There is a lot of misinformation being circulated about the vending business. This leads some people into believing that vending is get rich quick scheme or an easy way to start their own business. The end result of all this misinformation is that a lot of people get into vending with big dreams and end up bailing out of the business. Although this is bad for them, it’s good for us because it allows us to grow our business by buying up their used vending machines and small routes; excellent values exist if you shop around.
When you’re new to the business, the main problem about buying an already existing route is knowing exactly how much to pay. In my experience, sellers always want too much, this is to be expected is just part of the game. In this game, we have the money so we control the game. As a buyer, the only thing we place a value on is the machines; we give no consideration to the value of the locations. Typically used vending machines can be purchased for $50-$150.
It’s not that the locations don’t have any actual value; it’s just that it is subject so we don’t include it in our equation. Now, of course the seller isn’t going to go along with our math, but it gives us a place to start our negotiation. Does the seller have IRS documentation proving income? I doubt it. The locations of this route may be very lucrative or you may to need replace every single machine due to under performance. I would say it’s a safe bet that if the seller is leaving the business, the route probably hasn’t been maintained. It’s probably full of under performing locations.
We’re looking for desperate sellers, trust me when I say if you take your time and shop around you will find excellent deals. Buying existing routes is a perfect to expand quickly but only if you don’t over pay.
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