Owning a FedEx route is one business idea that several individuals and organizations have recently turned their attention to, it’s certainly an enticing business idea that helps you generate more income.
For several years now, FedEx routes have been purchased by individuals and companies for the purpose of growing a kind of FedEx subsidiary business and making profit.
The buyer essentially buys the right to handle FedEx deliveries in certain routes. The customer sees them as FedEx workers, but they are actually working for themselves after buying the routes.
So, can you finance a FedEx route? This question has been asked by several folks who may be trying to buy FedEx routes and start making deliveries for FedEx.
Being one of the top courier service providers especially in the United States, you are certainly not going to bother much on getting packages to deliver. With the high patronage enjoyed by FedEx in the U.S, financing a FedEx route can usher you into a new business environment where you make considerable profits.
On this article, we are providing all the relevant information on financing FedEx routes, continue reading this article to learn more.
We have also written lots of articles for both FedEx customers and employees, see them here.
- What Is A FedEx Route?
- Can You Finance A Fedex Route?
- What Happens When You Buy A FedEx Route?
- Types Of FedEx Routes For Sale
- Are FedEx P&D Routes Profitable?
- What Should I Do Before Buying A FedEx Route?
- Benefits Of Buying A FedEx Route
- Requirements For Buying A FedEx Route
- How To Evaluate A FedEx Route
- FedEx Route Business Plan
- What Is A FedEx Linehaul Route
- How To Find FedEx Routes For Sale
- SBA Approved FedEx Routes For Sale
What Is A FedEx Route?
FedEx routes are essentially the different delivery routes that FedEx does deliveries to clients, these routes are the delivery areas handled by FedEx. For a long while, FedEx has been contracting these routes to business owners who operate independently.
FedEx deliveries are grouped based in routes, each route is contracted to individual business owners who manage pickups and deliveries for those routes, they employ and train people to work for them.
Essentially, these business owners are now responsible for both FedEx Ground and Home Deliveries in those routes once FedEx hands over the routes to them.
Can You Finance A Fedex Route?
FedEx mainly consider business owners that have good experiences in business, approval is given after FedEx must have interviewed the potential buyer.
Truth is, FedEx is so particular about the level of business experience you have, they want to make sure that you can handle the business effectively and maintain the standard FedEx is known for. You need to read this: Does FedEx Drug Test Package Handlers?
What Happens When You Buy A FedEx Route?
Generally, when you buy a FedEx route, you take possession of the trucks and even the existing employees that were working for the former route owner.
When you buy a FedEx route, you now take over all existing equipments that were used for those routes, the daily operations in those routes now become your responsibility to oversee.
Types Of FedEx Routes For Sale
Before proceeding to finance a FedEx route, it is important that you know the different types of FedEx routes for sale.
At FedEx, there are mainly two types of routes, these are:
1. FedEx Ground Pickup And Delivery Routes
The FedEx ground pickup and delivery route is all about deliveries to residential or local homes and offices in specific areas. Every home and office delivery for FedEx is categorised under the FedEx Ground P&D.
2. FedEx Ground Linehaul
The semi-trucks you see on the highways transporting shipments from one FedEx facility to another are categorized under FedEx Ground linehaul.
This means you can take charge of FedEx routes making deliveries to homes and offices, or moving freights from one facility to another. Also read: Does FedEx Xray Packages?
Are FedEx P&D Routes Profitable?
Yes, buying a FedEx Ground Pickup and Delivery route is a lucrative business if you manage it properly. The average profit margin for FedEx P&D routes is 20%.
That being said, you should understand that there is no specific rule when it comes to how much you make, it depends on several factors like types of routes, region of routes, management expenditures, etc.
We can’t deny the fact that some routes are more profitable than others, and these routes typically make more deliveries than others, all these factors come together to determine the profitability of the FedEx route. Also read: Does FedEx Take Pictures Of Delivery?
What Should I Do Before Buying A FedEx Route?
Just before you venture into the purchase and running of a FedEx routes, you should make sure that you have enough information and make proper research. This will help you to buy the right route and avoid mistakes.
