Buying a scalable business is important but how do you pick the right commercial route?
When friends and family come to me for advice on what the best businesses to invest in right now I tell them to simply buy a route for sale, and their replies are all the same… why do I want to invest in a business that I have to work in and here’s how I break it down to them…
1. Routes can be owner-absentee businesses
2. Routes can be an additional income on top of your annual income
3. Routes are a recession-proof business
4. Routes can grow as you want, the more customers you get the more profit you make
Then they start to get more interested and say “What are the best routes to buy” and I reply with…
1. What are you passionate about?
2. What industries have you worked in before?
3. Do you want to provide a service, make deliveries or distribute?
4. How many days do you want to work?
5. How much money do you have to invest in a business?
When it comes down to picking the best route, it all depends on what niche you want to choose, Here’s an example… You worked in sales for a shipping company, you were getting customers to use the company you worked for to ship packages and products from you, and you made a good amount of commission… so your best practice should be a delivery business, so what is a good business to invest in?
1. FedEx round routes
2. Amazon routes
3. Ontrac routes
Some will wonder which routes are scalable because they don’t want to invest in a business with a large overhead, which I understand. The good thing about buying a route is they are easy to operate.
How do Routes Work?
Before choosing any route, you must know how these routes work or specifically how does your selected business model even work?
The owner of the route is an independent operator and has access to a designated area. He is responsible for all the functioning and sales inside of that territory. Sales depend upon the owner's hard work, as the owner can add new accounts or improve the performance of the existing accounts.
Different strategies such as promotional activities, good customer relations, and actively selling the items can add sales volume to the route. Customer research is very important in this matter. Suppose you don’t know your targeted audience; then how would you expect to reach them? Moreover, customer research will help you in the selection of your desired route business.
You also must know how much time you can spend on your route or how much time is required by your decided route for proper functioning. Most route businesses have flexible schedules. The owner just has to service the accounts when they open and accept deliveries. Route owners get a pre-decided commission, you must stay competitive and understand how to charge, overcharge will lose you a customer, and undercharging will hurt you in the long run on their deliveries of products or sales. So the selection of the desired route business model is a bit tricky. It is necessary to keep in mind the points mentioned above to make an easy choice of route business. Moreover, you can look into your nearest locality; if anybody is doing route business, you can seek guidance from them
Best routes that don’t require employees
When it comes to owning a business the number one expense can be hiring, as much as you want to grow and become able to hire friends and family and any employee in general it does take a weekly payroll and your business may not be able to afford it in the very beginning but I have some good news for you, here are 3 commercial routes that don't require employees…
Buying Potato chips routes
A potato chips route provides business such as grocery stores, deli’s and supermarkets potato chips, these can be chips like Doritos, UTZ and wise there's many more but you get my point, the job is simple, the boxes are light and can be lifted 3-4 cases at a time, they may tumble on sometimes but don't worry they are not fragile, here is the break down of what it is like owning a potato chips route…
1. Providing customers with a shelf rack
2. Fill up your truck with enough inventory to have enough cases of potato chips for your daily route
3. Start your route, once a customer checks for any bad, expired, or opened chips from the chip rack and replace them as these are considered credits.
4. Fill up customers' rack
5. Get paid COD (cash on delivery)
Buying ATM routes for sale
ATMs are in almost every business, you can find them in gas stations, local businesses, car washes, and even malls, these machines come in handy for those looking to get access to quick cash, owning an ATM route is a great business that can earn you a passive income, The best part of owning this business is you can hire an armored company to manage your machines for you, they take a percentage but it doesn't require you to hire or even work if you don't want too, but if you want to maximize your profit and you do decide to run your ATMs then here's what it takes…
1. Installing the machines to the floor ( recommended to hire a professional for this)
2. Monitoring machines using software to detect when machines are running low on cash
3. Filling up machines with cash
4. Sending your customers rebate for transactions ( this can be done once a month)
Buying Bread route delivery for sale
From sandwich spots to supermarkets, they all rely on bread companies to deliver them fresh bread almost every morning, fresh bread equals happy customers. Customers want a fresh roll for their breakfast sandwiches in the morning, bread routes can be operated as an owner-operator business, the bread in the boxes doesn’t weigh that much, and customers that close their business early can give you a spare key to grant you access to the business anytime so you can unload the bread, here’s is what you need to do…
1. Start your day by taking customers' orders, this can be done over the phone.
2. Once all your orders are gathered for the day you can then forward this to the bread bakery.
3. Head to the bakery and load up your box truck or cargo van.
4. Deliver the bread to your customers, this can be set up using route software.
5. Manage your billing, for example, how much each customer ordered for that week.
6. Save one day a week most likely Sunday will be the best, collect your money from each business, and repeat the next week.
Which routes are scalable?
