- September 7, 2018
- Posted by: Chris Holzgraf
- Category: Buyers and Sellers Hub
For a business to sell quickly and successfully, there is one key component that needs to be present – an accurate price. It is a common mistake of sellers and their brokers to set an unrealistic asking price for FedEx route businesses.
The Market Determines the Price
Something we regularly tell our clients is that the market determines a price, not us. If your routes are overpriced, you will know very quickly by the lack of interest from potential buyers. We receive calls from frustrated contractors upset that their routes have sat on the market for months without any offers. We also hear from sellers that have taken substantial losses on past sales and are certain they had priced their routes too low.
Professional Route Valuation
A professional route broker will have insight into what determines an accurate market value for FedEx route operations. Using a combination of financial analysis, local/regional comps and current industry knowledge, an accurate list price can be achieved. A competitive sale price can give you the leverage to reach a successful agreement with a buyer.
Factors That Determine Your Asking Price
Aside from the metrics listed above, there are other factors involved that can help set a route business list price. The geographic location of the routes, number of vehicles included in the sale, and years of operation can all affect price. Two current changes to the FedEx business model are also creating price variance between route listings: ISP and overlap transition. Entities that have gone through the ISP transition process and/or have overlapped Home Delivery and Ground routes can typically expect higher sale prices overall. If your business has not gone through these changes, it is recommended to have a plan in place that can clearly be communicated to a buyer.
If you are interested in selling your business and would like a free route valuation, get in touch with us. We can also assist in your transition to the ISP model and facilitate the route overlap process.