If you are planning to acquire a FedEx route, you should know how the procurement process works and, most importantly, how to properly estimate its value. As unfortunate as it is, many new entrepreneurs are exchanging assets in the secondary market for cash or assets that are not of much value, and this is where real potential pitfalls lie.
As you can guess, it is not so easy to buy a reliable package route. You need to pay attention to all the necessary factors before making a choice. In this article, we have identified some factors to consider before buying a route:
So how to be careful when buying FedEx routes?
Working with independent road specialists:
Before purchasing a FedEx route (s), it is crucial that you consult an impartial specialist in the field for the following reasons:
- Double representation
- Unregulated industry ̵1; no consumer protection authorities
- FedEx is not responsible
The first reason; Dual representation means that when you buy from the broker who sells the route yourself and supports you to buy their routes over others. Keep in mind that double representation is illegal in real estate and other industries, but since the industry for sale is unregulated, brokers will avoid doing this.
In addition, FedEx does not jump in to protect companies when they sell less profitable or incredibly challenging routes disguised as gold nuggets by the sales path industry. Because the broker has more to gain, usually $ 100,000 in commission per route sold, they can tell you anything just to get you to buy from them. Therefore, you need an independent specialist, a third party, to help you make the right decision.
2. How reputable is the broker?
It is not a given that the broker is well known in the community, but the best way to find out their reputation is by contacting their previous clients and finding out how their routes that they bought from this broker are doing. In addition to this, keep in mind the following:
- Do they have any broker licenses? Arizona, Colorado, California, Idaho, Georgia, Illinois, Florida, Nebraska, Minnesota, South Dakota, Wisconsin, Rhode Island, Wyoming and Nevada require brokers to have licenses.
- Do they own routes for sale?
- Have they been sued? If so, when and how many times?
- Do they offer buyer advice? If so, how should they avoid conflicts between the buyer and the seller?
- Do they have brokerage insurance?
A broker who has been around for several years, has a good reputation and meets the above criteria would be the best choice.
3. Do the numbers match?
Work with qualified accountants with experience in the sales route to review the figures and ensure that you will be profitable if the route continues to function as it has in recent years.
Over to you:
Do not forget to ride with the drivers and managers of the route while doing your due diligence, as shady brokers will not let you do this, which, if they do, will consider it a red flag.
Once you have purchased the route, make sure you get FedEx package delivery insurance to protect your route operations from the dangers that come with this industry.