Choosing a route is the most important part of the purchase process. You can't choose a route abruptly. Here are some tips which you should keep in mind while choosing a route business. First of all, you must know that there are hundreds of thousands of different types of route businesses and what type of work each one provides is different from the other so that will be something you have to determine, for example, do you want a beverage distribution or a wholesale food distribution business? There are wide assortments of routes, and these all routes are different from each other all comes down to the business industry you choose, if you choose a potato chips route, then the process is very simple and it’s very scalable, and here’s why…
Example # 1 Buying a potato chip route
A potato chips route is considered a simple and scalable route. You fill up the truck with your inventory, so say your inventory inside your truck is about $4000 worth of chips, you go about your daily, route, and b,y the end of your shift you have sold your cases of chips you now should have $4000 plus the profit margins, you minus your fuel charge and the rest is your profit for the day, another benefit of owning a potato chips route is it can be owner operated, it does not require help.
Example # 2 Buying a beverage distribution route
A beverage distribution route can have a little more overhead and require more of your time, Here’s how… One reason delivering beverages to customers may require a helper because of the weight they hold and in the summer time you may even need to hire 2 helpers with you, second, you may need to take orders a day before then deliver the beverages to customers, this is also scalable if you are willing to work as a driver.
So these are a couple of examples you should take before trying to choose the best route to buy but Before choosing any route, you must know how each of these routes works or specifically how your selected route operates to turn it into a successful business.
Different strategies such as promotional activities, good customer relations, and actively selling the items can add sales volume to the route. Customer research is very important in this matter. Suppose you don’t know your targeted audience; then how would you expect to reach them? Moreover, customer research will help you in the selection of your desired route business.
Most route businesses have flexible schedules. The owner just has to service the accounts when they open and accept deliveries. Most Route owners get made COD on their deliveries of products or sales.
So selection of the desired route business model is a bit tricky. It is necessary to keep in mind the points mentioned above to make an easy choice of route business. Moreover, you can look into your nearest locality; if anybody is doing route business, you can seek guidance from him. Here are some points to look at when choosing the best route to buy…
Buying Territorial protection for sale
When buying a commercial from a big brand like a Dietz and Watson route or even a Tropicana route for sale, typically no one can sell within a certain area from you or go into your stops, that’s a plus but these types of routeS may cost a bit more.
Buying Independent routes for sale
When buying an independent route, these can also be cash cows, they make good net income but how do you determine how loyal are the customers and not have to deal with cheap clients, Here is what you need to look at…
1. How long have the customers been with them?
2. How much is the average order?
3. How Products are you selling? ( At times a customer can order a big order but after the order is paid your profit might just be 1% so it’s important to check profits on items sold to customers.
Buying Service routes for sale
When it comes to buying a service-based business this can be tricky I mean what are you buying right? I get that question a lot, but if you dig deeper you may just be buying a hidden gold mine, and here’s how to find out…
1. Does the business operate under a brand?
2. Is the brand trademarked?
3. Does a business use a business number? And if yes you can search all calls and how frequent customers are calling.
4. Does the business have a website? And how long has it been online?
5. Does the business has a google map listing? What are the reviews like?
If all these come up good then buying a service-based business is considered a good business to invest in right now.
Buying Delivery based businesses for sale
Buying a delivery-based business like FedEx routes usually work on the principle of franchising so FedEx routes are easy to expand and earn profits. On the other hand, Say you want to deliver bread, Bread routes are way different from FedEx. All Major grocery stores and supermarkets usually buy their bread from a bread delivery person, bread route owners provide them with a shelf and can either fill it up daily while removing the old and placing the fresh bread or they can also call the customer a day before and take the order from them.
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How many Types of Routes are there?
Bread routes, pastry routes, grocery routes, meat routes, and vending machine routes also we can't forget FedEx routes are common examples. So, it is up to you which route business you go. Every route business has its pros and cons. Some routes are owned by reputable companies while others are independent distributors. Nowadays, people know that an established customer base can lead to instant cash flow as they don’t have to work from scratch. Buying an existing route business for sale from a well-reputed company with a good track record and a good amount of customers is a great way to get an instant start. Furthermore, whether you decide to go with a branded company or just an independently owned route you will get access to the wholesales, distribution centers, and contact numbers, so you can just continue the workflow so customers don't get impacted by the transfer ownership.
While protected routes are from household names such as FedEx, Pepsi, Pepperidge Farm Cookie, etc., independent routes are more competitive too, and you have put effort into making accounts.
If you want to work with well-known brands and companies such as FedEx, then you are an entrepreneur but also a brand representative at the same time. These reputed brands have specific standards even for routes, too, so you have to maintain these standards. These standards include hiring employees, the addition of stops, uniforms, etc.
When it comes to picking the best route to buy, you should consider all of the above and more, it all comes down to what you are passionate about, how much time you have to offer, and how much money you want to invest, some routes require only 3 days of work while others may require 7 days, some routes may allow you to be an owner absentee business while others require your full attention when it comes to buying a commercial route don’t just consider the profit, but look at it as a long term investment.
Disclaimer: The information provided in this article is for general informational purposes only and should not be considered legal advice. The laws and regulations regarding business licenses may vary from state to state and are subject to change. It is important to contact your local state office to determine which licenses are required for any specific businesses. Additionally, please note that this article contains affiliate links and we may earn a commission from our affiliate partners or Amazon links. If you are considering starting a business, it is recommended that you seek the advice of a qualified lawyer, business broker, or professional in your area. The information provided in this article is not a substitute for professional advice and should not be relied upon as such.
