joebob051977 Posted March 20, 2009 Posted March 20, 2009 I am trying to wheel and deal to get a route. The person claims that he collects $150-200 every 2 months ($75-100 monthly) from the route. I went out to the locations The route consisted of 16 locations. His best location, the YMCA did not have a machine there, and 2 other locations wanted the machine gone. So we are down to only 13 locations. He wanted $50/location with machine. The orignial asking price was $800. I only have $300 total. Using 35% COGS I figure that the profit is actually around $32.50/month after the loss of the 3 locations. He is willing to do owner financing, but I don't want to go that route if I don't have to. How would you negotiate the deal? I am thinking about offering him $300 cash and expecting to counter with $250 and telling him he can have the money currently in the machines which is $150-200 according to him. What would you do?
lurtsman Posted March 20, 2009 Posted March 20, 2009 The number of machines sounds good for what you are offering. The locations themselves sound like dogs if 13 machines on locations provides a net monthly profit of 32 dollars and 50 cents.
nam Posted March 20, 2009 Posted March 20, 2009 joebob, If you are short on cash you may be in trouble getting fresh candy in those machines. If he is willing to finance then let him so you'll have money for fresh candy, etc. Offer him some cash down and let the machines pay for themselves. Really sounds like he is ready to bail out and you are in a great position here. Take advantage of his offer. nam
joebob051977 Posted March 20, 2009 Author Posted March 20, 2009 I could only believe the low end when he says $75-100/mo for the 16 machines. Many of the machines are in poor locations. Some of them are in good locations and just need moved to a better spot within the location and maybe a better selection of better selling candy.
nam Posted March 20, 2009 Posted March 20, 2009 If you get this route you should move as many machines from one location to another. Not just within the same location but trade machines out so people see there is a different machine. If they have bought stale candy out of the machine it may take longer to win them back again. Switch machines so they will know theres a whole new vendor, machine, etc. asap. nam
nepavend Posted March 20, 2009 Posted March 20, 2009 Every route you buy existing will need work and upkeep, moreso than when you locate yourself, to integrate the new locations into your "systems". Sounds like you can get a decent offer here, I would keep at it and land them, then roll up your sleeves and optimize where you can and upgrade/downgrade and change products as needed. Eliminate bad selling products and keep lower cost or better profit products. If the spots do bad with candy, try gum/toys if you can.
joebob051977 Posted March 20, 2009 Author Posted March 20, 2009 Well, I offered $300 cash. He said he'll think about it. Im hoping he bites or at least comes down to a more reasonable price than $800
nam Posted March 20, 2009 Posted March 20, 2009 You did good! Bet he bites or at least makes you a way lower offer. nam
joebob051977 Posted March 21, 2009 Author Posted March 21, 2009 I hope he is anxious enough to get rid of this route that he takes the deal. I initiated the deal so I can let if fall through we don't come to an agreement. The route will still be there 2 months from now. I must admit, I'm already excited about the challenge of making his machine the primary machine at every location, and relocating the dogs.
Beer980 Posted March 21, 2009 Posted March 21, 2009 I would let him know if he counters that you will need to think about it now because you are working on another deal. Say you are considering the best deal for your situation with the money you have to work with and need to crunch the numbers first. If you twitch the bait like that he may drop the counter offer even lower towards your price. That is what I would do if it was me. ****** him like a hungry bass.
joebob051977 Posted March 21, 2009 Author Posted March 21, 2009 I like it! Add a rogue element in there and make him play chicken.
joebob051977 Posted March 22, 2009 Author Posted March 22, 2009 Well, apparently the guy needs to think really hard because he has not called be back. I'm not going to call him back, at least not yet. I might consider calling him next month and offering $300 again, but I'll be prepared to go up to $350 by then if I need to. Who knows I might p/u one of those rollercoaster machines I saw in the craigslist section instead.
nam Posted March 22, 2009 Posted March 22, 2009 joebob, You are right in not calling him back. The first one to call is the losers. If you call him it shows you must really want the machines and he'll be less likely to drop his price thinking he is now in control. You want him to call you. Roller Coasters are cool as well. Did I post a Roller Coaster in your are too? Can't remember? nam
joebob051977 Posted March 22, 2009 Author Posted March 22, 2009 There's 2 in Cinci, 'bout 3 hours aways. I'd be a good opportunity to visit my brother there.
