Quick Tips to Sell FedEx Routes Fast

Category: Best Practices

Being a FedEx contractor is not for everyone. While the recent eCommerce boom has no doubt added to the attraction of owning routes and running a lucrative business, it still requires a lot of hard work, dedication, and diligence to operate a successful FedEx route enterprise.

If you tried your hand at contracting but now realize it just isn’t for you, you likely want to sell your routes as quickly as possible so you can move on to the next phase of your career—or perhaps even retirement. The following quick tips will help you prepare for the sale of your routes and maximize their value to attract the right buyer.

  1. Make sure your records are in order. Did you know that cash buyers are likely to pay more when you can produce clean financial statements? Keeping your records in order and being able to produce a straightforward profit and loss (P&L) statement will go a long way toward accelerating the sales process.
  2. Prepare a proactive due diligence package for the buyers. This includes items such as payroll reports, annual repair and maintenance records, a copy of your Fedex contract, and your most recent tax returns. Again, buyers will often pay more when the information is readily available and organized.
  3. Have your RFI (business plan) available. And be prepared to offer your buyer assistance with their RFI when the time comes to apply for FedEx approval.
  4. Be prepared to help the new buyer with contingency planning in the short term. Assuming ownership of an existing business can be daunting. However, FedEx routes will often fetch a higher price if the prospective owner does not have to worry about staff (especially drivers) leaving the moment they take over.
  5. Secure your deposit before introductions are made. This is extremely important: Make sure you have a non-refundable deposit before you introduce the new buyer to your drivers or terminal manager. For KR Capital clients, we typically ask for 10% of the purchase price to be held in escrow once the due diligence period is complete. (Note: The deposit is often refundable in the event the buyer is not approved by FedEx.)
  6. Brush up on the specifics of FedEx route valuations. For example, it is important to understand the valuation differences between a sale that is free of vehicle debt vs. a sale where the buyer assumes vehicle debt. An experienced broker can help with this.
  7. Keep all information confidential. Before you provide any information about your FedEx route business, make sure all prospective buyers sign a confidentiality agreement.
  8. Choose your FedEx broker wisely. If you are considering working with a FedEx brokerage firm, ask for a list of references and a summary of FedEx deals completed. This will allow you to see the prices they have negotiated in the past for similar route sales.
  9. Be prepared to explain why you are selling. A common buyer question is: “If the business is so great, why are you selling?” Instead of feeling intimidated by the inquiry, be prepared with a simple and honest answer as to why you are moving on. Potential buyers will appreciate the honesty and
  10. Have a reliable financing source available. The buyer may need additional capital to purchase your FedEx routes.  For this reason, it helps to have secured a reliable funding source beforehand. If you are working with a FedEx broker, they should be able to help with this.

For more information about what to look for when hiring a FedEx broker, visit our blog. KR Capital is the nation’s leading FedEx brokerage firm, with a decade of experience and more than $200 million in route sales to our credit. If the time is right to sell, fill out our brief Seller Info Request form and a member of our team will contact you shortly.