9 replies to this topic

[JoeH]

Hello to all. I retired a few years ago and have been spending my time with family, travel, golf and volunteering. Now I'm ready to try being self employed and the vending business sounds appealing. I've been monitoring this chat site for a few weeks now and have enjoyed reading the questions and answers and thought this might be a good place to get some advice from some of the vending veterans. Without any prior experience it souds like the best approach for me to start out would be to buy an existing route from someone who would be willing to spend a few weeks training and sharing their knowledge. Hopefully this approach might help me avoid some hard knocks. I've run across a private ad for someone selling their route.
Here's a few questions I'm asking myself:
1) how can I be sure the seller actually owns the machines outright?
2) should I have an attorney or business broker handle the transaction?
3) since this is an all cash business how can I determine the asking price is reasonable?
4) if I should take over the route what should steps should I initially take?
Any thoughts you guys might be willing to share would be greatly appreciated.

[RJT]

Hello to all. I retired a few years ago and have been spending my time with family, travel, golf and volunteering. Now I'm ready to try being self employed and the vending business sounds appealing. I've been monitoring this chat site for a few weeks now and have enjoyed reading the questions and answers and thought this might be a good place to get some advice from some of the vending veterans. Without any prior experience it souds like the best approach for me to start out would be to buy an existing route from someone who would be willing to spend a few weeks training and sharing their knowledge. Hopefully this approach might help me avoid some hard knocks. I've run across a private ad for someone selling their route.
Here's a few questions I'm asking myself:
1) how can I be sure the seller actually owns the machines outright?
2) should I have an attourney or business broker handle the transaction?
3) since this is an all cash business how can I determine the asking price is reasonable?
4) if I should take over the route what should steps should I initially take?
Any thoughts you guys might be willing to share would be greatly appreciated.

Post the details of the route without giving any personal information. Give us the details of asking price, number of accounts, number and type of machines, gross revenue, etc....

[JoeH]

Post the details of the route without giving any personal information. Give us the details of asking price, number of accounts, number and type of machines, gross revenue, etc....

[JoeH]

I'll have to get back. Thanks for responding.

[JoeH]

I'll have to get back. Thanks for responding.

[JoeH]

I appears somebody must have purchased the business, it's nolonger listed.
The only details I knew were 4 beverage and 3 snack machines and a sales price of $6,000.

[RJT]

I appears somebody must have purchased the business, it's nolonger listed.
The only details I knew were 4 beverage and 3 snack machines and a sales price of $6,000.

Without knowing all the details it is hard to say but this could have been a decent deal if the machines were in good shape and quality.

Why not just start your own vending company?

[JoeH]

Witout knowing all the details it is hard to say but this could have been a decent deal if the machines were in good shape and quality.

Why not just start your own vending company?

[JoeH]

I wish I could have gotten more info regarding the machines. Guess it wasn't meant to be but I'm in no hurry.
Without any experience in the vending business I feel I can lessen the chance of losing money by buying an existing business that is profitable even though it costs more to start. Perhaps with more than one or two machines the risk can be spread out. A few machines making money will maybe offset a couple of losers...or so I'm thinking.

[RJT]

I wish I could have gotten more info regarding the machines. Guess it wasn't meant to be but I'm in no hurry.
Without any experience in the vending business I feel I can lessen the chance of losing money by buying an existing business that is profitable even though it costs more to start. Perhaps with more than one or two machines the risk can be spread out. A few machines making money will maybe offset a couple of losers...or so I'm thinking.

The problem you are going to run into is finding a "profitable" route at a reasonable price is going to be difficult. While some come up for sale it is generally because it is a fire sale because someone is ready to get out or got into money trouble with suppliers. 95% of the routes I see come up for sale or people ask about on this forum I would not buy.

Some of the reasons are as follows:

They have way to many machines out for the revenue they are bringing in.
The machine are odd ball bad brand machines.
The machines are out dated.
The asking price is WAY to high for what they have.

I could go on but you get the idea.

That is the problem with finding "profitable" routes for sale. Most people do not sell profitable routes. If they do they offer them to existing vending companies that buy them up before they ever go onto the open market. The ones you see for sale have the problems I mentioned or an existing vending company would have bought them. Could one come up for sale? Sure, but not likely..

People think starting a vending company is easy because of all the "get rich" advertisements people see about the vending industry. Vending is a great business and you can make great money you just have to know how to do it. It is no different than any other business like a restaurant, bar, retail, etc some are successful most are not. The ones that are is either done by knowledgeable people or they hired knowledgeable people to guide or run the business. Some do get lucky and pull off a successful business just by digging in there and trying. This would be about 5% of people that make that method work and they usually have deep enough pockets to get through the learning curve.

I just landed one account that will do 35k in revenue a year. This is with only two snack machines and three drink machines. I am big on landing the right accounts and not just taking anything and everything you can get. This account can be worked in about two 1/2 hours per week, tops. Many people are not turning that revenue with 10 or 12 (or more) accounts. IMO time working is what matters, if not you might as well work for “the man” without the headaches.

Lets take this account as an example. Let’s say it takes 3 hours per week to service the account. That’s 156 hours per year. Lets assume after cost of goods, gas, insurances, etc you profit 38%. That leaves $13,300 a year in profit from the $35k gross revenue. That equates to $85.25 per hour you work. Sound good? It does to me.

Will every account you have generate those kind of numbers? No, but I would try and concentrate on the best accounts possible. You can have a mix of accounts from large to small but I treat each one as a separate business. I use Starbucks as an example. Remember when they did that huge amount of expanding and ended up with a bunch of stores that were not profitable. They had to close those stores and rework how they were doing business. A vending company is no different and each account has to make sense and make money or in the end the company as a whole will suffer.

Other factors play apart like ROI or return on investment. How soon can you pay your initial dept off and make profit? It needs to be ASAP and that is done by buying the right equipment at the right cost and placing it in the best accounts possible.

I hope what I have said makes sense……