- November 30, 2018
- Posted by: Chris Holzgraf
- Category: Buyers and Sellers Hub
FedEx Ground offers a unique business model that attracts both first time business owners and experienced investors alike. With a solid business model and support from one of the largest companies in the world, owning FedEx routes can be a very wise business decision.
How Much Do FedEx Routes Cost?
You can use the national average range of $90,000 to $110,000 to calculate the typical cost per FedEx Ground route. This will normally include all assets of the business, namely the entity’s delivery vehicles and exclusive FedEx contract. With ISP minimum scale rules in place in most terminals throughout the country, you can expect a typical set of FedEx routes for sale to be in the price range of $700,000 to $1,000,000.
Profit Margin of FedEx Routes
Again, you can use the US average to estimate a FedEx route business profit margin. Currently, average margins we see are between 25%-30%. As an example, if you purchased a set of routes for $1,000,000, you could expect your net return to be somewhere between $250,000 and $300,000. Of course the actual numbers depend on how an owner decides to run their operation. Owner salary, employee benefits, company events, and financing arrangements will determine the true profit margin.
Access to Financial Data
One benefit of working with a route consulting firm that specializes in the sale of FedEx route businesses is access to financial and operational documents and information. To truly understand the value of a business, you need accurate and comprehensive documents to help you determine your purchase decision. At Premier Route Consulting, we work with our clients to create a package of information that will give potential buyers an opportunity to perform thorough due diligence. By doing this we create buyer confidence, which is paramount to a successful FedEx route business sale.
Contact us to learn more about the financial opportunities of owning a FedEx route business.