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jkhogan21
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seller wants 129k. grosses 4600 a week. takes home 1575. Gross profit of 56% which i think is high. 50 locations with 125 machines half are coke owned. I don’t think it’s a good deal, what you guys think. Some of the locations have to be duds. Let me no what you guys think. 

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The numbers aren't horrible on the surface. If his numbers are true it grosses 239K/yr which means the price is 54% of gross - not bad.  Pricing by equipment cost comes to 2000 per machine - can't count leased machines. Sales avg is 36 per week per machine, 91 per week per location.  You need to know the vend prices, commissions, does it include a truck, dollies, counting equipment, etc. You need the ages of the owned machines and what model numbers, all validated, any card readers? If you see the machines are they clean, lit up and have proper flavor and price labels. Any location contracts? Can you assume the Coke leases? - call Coke and ask yourself. You will need to see the business tax returns for the last 2-3 years.

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As long as the prices add up right then this could be totally legitimate and in the range of being fair priced.  I'm not saying it's all 100% true, I am just saying the numbers don't look fishy but it all depends on the pricing.  If you see pastries for $1.00, LSS for 75 cents, and things of that nature... that would be a red flag for me because I don't see how you could net that much money after COGS.  Pastries should be $1.10-$1.25, candy $1.10-$1.25, LSS 90 cents to $1.00.  Small chips 60 - 70 cents.  Cans 75 cents to $1.00 (depending on your region) and bottles at least $1.60 for 20 oz and $1.10+ for 16.9 oz (I don't sell 16.9 oz).  This does not account for commissions or unusually high sales taxes.  Here, sales tax is about 7.5% for sugary beverages.

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doing some guessing on numbers here is what I get:

weekly collect                          4,600

cost of goods (60%)                2,760 (remember he is paying bottler prices for drinks)

sales tax (est 6%)                      276

WEEKLY commissions              560  (his number)

leaving  $ 1,004 a week to cover overhead and realize a profit for your time and investment.  Even before you take out fuel, insurance, repairs, etc, you have nowhere near what he claims to take home.  Granted my numbers are guesses.  I like his gross but he has too many machines to juggle to get to that number and a lot of missing info here to make an informed decision....

 

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