FedEx Ground offers a unique business opportunity that attracts both first time business owners and experienced investors. With a solid business model and support from one of the largest and most respected companies in the world, owning FedEx routes can be a very wise business decision.
How Much Do FedEx Routes Cost?
There are many factors that affect the value of FedEx routes for sale, but as an industry average, you can expect FedEx P&D and Linehaul listing prices to be in the range of $700,000 to $1,500,000. The minimum investment needed to enter the FedEx space will require at least $250,000 t0 $300,000 as this is the lowest price point you will typically find available on the market. On the other side of the spectrum, you can find FedEx Ground listings as high as $5,000,000 to $7,000,000. A sale in this space will typically be structured as an asset sale, which mainly includes the FedEx Independent Service Provider (ISP) entity owned delivery vehicles and rights to the exclusive FedEx contract.
Profit Margin of FedEx Routes
Currently, average margins we are seeing in the FedEx Ground space are between 14-18%. As an example, if you purchased a set of routes with annual revenue of $1,000,000, you could expect your net income to be somewhere between $140,000 and $180,000. Many factors determine the actual margin of a business and some of these factors are outside of an ISP’s control but margin can also fluctuate based on how an ISP manages expenses and allocates their resources. Types and ages of vehicles in the fleet, number of Business Contacts (BCs) on staff, employee benefits, company events, route optimization, and financing arrangements can all affect margins. Managing your key expenses and resources will help to maximize your profits.
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.