Below are the few recommended things you should do before buying a FedEx route.
1. Riding The Route
This is a very important thing you should do before buying a FedEx route, you shouldn’t buy a FedEx route withing riding it.
Riding it will give you more knowledge about the route and you’ll be aware of the present condition of the trucks and equipment. Most importantly, it gives you a chance to see the state of employees, if they are happy or not.
2. Researching About Route Delivery Rate
You don’t want to buy a route that doesn’t have high rate of deliveries. Always go for a FedEx route that has a good number of daily deliveries, get a route that their delivery men are always on the streets.
3. Check Debt Profile Of Current Route Owner
You need to check the current debt profile of the owner, this is very important because you may have to take over the lease or loan monthly payments.
Benefits Of Buying A FedEx Route
There are many benefits of owning a FedEx route, read them below.
1. Have A Business On A Structured System
This is the major benefit of buying a FedEx route, you get to own a delivery business that is sitting on an already structured system.
2. No Need To Look For People To Employ Or Trucks To Purchase
When you buy a FedEx route, you get the chance to start a business without necessarily having to go source for employees or equipments to buy. You can just take over the current employees and equipments from the previous route owner.
3. No Need To Advertise Your Business
Since FedEx is a well-known courier service provider, you don’t have to advertise your business to get clients. You are basically handling deliveries that are sent to FedEx, customers don’t know you but FedEx. Also read: Does FedEx Deliver On Martin Luther King Day?
Requirements For Buying A FedEx Route
Since FedEx’s delivery standards must be maintained, the company has set some requirements for potential route buyers. To be able to buy a FedEx route;
- You must register your business as a corporation.
- Your drivers must not have more than one violation in the last one year, and not more than three moving violations within the last 3 years.
- Your drivers must have Valid Commercial Driver’s License (CDL).
Your drivers must pass a physical and drug test for the Department of Transportation.
How To Evaluate A FedEx Route
Before buying a FedEx route, it is important to evaluate the route to ascertain if it has the potentials to give you a good return of investment, it will also help you to set future goals.
FedEx routes are evaluated based on;
- Payroll Expenses
- Truck Maintenance And Repair Expenses.
- Fuel Expenses.
- Total Revenue Generated
- Route Type (Whether rural or urban).
- Cost Of Running A Business In Route State.
- Distance Between Each Stops In Route.
Once you are able to get the required information above, it helps you to evaluate the FedEx route you want to buy and know if it’s a good move or not.
FedEx Route Business Plan
When looking for a business plan for your FedEx Route purchase, you need to make sure you get a business plan consultant that will provide a comprehensive business plan that is in accordance with the United States Small Business Administration (SBA) guidelines.
There are a few business plan consultants like MyGround Support offering Business Plan for FedEx routes purchase.
What Is A FedEx Linehaul Route
A FedEx Linehaul Route is simply the category of drivers transporting shipments from each FedEx facility to another. These are the drivers that pickup packages in bulk from airports to FedEx warehouses, and from FedEx warehouses to local facilities.
These routes are not for home or office deliveries, they are mainly for terminal to terminal deliveries. Also read: Does FedEx Pay Weekly Or Biweekly?
How To Find FedEx Routes For Sale
There are a few ways you can find a FedEx route for sell, see them below.
If you have contacts with people in the shipping and logistics industries, you can get to know the available FedEx routes for sale. This is undoubtedly the best and safest way to find a FedEx route that is up for sale. However, not everyone would have contact, this is why you should read other options.
2. Business Brokerage Websites
3. FedEx Website: BuildaGroundBiz.com
You can find lots of available FedEx Routes on their website BuildaGroundBiz.com. The platform is solely dedicated to posting FedEx Route opportunities and it is the most reliable source.
SBA Approved FedEx Routes For Sale
You can find SBA approved Fedex routes that are available for sale at BuildaGroundBiz.com, this website is owned by FedEx and all opportunities posted there are SBA approved.