 days to visit all locations to check on condition in the BoS. The next payment due Feb 1 2009, and then 30 - 45 days thereafter, with an option to extend due date if sales are below the amount he claimed. The route is split in two separate clusters about 25 miles apart, and I live directly between the two. I couldn't pass on this one. I'm going to visit all locations tomorrow to check them out and will let y'all know how it goes. Link to comment Share on other sites More sharing options...
Beer980 Posted December 19, 2008 Share Posted December 19, 2008 Yep at least you seem to have covered yoursef in the contract somewhat. Sales are typically lower this time of the year so keep that in mind. Link to comment Share on other sites More sharing options...
MartinNOLA Posted December 23, 2008 Author Share Posted December 23, 2008 So, I went out and serviced 36 out of 39 locations over this weekend. Some were less than stellar and some were better than I expected. Seller told me he serviced the machines about two weeks ago, but I seem to doubt that at some of the locations. Overall, all locations are between 3/8 and 6/8 full with only 4 heads below that amount, so I have a good amount of product out. The take so far is about $350. So, with no effort, I have almost half of my initial investment back (still have to service his highest grossing location though). It's hard to tell if the $800 net will materialize, we will see. I have to use some of the take to add some product (mostly jelly beans, oddly enough), but I'm wondering if I should take the bulk of the money and have those last 10 machines located for me. Maybe 3 this month, 3 next month. Any thoughts on this idea? My other idea is to just pay myself back for the initial investment and see what happens when I service in January. Link to comment Share on other sites More sharing options...
Beer980 Posted December 23, 2008 Share Posted December 23, 2008 I think I would put the money towards product and the next payment. Locating companies right now are possibly short staffed with the holidays or having trouble locating because of the holidays being a difficult time to get new locations. Towards the middle of January you might consider having a couple located. We are planing to have a locating contest between some of the top locators on the board and it would be great if you could participte in it. More details to follow but you would buy a loaction from two different locators and we would track the results to see how they stack up to each other. Link to comment Share on other sites More sharing options...
MartinNOLA Posted December 23, 2008 Author Share Posted December 23, 2008 That sounds like a great idea, I would love to participate. Link to comment Share on other sites More sharing options...
Beer980 Posted December 24, 2008 Share Posted December 24, 2008 I will send you a PM after the holidays about the particulars. If anyone else is interested you can send me a PM. I will put out a last call before we start like before. Link to comment Share on other sites More sharing options...
sterling Posted December 24, 2008 Share Posted December 24, 2008 Sounds like you did it right. Now take the bottom 10% producing machines and find new homes for them. Link to comment Share on other sites More sharing options...
Outlander Posted December 26, 2008 Share Posted December 26, 2008 Sounds like you have gotten a very good deal with excellent term and even some great advice. Best of luck to you in '09. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now