edyrlund Posted August 21, 2017 Share Posted August 21, 2017 Guys I am new to this and have been looking to purchase an existing route. I work full time 3 days a week and am very mechanical so I thought this would be a good fit for a side business. I am looking at a business that has been in business 34 years the owner is retiring. He has 100 locations, 175 machines in 3 counties and is asking $313,000 for all the machines and locations. The gross sales were $332,000 last year. I am looking to just purchase the machines and locations closest to me. That would be 35 locations/75 machines. These gross $150,520 last year. The machines are National snack machines and Dixie Narco pop machines but none are set up for credit cards and most do not have the MBD on the control board. He also has 40 or so machines in a warehouse that could be included for more $. He is the kicker, he has no contracts. He has been doing it so long they have not had contracts. According to him all the locations have said they would give the new owner a chance provided they supply good service I am thinking of purchasing the 35 locations and approx. 10 extra machines for parts/new locations and at around 115K Does this sound like too big a route for 3 days a week and a reasonable offer Thank you in advance for any help Link to comment Share on other sites More sharing options...
lacanteen Posted August 21, 2017 Share Posted August 21, 2017 You are better off buying 1 decent account to learn on, then moving forward on your own, By the time you upgrade the technology and learn the business, you will be retiring as well. With the information you provided, the total deal would be worth less than 50% of gross annual sales. Your alternate deal of $150K in annual sales only averages $2K per machine. The sweet spot is $5K. None of this is adding up to a good start. Send this forum $100 and that's the most you'll lose. This month. Also, $332K in sales to a newbie would either kill you or send you on a serious bender. Link to comment Share on other sites More sharing options...
AngryChris Posted August 21, 2017 Share Posted August 21, 2017 150k would make you possibly have to quit a full time job. On top of that, a loan payment would eat up a lot of your profits, if not all, for several years. You would be without income or very low income until it is paid for. You need to check his pricing too. If it is low, you'll be in trouble. Link to comment Share on other sites More sharing options...
edyrlund Posted August 21, 2017 Author Share Posted August 21, 2017 I agree I figured that 100 locations and 330k in sales would do me in plus they are located over a pretty large area. That is why I looked at the closest ones to me. Those 35 locations are all with in 15 miles of my house. I thought about the 1 account but thought this might be an opportunity to have established locations to start with. I was concerned on the price, lack of contracts and age of machines. Thank you for the help I'm trying to get as much information as possible to make the best decision Link to comment Share on other sites More sharing options...
CapitalCityVendingLLC Posted August 22, 2017 Share Posted August 22, 2017 If the equipment is aged then that can and will become a problem as time marches on. Having newer equipment can make a world of difference when it comes to working a route. As angrychris said, if his prices are low that will be an issue. In our area, there is 2 older vending companies similar to the one you are looking at. Both of them have much lower prices than all the other companies around here. If I had to bet, I'd bet that this guy's prices are fairly low since he's been around forever and has older equipment. Also, the 35 accounts/75 machines is a pretty big chunk to start with. How do you know you are going to even like vending? Just speaking from a conservative point of view. I'd hate for you to dive into that big of a pool head first and then realize you hate vending after 3 months. Not saying that would happen to you but it's almost like asking someone to marry you after a couple dates. Could backfire on you. As for working that route, doing around 150k a year in revenue as a side gig, might be pushing it. It's do-able for someone that knows how to run vending company but for a first timer, it could be overwhelming. Most people just see the guy filling up the machine and getting the money out. I know you know there is more to it than that, I just think you may be underestimating the time and juggling that goes on. Especially with older equipment. How sure are you of the validity of the his numbers? Could he somehow get some of those accounts under contract? Is there a smaller chunk that you could potentially buy? Maybe something like 15 accounts/30 machines doing 60-75k a year. That would hopefully bring you 25-30k in profit at the end of the year, given that his prices are respectable and nothing crazy happens. Could work that in 1.5 days a week give or take as you see if you like vending or not. Then go from there. If you could do that, and then potentially buy more of his route later that could be a good option. Is there anyway you could shadow him before you make up your mind? You could gain more information about the whole decision buy watching him do his thing for a couple days. Sorry to ramble, but there are soooooo many factors that come into play when it comes to buying a vending route. Link to comment Share on other sites More sharing options...
Corvus Corax Posted August 22, 2017 Share Posted August 22, 2017 I purchased a 35 location 60 machine route for 70k plus product and machine coin. Basically another 10k. I own about 37 machines, and the rest are leased from Coke or PepsiCo. Most are MDB. If most machines in you sale are not MDB, then you are looking at replacing all or most of the machines. Your need to know what machines you own outright, how many are bottle, how many are can, and what make of snack machines you have. What will you be servicing the route with. Do you have a van or a truck with a cap. Don't rush in, you may find out its not for you. Better to find that out with 5 machines, instead of 35. Link to comment Share on other sites More sharing options...
edyrlund Posted August 22, 2017 Author Share Posted August 22, 2017 Thank you for the replies I am going to ride the route with him next week and I am thinking about a smaller chunk of the route I am going to try and feel him out but if he sticks with his asking price of about $3200 per location I may have to just walk away it sounds like the value would be closer to 500-800 per machine if I am figuring correctly Link to comment Share on other sites More sharing options...
AZVendor Posted August 23, 2017 Share Posted August 23, 2017 Older machines that are not updated to newer MDB peripherals are only worth craigslist prices. As others have said, if he's neglected his routes like that then he probably also has very low prices. Link to comment Share on other sites More sharing options...
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