Valuing and Buying an Existing Vending Route
- Author Beth Adams
- Published April 30, 2011
- Word count 379
Vending is a great business, but only people with realistic goals and expectations will survive. Far too many people get into vending thinking it's some sort of get rich quick business, but nothing could be further from the truth. It's a tough competitive business that only the strong will survive in. Well, hopefully you got into with your eyes wide open and will be one of the long term success stories, because this will allow you to benefit from other people's misfortune. Other people's failure can feed out success when we swoop in buy their used vending machines and vending routes.
Buying established routes can be tough for new people, sellers are trying to convince you that there route makes XYZ dollars and they're basing their selling price on that. The seller's equation looks something like: machines value + earnings + locations = selling price. The buyer’s equation is simply based on the machines values. The seller’s equation is simply: machines value = buying price. Flat out - we only offer the value of the machines, so this means about $50-$150 depending on the age, condition and types of machines.
Locations do have a theoretical value, but that's the problem - it's all theory. Not all venders pay taxes on their vending income, so their earnings are just based on what they say they’re earning. How much do you believe a random person you don't know without verification? If the seller can't verify their income, then they're out of luck and I'm here to tell you that 99% of sellers won't be able to provide you with IRS documentation that their route makes a certain income. Most routes being sold will also be neglected and full of underperforming locations and a bunch of bad locations has absolutely no value to the buyer.
Buyers generally have a lot more power than sellers in these situations. Most sellers simply want out, the more desperate the better. Make a crazy low price and sell what happens. The worse that can happen is the seller says no. Sometimes I'll make an offer, wait for it to get refused and then come back a couple weeks later with an even lower offer. After a couple weeks with no buyers, my cash starts to look pretty good.
You can find the authors website here: http://thevendingmachinebusiness.com/
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