Beer980 Posted March 23, 2009 Posted March 23, 2009 Just let it soak in for a few days. He will call if he really wants out and gets no more interest in the ad. If your's is the only offer he has had then he may need reality to set in first.
joebob051977 Posted April 2, 2009 Author Posted April 2, 2009 Just an update on this deal. The guy said he'd think about the deal. He never called back. Do you think I should wait a month or two and then re-offer $300, or offer a little bit more to show that I am willing to negotiate?
nam Posted April 2, 2009 Posted April 2, 2009 It's of course depending on how bad you want this route. I'd wait him out and not call him unless you just can't stand not getting this deal. Is he running ads trying to sell it? He probably won't have much luck even if he trys. If he still has your number I still think he call you. If not - oh well. Buy some other machines that you'll also get a good deal on. This won't be the last deal to come your way. Calling would just make him think he's got you now as you must want the machines worse than he wants to sell them. You need to keep the thinking along the lines of you don't care and you really don't need his machines either. Just my opinion and you do what ever you want to do as only you can make that decision. nam
Beer980 Posted April 2, 2009 Posted April 2, 2009 If you really want them then give it a few more days before you call. Then tell him you are just checking to see if he is still considering your offer. If he has not decided then say you kinda need an answer from him or you will need to take advantage of another deal. You can still pass and wait another month or so to see if he still has it this way.
joebob051977 Posted April 2, 2009 Author Posted April 2, 2009 He isn't running ads or anything. I contacted him since I saw a machine of his and the owner wanted it gone. I will probably give him a couple more days since I am in no hurry. I like your idea Beer.
lurtsman Posted April 3, 2009 Posted April 3, 2009 The title certainly was fitting. Wheelin and dealin indeed.
nepavend Posted April 3, 2009 Posted April 3, 2009 Some great suggestions are made here, the best being just to keep moving on looking for deals, there will always be those sellers who just disappear. I have two deals I am working on and one has already disappeared. So the moral of the story is to have a set budget, try to satisfy that requirement by finding the best deals you can, and put the pressure on sellers to either come up with the deal you want or you are on to spend your money elsewhere.
davidsurvz Posted April 3, 2009 Posted April 3, 2009 The key to negotiating is being able to walk away from the deal at anytime. There will always be deals out there. I agree with Joe above. Try to have a set budget and keep researching. With any deal be able to walk away from the negotiating table at any time that way the pressure is off you and on the seller. Also, be patient just know that if "this deal" doesn't work out there WILL for sure be another great opportunity down the road. People are practically giving machines / routes away. Not all the time but if you wait and watch you will find the deals. It has taken me over a year and a half to get up to where I am and I still have a long way to go. I haven't gone into debt at all and I have found some amazing deals REALLY AMAZING DEALS! I am sure you will be able to make some good scores, just keep looking. We wish you the best David
Beer980 Posted April 3, 2009 Posted April 3, 2009 The main idea behind negotiating is to avoid the main pit fall. Do not fall in love with the product and let it be known. Even if you do fall in love with it pull out your best poker face and calm down. If you went onto a car lot and told the salesman that was trailing you that you absolutly love that car they will pull out all the stops to get you in that car. That is the good news. The bad news they will try to get as much out of you as they can because you "have to have it". Now if you are looking at it with the attitude that you can take it or leave it you will get a better deal. Apply this to whatever you are going to negotiate in the future. It will work for buying a route, used machines, cars, used boats etc. Just control the deal and be prepared to walk away. Sure you may loose some deals but when you win it will make up for it. Just make it your terms , always.
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