Why Sell FedEx Routes in the Current Economy?

Category: Best Practices

When the pandemic hit in early 2020, and during the months that followed, workers in nearly every industry felt the crunch. Many companies had to make difficult choices in order to stay in business, including cutting their hours and furloughing or laying off staff members, while others were forced to close their doors altogether. The result was a spike in the national unemployment rate from which we are still recovering today.

In recent months, with COVID-19 vaccination numbers rising and many employers asking their workers to return to the office for a standard nine-to-five work week, many individuals are discovering that the daily grind is no longer for them. Instead, they are pursuing career changes and new opportunities—including starting their own business—which is why now may be an ideal time to sell FedEx routes.

Are you looking to sell your FedEx P&D or linehaul routes?

Not only is selling your FedEx routes a significant financial decision that requires a lot of planning and consideration, but it will also take time to complete the complex FedEx sales process—usually anywhere from three months to six months. For this reason, seasonal timing is everything.

As a contractor, you know that the busiest time for FedEx deliveries is during the winter holiday months (October through December). Not surprisingly, FedEx is wary of bringing in new contractors during this time because the demands of peak season can be overwhelming. However, once January begins, FedEx resumes accepting route transfers, and since it is still early May you have plenty of time to contact a broker to get the ball rolling.

Make sure you have your financial paperwork in order. 

Your discretionary profits over the past 12 months will largely determine your business valuation as well as your offers from potential buyers. Not only will properly preparing your financials ahead of the sale ensure that you are familiar with the financial performance of your route business, but it may also help to shed light on any problem areas that need to be addressed during a due diligence period.

According to our seller due diligence list, financial items frequently requested by buyers include:

  • Bank statements for the previous year and any YTD activity
  • 3 years of corporate tax returns
  • 3 years of profit and loss statements
  • Current YTD profit and loss statement
  • Current balance sheet
  • Asset list
  • Payroll reports
  • Review of all applicable insurance policies (vehicles, health care, etc.)
  • Copies of any leases and loans, including stockholder loans and notes payable
  • Copies of all vehicle maintenance reports
  • Last 12 months of FedEx settlement statements

If you are unsure about how to prepare any of the items listed above, contact the professionals at KR Capital for guidance. Our firm can work with your financial, accounting, and legal advisors to prepare the required paperwork.

Take the time to evaluate your profits. 

As you go through your financial records, carefully assess your expenses and resulting profits. As the route seller, you will need to demonstrate how profitable your business is and where your spending occurs. This includes discretionary expenses such as personal fuel and travel costs as well as non-recurring expenses that a buyer will not absorb when taking over the business.

Sell your FedEx routes today with KR Capital.

If you are ready to take advantage of the current economy and sell your FedEx routes, KR Capital can help you navigate the transfer process and ensure a smooth and efficient transaction. We have worked with hundreds of FedEx contractors nationwide to successfully value, market, and sell their routes for a premium price, and we look forward to adding you to our list of satisfied clients. Complete our Seller Information Form to get started immediately.