Selling FedEx Ground Routes

To help prepare your routes for sale, it is important to know the questions that will come up during the sale process. The following are common questions we receive from potential buyers and investors.

 

1.) Are FedEx Ground routes a good investment?

A ground business can be a very lucrative investment. Some of the major benefits to ownership include:

  • Revenue generated from day one without investing $1 into marketing or advertising
  • Flexibility to run your business as you choose. If you want to drive a route, you can. If you want to place a manager to run daily operations and run the business absentee, you have that freedom.
  • Your operation grows with FedEx. As the FedEx ground sector continues to see strong growth year over year, the value of your routes will increase as well.

2.) Do I need previous experience to be a successful ground route owner?

We see buyers from a variety of backgrounds, surprisingly only a small number have FedEx route ownership experience.  With good due diligence and guidance from an experienced broker, a buyer can gain a good understanding of the FedEx ground routes for sale in a relatively short period of time. Including seller training is also very helpful in starting the buyer off on the right foot.

3.) What does “overlap” mean?

Simply, route overlapping is FedEx’s plan to condense contracted service areas (CSA) within the Ground and Home Delivery sectors. So, if you own Ground routes in a certain territory, you will need to merge with the corresponding Home Delivery contractor in the same territory. An overlapped business will service all commercial and residential customers in a CSA.

4.) What are the benefits of “overlapping” service areas?

Stop density is the key benefit to overlapping service areas. It is a more efficient business model that can improve productivity, cut down on the number of drivers needed to service an area, and reduce wear and tear on vehicles. This can translate to higher margins and stronger contract negotiations. Selling overlapped ground routes also have the potential to yield a higher sale price.

5.) How does FedEx pay contractors?

FedEx Ground business owners are paid weekly. Compensation is reported on weekly FedEx provided settlement statements that break down revenue per route and include bonuses and incentives.

6.) How long does it take to buy/sell a FedEx route business?

The timeline of selling a FedEx ground route business depends on multiple factors but the average sale process typically takes anywhere from 4 to 8 months. A good broker can decrease this timeline by facilitating controllable factors related to the deal.

7.) Does FedEx need to approve a buyer?

Yes, FedEx will require certain documentation from a new buyer prior to taking over for an existing contractor. We can help walk you and your buyer through the process. The key is to come prepared with the required items when the time comes for FedEx to approve your sale and transfer of the contract.

8.) Is there typically a training period?

When selling FedEx ground routes, it is always a good idea to offer a reasonable training period to your new buyer. This will create a better transition for everyone including you and your existing staff.

 

These are just a few of the many inquiries we receive on a daily basis from individuals looking for more information on the FedEx Ground industry. Let Premier Route Consulting be your partner in educating potential buyers, creating a trusting environment for all parties involved.

 

Contact Us to find out how we help you sell your FedEx Ground routes