JEREMYTINA Posted April 13, 2011 Share Posted April 13, 2011 www.gumballmachines.com, their 4000 bulk rack route, an e-commerce medical site, and a bunch of domains all for sale for the bargain price of $1.5M. My link Link to comment Share on other sites More sharing options...
havending Posted April 13, 2011 Share Posted April 13, 2011 The cash flow seems low for the amount of equiptment. I would guess that the over head is out of control Link to comment Share on other sites More sharing options...
Profits Posted April 13, 2011 Share Posted April 13, 2011 Doesn't seem like a really compelling offer, to be honest. Link to comment Share on other sites More sharing options...
JEREMYTINA Posted April 14, 2011 Author Share Posted April 14, 2011 Doesn't seem like a really compelling offer, to be honest. Here is the P&L. http://50.com/gum.htm Their commission is right at 1/3 of gross. The plush and product purchases seems low. Gross Sales 3-01-2010 ---03-31-2011 $1,429,000.00 13 mths Expenses Concord Confections & Plush Suppliers Food Purchases -208,842.08 Electric & Gas Utilities -2100.00 Been at the same location for 15 years Rent -24000.00 3 years left on the payments Truck Payments Ford -20,743.67 Maintenance on trucks Repairs Trucks -5271.00 Driver toll expenses Tolls -987.00 State farm is the carrier Insurance for trucks -15,675.93 Fuel for the trucks for servicing Fuel -56,819.46 Payments to the stores Commission Stores -454,039.11 Payments to the contractors to collect the revenue. Commission Payroll -178,022.00 Payroll VT Driver -35,000.00 Workers Comp Ins -3820.00 (When drivers sleep overnight) Hotel -723.61 Licenses -7397.25 Warehouses Satellite Office Exp -12357.00 Drivers all have cell phones Telephone Cell phones & Office -6237.22 Taxes CBT -780.00 For the PHY advertising Google Advertising -38,000.00 Lease to run the 2 websites 200 per month Server -2400.00 800 Number Phone Bill -900.00 .0275% fee for processing the credit card for the PHY site Credit Card Charge Fees -5775.00 Live Person Fee -1068.00 12 Month Net $-1,080,955.00 13 mth $321,230.76 Net for 12 months This Net income is the current income for the last 12 months- There is additional revenue that will be coming in from the additional 1000 machines that are being placed and the new start up of www.gumballmachines.com that will be launched by May 30. 2011 Link to comment Share on other sites More sharing options...
mission vending Posted April 14, 2011 Share Posted April 14, 2011 I guess I will go to bank in morning. Too late buddy, I just wired the cash. Gonna flip it now, I'll give you a deal at 1.6M LOL Link to comment Share on other sites More sharing options...
JEREMYTINA Posted April 14, 2011 Author Share Posted April 14, 2011 I guess I will go to bank in morning. Wish I knew how they were placing those 1000 machines so fast. lol. 4 of the route guys are paid commission, so maybe they have to locate too? Link to comment Share on other sites More sharing options...
BorderJerry Posted April 14, 2011 Share Posted April 14, 2011 Are you sure it's not "over 1 million pesos worth of equipment" Link to comment Share on other sites More sharing options...
Jax Snacks Posted April 14, 2011 Share Posted April 14, 2011 I guess I will go to bank in morning. I would love to see the look on your wife's face when you break that news! Link to comment Share on other sites More sharing options...
mainor5251 Posted April 14, 2011 Share Posted April 14, 2011 Would be something similar to this....... My wife gets nervous when I spend a couple hundred, needless to I've kept her very nervous over the last 2 months Link to comment Share on other sites More sharing options...
