Category: Routes for Sale Blog

What Are Routes for Sale?

Independent distribution routes are part of a very niche industry.  There are dozens of different types of routes and hundreds of companies who use the independent operator model to distribute their products.  The most common routes are related to vending machines, bread/snack/food distribution, wholesale delivery routes and FedEx routes.

How do the Routes Work?

The route owner works as a subcontractor or salesperson for either one or several companies.  They are compensated for providing a delivery and sales service for that company.  Typically these routes have a defined territory which the owner has exclusive access to.  If the route was established previously then the owner will have active accounts.  For example, food distribution routes almost always have large grocery accounts that sell their products.  The route owner will make a commission percentage on the products they sell.  Some routes such as vending routes just work off of the profit margin between sales and expenses.

Benefits of Owning a Route

Most route businesses provide a great deal of flexibility and autonomy.  The owner is treated as an independent operator or a subcontractor.  For large companies such as Pepperidge Farm, Snyder’s-Lance or FedEx, you will receive corporate resources and assistance through a district or regional manager.  However, you own your own business and will decide how it operates.  This includes day to day decisions such as scheduling.  There are almost always opportunities to grow the business by adding new accounts or simply growing sales within the current accounts.  Routes for sale are valued based on their sales volume, the territory they are in, any equipment included and several other factors.  This allows the owner to not only impact their current income but also the value and equity of their actual route business.

Route Purchasing Process

The process of buying a route varies depending on the type of route.  Vending, ATM and other routes are typically just sold from one individual to another.  There is no company overseeing these routes so they can easily be transferred between the buyer and seller.  Our service, The Route Exchange, can easily handle these closings and will provide all of the contracts/paperwork required to get the deal done.

Routes that are company based…FedEx, Pepperidge-Farm, Snyder’s-Lance, etc…will have a more thorough application, interview and purchasing process.  The most common scenario will start with a potential buyer meeting the route seller.  A ride along is conducted where the interested party can see the route in person and go through a normal day of operation.  Once the buyer decides to move forward they will be directed to speak with a district or regional manager for the company.  Managers from the company will answer questions, confirm sales figures and offer insight on the business.  They will also start the application process.  If the company offers financing then a credit application will be submitted at this time.  The application and approval process can take several weeks.  If everything is approved then the company will start drafting the purchase documents.  The entire closing process can take anywhere from 4-12 weeks for these larger companies.

If you have any questions about the route industry please feel free to contact us at any time

Day to Day Route Overview

The purpose of this article will be to provide more information on the day to day responsibilities of an independent route owner.  It is important to note that all routes are unique and some of this information may not apply to another route even if it is distributing the same line of products.  Route owners can provide more detailed information on the schedule of deliveries and other tasks for their specific route.  The information below will offer an overview of how a typical day goes on a wholesale distribution route…

3am-6am Start Time

The first responsibility is to pickup the truck and, if necessary, load it with product for the day’s deliveries.  Most bread route owners load their trucks and deliver products the same day.  Snack, cookie and other owners can often load the truck with inventory the day before so that it is already loaded when they arrive in the morning.  It is normal for the route owner to leave their truck at the warehouse facility overnight.  Once you pickup the truck and load your product for the day you drive to your first stop.

Deliveries

Route owners primary responsibilities are to deliver products and stock shelves/displays.  It is important that orders are accurate and fulfill the needs of the store and its customers.  All deliveries should replenish items that are running low and fill any displays.  A good route owner will forecast sales until their next delivery date and make sure that the store has enough of each product to last until that next delivery.  At the same time, delivering too much product can result in increased returns and complaints from the store.  Once the order is determined the route owner unloads the products from their truck and creates a delivery invoice for the store.

The invoice and product are then brought in to the store and checked by a receiving manager.  The “receiver” is in charge of incoming deliveries and will verify your invoice.  Receivers are often in charge of the backroom and establishing a good relationship with them is a huge advantage.  You will rely on them to get checked in quickly and they will often tell you about upcoming promotions or requests from store management.  They will also help you with billing issues if they arise.  Once the order has been checked by the receiver you are free to continue onto the main floor of the store.

The next step is to fill the shelves and displays with your product.  If a new promotion is starting then you may need to change your displays or even build new ones.  Displays are key to growing sales.  Remember that you make more money and increase the value of your route with more sales.  Once you finish stocking your product you can return to the backroom.  Any extra inventory will be kept in the backroom.

Returns/Credits

Returns and credits are a normal part of business for most routes.  Whether a product goes past its expiration date or gets damaged on the shelf, the store will want to be refunded for that item.  Returns and credits should be taken care of immediately.  Creating a return/credit invoice for these items is very easy and usually follows the same process as creating a sales invoice.  You can either complete your returns when you bring in your delivery or after you have finished stocking the shelves.  Both store management and receivers appreciate when these credits are handled quickly and easily.  Depending on the company you may need to bring these return items back to the warehouse.

Store Management

The key to building a successful and lucrative route business is creating a positive relationship with store management.  Store managers can decide how much space you have for your product in each store.  This is a relationship sales based business.  Managers want their stores to be successful and as a route owner you can help them accomplish that.  If they know that you are motivated and reliable they will be much more likely to give you display opportunities.  It is important to note that several route owners/vendors are often competing for a limited amount of space.  If you have a positive relationship with store management then they are much more likely to help you be successful.

On the other hand, a poor relationship with store management will make your job more difficult and stressful.  Not only can they affect your income by limiting your shelf and display space but they can also make simple tasks such as checking in your delivery more difficult than necessary.  Local store managers will also have direct access to your company’s district and regional managers.  The last thing you want as a route owner is to have your district/regional manager calling you with complaints from store managers.

If you see the store manager while you at the store you should greet them and ask how things are going.  It is always a good idea to ask about upcoming promotions, holidays, etc.  This will show them that you are thinking ahead.  Make sure they know that you are trying to increase sales and that you would be interested in any additional sales opportunities in the store.  They will gladly reward the route owners who they know will do a good job with their extra opportunities.

End of Day

After the route owner has finished doing their store visits for the day they can return to the warehouse or wherever they keep their truck.  Some owners will print paperwork which would include a summary of sales and credit invoices for the day.  Depending on the route type they might also refill their truck with any product that they need.  This is a good time to think about what each store will need the next time a delivery is made.

Routes do have flexible schedules but deliveries do need to be made during receiving hours.  Most large grocery stores will have receiving hours sometime between 3am-3pm.  Depending on what time they decide to start and how busy of a day it is, a route owner can expect to be done anywhere from 9am-3pm.