is tis route worth it

[jkhogan21]

 2 Vendo 721

2 ams35 glass front

ams32 glass front

Three locations. They are in rehab facilities. Both the staff and patients can use. All have cc readers and the prices are really good for products. They do 1k a month total for all of them. But this guy got into the business for side money and never had time to fill the machines. Went to go see these acounts yesterday and 97 percent of all the machines were empty. Also couple of the workers there said we cant buy anything because there is never anythong on there. I got him down to 15k tell me what you guys think of thos deal.

 

[AZVendor]

I'd try for 10k but no more than 12k tops.  But nothing unless you're sure you won't lose the accounts due to their lack of service.  Him getting kicked out could be why it's for sale. 

[AngryChris]

I agree with AZVendor.  Due to the circumstances, the accounts are only worth the equipment.  Those machines could be anywhere from brand new to 7+ years old.  I would say $2,000 per machine is fair, which is $10k.  You could buy new machines for $15k.

[jkhogan21]

i fogot to say his family owns the places so i will never get kicked out. Also he is going to sign a year contract. machines arent even a year old.

[AngryChris]

It's entirely up to you, but i would give the account no value.  You should ask for a copy of the reported sales from the card readers.  If all cash and credit sales are reported, and total reported sales are less than his claimed sales, then you are purchasing duds.  However, if the reported sales do at least what he claims, then there might be room for sales growth.

[jkhogan21]

yes i saw the reports. they show cash and cc sales. its rt around 3k

[AngryChris]

3k over what period of time?

[jkhogan21]

3 months

[AngryChris]

Then that's good to know.  Just keep in mind that 1k/month between 5 machines isn't great.  You still deal with expired products.  I know you already got it down to 15k but i think that's high.  Do you already have accounts?

[jkhogan21]

yes have 52 accounts. im just thinking he is barely servicing these accounts and i know i can do alot better then him so i know my sales will go up.

[AngryChris]

If you are already seasoned, and you feel the equipment is worth the price you agree on, then there is potential for a significant sales increase if everything you have said is true.  You might need to make sure everyone knows there is a change in management so that things improve faster.

[lacanteen]

$12K is 100% of annual sales. Pretty much top dollar for any situation. If you increase sales by 25%, that's $15K, still top dollar if you pay that. 

[jkhogan21]

the machines have any value?

[AZVendor]

Of course they do.  They are all great machines to operate.