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GB Dragon Route is All yours


GumballDragon

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Its been a pleasure meeting and interacting with all of you guys and girls!  I recently took on a massive project that requires me to go overseas for many months at a time.  I initially thought i could handle both, but NO.  I was in China for 3 months, and now I need to continue going back.  This is an amazing chapter in my life, but also sad to say goodbye to my awesome GB Dragon Route.  I have approx 80-85 locations, with over 18,000 USD in deposits alone for 2018.  

*If you have any friends in NC area, specifically Raleigh, Durham, Burlington Area, please have them contact me.  Best offer, get this route with all machines, locations, parts, and spare machines.  Its all YOURS.  FIrst come, first serve.  This is charity route, no commissions.  

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Thanks!  I got a couple offers, but they were insanely too low.  Does anyone have experience selling or purchasing a route?  If I gross 18,000 - 19,000 per year, should i list for 18,000?  Is that too high, or is that about right?  

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7 hours ago, GumballDragon said:

Thanks!  I got a couple offers, but they were insanely too low.  Does anyone have experience selling or purchasing a route?  If I gross 18,000 - 19,000 per year, should i list for 18,000?  Is that too high, or is that about right?  

     You will find alot of varying opinions on this topic so here’s my 2 cents. I have bought lots of routes over the years some big, some small. I value charity bulk vending routes based on "asset only" meaning I could care less whether it's on location or not because I am paying only what the machines are worth in my opinion. The reason I don't entertain the annual gross sales concept when buying a charity bulk route is because locations are fluid so you are always losing some and gaining some (hopefully). Every route has some heavy hitters that account for a large percentage of the route's overall gross sales, then you have a lot of industry standard earners and finally a fair share of dogs that probably need to be relocated. I could, by no fault of my own (ownership change, remodel, closure, etc...) lose 5 of the heavy hitting locations within a couple months of purchasing the route. That would be a real killer to my ROI and possibly prolong it for years because replacing those types of stops just isn't easy. So if I purchase based on the route’s gross income I put my investment at a substantial risk in contrast to when I buy just the asset. I try to give a competitive price for the equipment and explain to the seller how I arrived at that price. I don’t want to waste someone else’s time or my own so I don’t low ball and I pay cash.

     Some sellers don’t agree with this concept especially if they haven’t gotten their full ROI yet and I understand that.  I’ve had people tell me no way initially only to come back later and agree to my terms because they realized my offer was the best cash offer they would ever get, So many people, generally all vending novices, don't have thousands of dollars available to buy a vending route so they want to buy on contract. If you are good with a contract sale I say go for it but my experiences have shown many sellers don't want to hassle with maintaining a payment plan or the risk of non-payment down the road. Most people would chose a one time cash payment so they can move on with life. If your operation is in the black and have paid everything off anything you make off the sale is profit and overall it was a successful investment. If you are in the red maybe a contract sale is your only option to recoup.

     One final note. If you do want to sell a route based on sales then be prepared to show your taxes to prospective buyers to prove the route income. If you aren’t willing to do that or you didn’t report the income people will be hard pressed just to take your word for it. Whatever way you go good luck with the sale.

 

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That's a very good response and I appreciate the details you provided.  Fortunately, I have one business bank account, where ALL my business activity exist.  I kept a PDF for each month, 2018 business bank statements, as well as the Cost of Goods Sold, to prove my gross income and expenses.  Your response definitely makes sense about the charity vending route.  Even though I'm able to provide business bank statements to prove 19,000 in coin deposits, i can see why most of the offers are lower. 

*In my case, if I had 80 locations, mainly single GB, with 19,000 in coin deposits; how much would be reasonable to accept???

*btw, my avg is 20.00 per location; hard to believe, but i pulled and relocated machines NON STOP my first 12 months; and anything below 6.00 per month, i pulled asap.  my strategy did change toward the end; but my first 12 months, i established a serious base using that method.

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     I think showing business deposits would satisfy most people wanting sales figure verification. Your location average is high and it shows what staying on top of relocating equipment can do to help sales. Pricing the route is always subjective so I can't throw out a figure that is the right price for you to list it at. If you are wanting to incorporate sales into your asking price determine what your equipment is worth then add on whatever percentage you feel is fair compensation for the consistently strong sales volume you created. Things that help move your price up would be: equipment brand & condition, geographic location grouping (is the route grouped tightly or is spread out over a large area?), and type of locations (long standing businesses, restaurants, etc...). These are selling points that you want to be able to provide answers to with confidence if asked or be able to bring up to bolster your asking price.

     I would encourage you to reach out to competitors in your area to see if they are interested in buying the route. Existing operators may be willing to pay a little more because your locations may fit into their established routes. Put the route on Craigslist and other local sales boards as well but I bet you have already done that.

     At the end of the day you need to ask yourself what is the lowest amount you can accept to sell the business at this time, then what you would realistically like to get out of the business and then be willing to negotiate with people. It seems like time is of the essence for you so lowering the price will obviously help sell it quicker. If you are not getting much interest at the current asking price don't be afraid to lower it incrementally until you do. Finally (I don't see this happening with you) don't just let the route deteriorate because you are not getting the asking price you are looking for. I have seen this happen a lot especially with older Fordway charity routes. It hurts the bulk vending industry, is a disservice to your locations and their customers and ultimately never helps the value of the route. I know a lot of this is vague but selling a charity bulk vending route is not an exact science. Good luck.

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Based on the information provided, and after carefully evaluating everything, I think it would be fair and reasonable to relist this, for approx 15,000.  Thanks for all the input.  Lets see how it works out.  

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In today’s business environment in vending. You’re looking at 6-8 months gross sales for the route value depending on sales, extra parts, records and quality of route etc. at one time you could get 12-18 months sales but that was a long time ago unfortunately. 

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