First time Poster/Buyer, Looking for some Guidance

Discussion in 'FedEx Discussions' started by HopefulBuyer, Jun 22, 2015.

  1. HopefulBuyer

    HopefulBuyer New Member

    I was recently given an offer to buy 2 local FedEx routes, 1 Ground, 1 HD. The current owner/driver makes it sound like a money making machine, but there has to be a reason he is selling. He claims he is too old and just ready to be done. I have tried to do my own research, but I just don't know what I need to look for. Here are some of the questions I have thought of that I need answers to.
    Is there a way to find out the volume of said routes?
    It is my understanding that FedEx pays per stop/pickup, if that is true how much, or how do I find that number?
    How do I find out if it is IC or IPS?
    The Current owner gave me his selling price which is negotiable, but I want to know how I can get a fair market value of the routes?

    What other questions do I need answers to before even considering purchasing these routes?

    Any help would be appreciated.
     
  2. It will be fine

    It will be fine Well-Known Member

    The seller should have answers to all those questions.
    2 routes is too small to buy, you'll be under minimum scale. I believe even in IC the minimum is 3 routes, so FedEx might not even allow the purchase. Unless you have the cash to buy more and someone else in his terminal is selling stay away.
    Bizbuysell has a bunch of listings for Ground businesses for sale to gauge the market, but it depends a lot on location and local labor market to determine value.
     
  3. STFXG

    STFXG Well-Known Member

    If you're only buying two routes then be ready to either buy 3 more or sell for a big loss. Stay away. You'll be taking a bigger risk than it's worth at this point. If you want in the buy out someone that already has at least 5 routes.
     
  4. FedEx GT

    FedEx GT Active Member

    If they are sellin two routes it is not ISP, at least yet. You can buy as many as you want as long as the selling contractor sells 3 and keeps at least 3 or if they are smaller they can sell all their PSAs to a different individual (which it sounds like is happening with the 1/1) I would tell you to go forward only if you have the means to buy additional routes if it gets required in the future. I am in a non ISP state and don't think it will be coming very soon to mine so in that situation I would feel comfortable with a smaller entity buying here but it just matters where you are. Always keep in mind that you may go ISP at any point so there is risk in that situation. Last that I knew of the parameters are 3 PSAs to be safe but I have heard rumors that may be going to 5, as far as I know that is still just rumor.
    The profitability on two routes will not be stellar unless you are running skeleton crew and you are doing mostly all the work. It is also going to depend largely on the age, mileage, condition, loans, and maintenance on the trucks that you would be buying to determine it.
    I am fairly certain that the price per stop and price per package is confidential so I don't think you will be getting that info here.
     
  5. STFXG

    STFXG Well-Known Member

    They are really pushing everyone at my building to get to scale before next year. The most recent transitions have been 5 psa's or 500 stops daily to make scale.
     
  6. FedEx GT

    FedEx GT Active Member

    Crazy, their would be 4 of us to scale in my terminal based on PSAs and it isn't a small one. Probably another, 3 up to scale on stop count. I wonder how that applies to contractors with multiple bulk trucks obviously the stops won't be there but the package count can be enormous
     
  7. It will be fine

    It will be fine Well-Known Member

    They make case by case exceptions for straight truck owners. Bulk is worthless in ISP. Actually worse than worthless it ends up costing money to service bulk stops.
     
  8. Cactus

    Cactus Just telling it like it is

    Invest your money in a real business instead of this contractor crap sham.
     
  9. bbsam

    bbsam Moderator Staff Member

    What REAL BUSINESS are you investing in?
     
  10. FedEx GT

    FedEx GT Active Member

    Express stock?
     
  11. Cactus

    Cactus Just telling it like it is

    Doesn't matter and besides that's confusing the issue. Besides, you are far from independent with a Ground route. Just trying to help out the OP if it's OK with you.
     
  12. bbsam

    bbsam Moderator Staff Member

    It's very much the issue. What REAL BUSINESSES are investin in and in what ways are you more independent than me?
     
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  13. Cactus

    Cactus Just telling it like it is

    I'll be retiring soon. How about you? As far as investing in a real business? As far as I'm concerned I wouldn't touch Ground as a last resort. Otherwise it's none of your business.
     
  14. bbsam

    bbsam Moderator Staff Member

    You could say I'm semi-retired as we speak.

    I doubt highly that you are in business at all. If you were, you'd realize how "independence" is a relative term at best.
     
  15. Cactus

    Cactus Just telling it like it is

    :blahblah:
     
  16. Code 82 Approved

    Code 82 Approved Titanium Plus+ Level Member

    Are you looking at buying 2 trucks worth $100k and 2 routes worth $200k? More info!
     
  17. I Am Jacks Damaged Box

    I Am Jacks Damaged Box Well-Known Member


    Obviously rural is obvious. HD route is a loser, just think of it as a write off.

    The Ground route will be your money maker. Ask to see statements and financials then proceed accordingly.

    Yes, it really is that simple. There are no geniuses in this industry, of that I assure you.