Are FedEx Routes Good Investments?

fedex routes for sale california.jpg

Short Answer: Yes

Although it feels as if our world is already dominated by e-commerce, the market is not nearly done growing!

In Q4 of 2008 e-commerce accounted for 3.5% of Total Retail Sales in the United States. After ten years e-commerce was 9.9% of Total Retail Sales in Q4 of 2018.

As big as e-commerce feels and as much as it gets coverage in the news, there is a lot of market share left.

We predict the e-commerce expansion to rise steadily for the next ten years. The total e-commerce volume will be so significant that we believe there will be enough business for all the current logistics players to sustain themselves and for new players to enter the market and thrive.




When You Buy a FedEx Route, You Are Buying a Revenue Stream

FedEx routes have predictable revenue because there are very few variables that impact it. You can model both the current revenue stream of a business, opportunities for efficiency, and market growth to understand potential profit.

Your profit is what you are left with after you account for all revenue and subtract all expenses. Your profit margin is your profit represented as a percent of Total Revenue.

Established, healthy FedEx P&D routes have profit margins generally ranging between 15% and 25%. This means well-running operations with a Total Revenue of $1 million make a profit of $150,000 to $250,000 per year. In rare cases, P&D margins can reach 30%—any higher than that and you can know, with confidence, that someone is cooking the books.

Linehaul operations have profit margins ranging between 20% and 45%, depending on the included distances and solo driver vs team driver structure. Successful linehaul operations with a Total Revenue of $1 million make a profit of $200,000 to $450,000 per year.

Is Amazon a Threat to FedEx Investments?

If you worry about Amazon Logistics we recommend you review our extensive reviews of Amazon Logistics routes, but the short answer is no.

Amazon is not a threat to an investment in FedEx routes.

Less than 3% of all FedEx Ground deliveries are Amazon packages. Over 97% of the revenue FedEx Ground contractors bring into their business each year has nothing to do with Amazon.

Further, Amazon is a nascent logistics company and contractors currently working with Amazon highlight many concerns. Again, we have many pieces addressing outlining why the threat from Amazon is immaterial.

What’s Next?

The best way you can get started with an investment in FedEx routes is by doing your research. We have a new investors collection for those new to the FedEx Ground market. It covers all of your top questions.

We also highly recommend you identify your target route price. In order to determine your target route price for FedEx Ground routes, you need to consider what type of down payment you can make. Additionally, you should think through your take-home pay expectations.

Our exclusive Target Route Price Calculator will walk you through the possibilities so you can narrow your focus.

Reach out to our team for additional education about this constantly evolving, but ever-growing market segment.