Jax Snacks Posted April 14, 2011 Share Posted April 14, 2011 I guess bigger is not necessarily better. Those expenses are ridiculous! What about any debt? Are they deep in debt or had their LOC cut off? Maybe they are looking for a chump to pay down their debt or provide a much needed cash infusion. Otherwise, sounds like reorganization (bankruptcy protection) may happen with the May re-launch. Does not look very sustainable. Link to comment Share on other sites More sharing options...
will.vend Posted April 14, 2011 Share Posted April 14, 2011 one problem I saw is they are paying roughly 44% commission to the stores and drivers combined, and Im sure the drivers take a little off the top, that probably puts them at 50% commission or more, factor in all the other expenses and they are in the red always. it's almost impossible to police the drivers and Im sure it was part of their problems. Link to comment Share on other sites More sharing options...
Profits Posted April 15, 2011 Share Posted April 15, 2011 it's almost impossible to police the drivers and Im sure it was part of their problems. Louisville Slugger specializes in custom solutions for that exact problem. I guess bigger is not necessarily better. Those expenses are ridiculous! What about any debt? Are they deep in debt or had their LOC cut off? Maybe they are looking for a chump to pay down their debt or provide a much needed cash infusion. Otherwise, sounds like reorganization (bankruptcy protection) may happen with the May re-launch. Does not look very sustainable. Their cash flow seems right in line with many other types of businesses. The thing that concerns me in particular would be that I'd expect their profitability to be higher for this particular type of business. I think they've simply got too much overhead. They need to trim some fat. I'd let go of half those employees and run that sh@t myself. Link to comment Share on other sites More sharing options...
will.vend Posted April 15, 2011 Share Posted April 15, 2011 Louisville Slugger specializes in custom solutions for that exact problem. they cant afford to buy a Louisville slugger...Im sure if you peeled back all the layers of the "big guys" you would find the same problems, these companies suffer from the left hand doesnt know what the right hand is doing ailment.years ago I worked for the largest home healthcare company in the world, when I started they were just a regional company and then they went on a buying frenzy, they felt bigger is better, they got so diluted nothing ever got accomplished. the ole left/right hand thing! in one of our many manager meetings it was announced we would be paid commissions on "projected revenue" soon after my bonus checks came rolling in and soon after that my severance package was being processed. they spent all their borrowed money and had to downsize, they went bankrupt less than a year after that. so it's the same scenario these giant companies self destruct. imo once you start having employees run the day to day operations you are taking a long walk on a short bridge. so dont feel defeated when you share locations with these guys they are a self correcting problem! Link to comment Share on other sites More sharing options...
nepavend Posted April 15, 2011 Share Posted April 15, 2011 Richland Industries is a company run by a well-known bulk vendor, Richard Gabriel and his son, Richard "RJ" Gabriel Jr. I had the opportunity to see their office and meet with Richard and RJ on two occasions. My old partner was Richard's biggest and best locator back in the glory days of bulk vending in the late 80s/early 90s where he (Richard) had 50,000 location all over the country and was second only to Folz in vending locations and revenue as well as market presence by 1996. Essentially they would bring him and other guys in and pay them flat fees per location and they would load their cars and put out Gabriel charity vending machines literally almost anywhere and go home or party or whatever. However, as you all suspect with large route with drivers and such, commissions, fees and driver "bonuses from the cookie jar" eventually added up and it imploded, and what ended up happening was the company was sold in pieces to the managers and drivers. It seems like this is what is happening again. Now, he is into cranes, large racks, and e-commerce as well as bulk routes. I find it funny he is still saying the revenue is growing daily. Why would he continue paying out for new locations if he is selling? No way he is putting the effort in. The financials seem way out of whack in terms of costs but maybe I missed something. They may be different than what you would expect because of the e-commerce and amusement portions of the business. I find this truly fascinating but also remember that the last time Gabriel sold out like this the buyer ended up not very happy and went under itself within a couple years, and Gabriel bought it back at a fraction of what he had sold it for, as I was told. I hope that this isn't another setup for a similar type of result for a would-be buyer. Link to comment Share on other sites More sharing options...
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