If you are an investor ready to chart your own business path, we think you should give investing in FedEx routes serious consideration. You will be poised for success in the route industry if you bring a few of these traits and know-hows along to the investment…
As you evaluate potential FedEx routes for sale as an investment, you need to consider the financial implications of each route’s geography. Routes that are more rural or more urban have specific challenges and benefits.
Investors who buy FedEx routes provides services as Independent Contractors (ICs) or as Independent Service Providers (ISPs). Route owners do not operate franchises.
MYTH: Investors can't use financing to buy a fedex route
FACT: you need to find the right route and the right financial institution
Potential buyers often turn to bank financing to purchase FedEx routes. If you are considering financing a FedEx route, the two most common types of loans are a Small Business Association (SBA) loan and a conventional loan.
You are charging FedEx for your services. You will negotiate each of the following ten charges with FedEx. All of these charges combined account for money flowing into your business. It’s critical you understand how and when those charges occur. And how you can increase your cash flow! Following is a quick overview of the charges you will negotiate as part of your Independent Service Provider (ISP) contract.
If you are considering investing in a FedEx route for the first time we recommend starting with a pickup and delivery (P&D) FedEx business. A Fedex P&D route business is easy to learn and simple to operate.
Questions that will help ensure success when you buy a FedEx Ground route.
While a very profitable business, FedEx route businesses do not generate profit margins of 30% or more. As you look to buy a FedEx route, look for P&D businesses with profit margins between 15 and 20% of revenue. These are healthy businesses!
There are two distinct types of FedEx businesses: pick-up and delivery (P&D) routes or a linehaul run.
Linehaul runs are a lucrative and risky business. Some contractors say linehaul runs are 90% boredom and 10% terror. But they can be an incredibly profitable investment for the right contractor.
Are you the right contractor for a linehaul run?
For Independent Service Providers (ISPs), Independent Contractors (ICs), and linehaul operations, FedEx offers bonuses to contractors that go above and beyond.
Bonuses can add a substantial amount to your overall revenue each year. Whether you are an existing FedEx contractor or looking to buy a FedEx route, obtaining contractor bonuses should absolutely be part of your financial goals and strategies.
FedEx contractors cite many reasons for selling their FedEx routes: they are ready to retire, spend more time with family, or simply get a change of pace.
At the current moment, however, there is another reason so many contractors are selling their FedEx routes: FedEx is currently undergoing major changes to make the business more efficient and profitable.