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    4 Replies Latest reply on Jun 9, 2014 3:20 PM by Marketing Guy

    What is the expected return of owning Fed Ex route(s)

    bigsmiles Wayfarer

      Hello folks:

       

      There was a thread about owning a Fed Ex route.  I am considering buying some existing routes and existing management/driver structure.  Based on the ads, it seems like the return is around 20-30% per year even if you don't drive the route.  That seems too good to be true.  Any one cares to comment ?

       

      Thanks in advance

      Tuan

        • Re: What is the expected return of owning Fed Ex route(s)
          Ranger

          Hello Tuan!

          Welcome to the community !  We are glad to have you here .

           

          Over the last few years we've had opportunity to discuss owning Fed Ex routes . I'm sure members will chime in with ideas and discussion about it .

          Meanwhile, read up on what has been offered in the past . It might help you gain insight as well.

           

          Have funds to purchase FEDEX ground routes. Risks involved ?

           

          Happy Posting and I'll be looking forward to your contributions.

           

          Joleen

            • Re: What is the expected return of owning Fed Ex route(s)
              Marketing Guy Adventurer

              Hey Tuan,

               

              I have looked into Fedex routes as well.  I can tell you that they are a lot of work and can involve long hours everyday.  The link that Joleen gave has a ton of good information.  Especially look at the comments by mark111 on Sep 22, 2009 9:56 PM

               

              Because it is long I won't post the entire message, but part of what he said is:

               

              First and foremost: RIDE THE ROUTE. Get to the depot at the exact time your seller does and spend the entire day with him. View what he does in the depot before he leaves, while he delivers and when he gets back. 47 miles is a long distance ( 84 round trip ) and then you have mileage on top of that for deliveries on the route. This is not like regular driving. It can be very grueling working any type of route. It is good that your know the route area because Ground does not provide custom daily "street by street" guides ( pretty much similar to mapquest ) like Fedex Home does.


              Second: If you have not done so already, request the FEDEX settlement sheets from the seller regarding the route you are considering. I would request a current sheet, which are produced on a weekly basis, and then I would also request all of December 2008's sheets. This way you can see the volume spike for the holidays and the last sheet from '08 should have a year end number.

                • Re: What is the expected return of owning Fed Ex route(s)
                  bigsmiles Wayfarer

                  Thanks so much for the reply.  For that hard work, what is the expected payoff, i.e. ROI in terms of percentage ?  For example, I am seeing a couple of ads where they show a net profit of $200K+  (after drivers and full-time non-driving manager) on an asking price of $850K, and I thought that it is too good to be true.  Is that in the ballpark.

                   

                  Thanks again in advance for your advice.

                  Tuan

                    • Re: What is the expected return of owning Fed Ex route(s)
                      Marketing Guy Adventurer

                      As far as ROI, I would expect that to vary widely.  You may want to follow mark111's advice below:

                       

                      Request the FEDEX settlement sheets from the seller regarding the route you are considering. I would request a current sheet, which are produced on a weekly basis, and then I would also request all of December 2008's sheets. This way you can see the volume spike for the holidays and the last sheet from '08 should have a year end number.  Of course, request 2013 or 2014 numbers. 

                       

                      He also says

                       

                      Finally, how about how you get paid: I only know this for home: You get paid per stop, per package delivered, per package pick up, per signature. You get paid an advertising rate per day because you are using the FEDEX Logo on the truck and wearing their uniforms. You get paid what is called a "core zone" rate every day. This rate is calculated on how far you first stop is from the depot and then how many stops you make per day. Of course, you get your fuel supplement. You will receive a monthly bonus for customer satisfaction and operating 100% according to your agreement with FEDEX. You will receive "x" amount per package delivered over threshold. If you are a multi route owner, you will receive more bonuses for excellent performance. The multi route bonuses level off when you own 5

                       

                      I would suggest you read the entire discussion here.  Lots of really good stuff.