FedEx Route Brokers
A Unique Type of Broker
To successfully navigate the sales process of a FedExdelivery business, it is highly recommended to partner with a company that has expert industry experience. That is what a good FedEx Route Broker can offer.
A broker that exclusively deals with these transactions will be better equipped to guide a seller successfully versus a general business broker with limited experience. Additionally, a broker that has previous experience in a FedEx contractor role, can add further value as they have direct experience dealing with the industry from the inside and have personally been on both the buyer and seller side of a sale transaction.
Something else to look for in a FedEx route broker is how connected they are with lenders. There are certain financial institutions that focus specifically on lending to FedEx route businesses. Partner with a broker that understands the process and can assist both buyer and seller in securing financing for a deal. This can be a crucial step to ensuring routes sell successfully.
First Steps to Selling Routes
There are many facets to a Fedex route sale that need to be addressed. To start, a marketable value will need to be calculated. This requires an in-depth analysis of the asset values (assigned contract and vehicles) along with a general understanding of the operation. An expert route broker will gather financial statements, settlement sheets, vehicle valuation forms, research local/regional economic conditions, and compare average sales numbers of other routes sold. This will be important data in determining a fair market value for the selling business.
Once a value is determined, a broker will create a marketing package that will be introduced to prospective buyers. A quality route sales presentation will include: key metrics such as gross income, cash flow, vehicle values, and purchase price. It will also include a pointed overview of the operations typically including: Number of routes and vehicles included in the sale, geographic location of the business, what sector the routes operate under (Ground, Home Delivery, Linehaul), if the business is an IC or ISP, degree of overlap the business currently operates across, reasons for sale (retirement, other ventures, etc.) and number of employees including BC’s and AO’s. The listing should also include whether the business has been approved or pre-approved for financing. A broker well versed in route financing will be capable of facilitating this process for the seller. The result should clearly show buyers the maximum loan value available with corresponding interest rate and term.
Buyers of FedEx routes will use this information during a due diligence process. During this process, a qualified FedEx route broker will act as a resource to a potential buyer as questions and additional documentation requests arise. A good broker will understand the expectations a buyer and lender will have when performing due diligence on a seller’s route business. There are times when not all documents requested by a buyer or lender will be available. It’s up to the FedEx route broker to find alternative ways to explain and prove certain key elements to a salesuch as profitability of the business.
How A FedEx Broker Finds Buyers
An experienced business brokerspecializing in route sales, specifically FedEx, will have a database of potential buyers that have shown past interest with previous sales. This database can be accessed quickly to qualify potential interest. Our buyer database is categorized by city, business size, and route type, which allows us to alert local buyers once an opportunity is available. Other marketing methods include: relationships with investment firms and partnerships currently interested in FedExopportunities, focused email and search engine campaigns, premium membership to multiple business listing sites, and educational seminars targeting potential buyer candidates in certain regions. An experienced FedEx route broker will have also built up relationships with industry insiders such as other brokers, truck vendors, and other key contacts. These partners can be a great resource for quality buyers interested in purchasing FedEx routes. There are other prospecting methods that can be determined after understanding the operation in more detail. Most importantly, a high quality broker will keep confidentiality in mind throughout the entire process.
Once buyer responses start to flow in, it should be the broker’s responsibility to qualify the interest. Requiring a signed NDA and submitting financial statements showing necessary liquidity should be a few of the steps a broker should take to qualify a prospective buyer. Our qualified FedEx route brokers will also conduct interviews with potential buyers, asking them questions about their previous experience. Buyers with previous logistics and transportation experience have an advantage when purchasing FedEx routes. This is also a time when a broker can explain the industry and sale process to a buyer new to the FedEx Ground business model. When a buyer is well informed of the industry and sale process, it makes for a much smoother transaction.
Once a buyer feels comfortable moving forward with the sale, a broker will make the introduction between buyer and seller, starting a dialogue between both parties. This is an important step as this is where trust and understanding of the business is built. Our FedEx route brokers will facilitate this process, ensuring positive communication is carried out and clear process timelines are confirmed.
The later stages of the sale process a FedEx route broker will facilitate will include ensuring a purchase agreement is carried out between both parties, guided by their legal representatives and facilitating the FedEx approval process prior to closing the sale.
Peace of Mind
An expert route broker will have the experience, insight, and connections necessary to ensure a successful and prosperous sale. The sale of a FedEx route business can be one of the largest and most important financial transactions of a contractor’s life. An experienced broker specializing in FedEx route sales can net a higher sale price, provide faster turnaround time, and allow a seller to remain focused on their core responsibilities throughout the sale process.