Why Contractors Sell FedEx Routes
Buying a FedEx route is an amazing opportunity to operate a profitable business and be your own boss. But as you begin researching available routes, you might wonder why there are so many FedEx routes for sale. If owning a route is a lucrative investment, why would contractors sell FedEx routes?
As it turns out, there are many reasons why route owners decide to let go of their routes. Here are the most common motives:
- Overwhelming Fast-Paced Growth
Thanks to the rise of online shopping, the delivery business has been booming. This rapid growth has required contractors to obtain more vehicles and drivers while readjusting their daily operations. For some owners, trying to meet the current demand is too challenging, so they list their routes for sale.
- Different Expectations
A FedEx route, like any other business, is not for everyone. If a contractor purchases a route and doesn’t find the job fulfilling, they might choose to move on and pursue another career.
In light of the COVID-19 pandemic, many people have changed their lifestyles or shifted their priorities. This has often involved relocating to other parts of the state or country.
Fortunately, for FedEx contractors, relocation doesn’t mean they need to give up their career. A contractor can sell their route and buy a new one in the area they’re moving to.
- New Goals
Operating a FedEx route can be a rewarding experience. But as life goes on, it’s natural for contractors to switch gears and pursue other personal or professional goals. Selling their FedEx route can enable the contractor to do just that.
- Health Issues
The delivery business requires physical tasks like bending, lifting, and driving. Even absentee owners may be required to participate in the delivery fulfillment if the staff is not sufficient enough to do it on their own. Individuals who may have an underlying health condition may not be equipped to handle the physical demands of this type of work. This may ultimately prompt some contractors to pursue a career in a less physical field.
Retirement is perhaps the most common reason we see routes being offered for sale. There are a large number of contractors who have been in the business for over 20 years and have simply decided their career with FedEx has run its course.
- FedEx Scale Cap Requirements
FedEx has recently placed strong restrictions on how large a contractor can get at a given terminal. These scale requirements have been implemented as a way for FedEx to diversify their reliance on any single FedEx contractor. If a contractor grows to be exceedingly large at a given terminal – and experiences major operational issues with the business – FedEx may have a difficult time filling the gap in service. It is for this reason that FedEx has imposed scale requirements, which have typically ranged between 10-20% depending on the terminal.
A contractor who handles too many deliveries in their terminal may be asked to sell or otherwise downsize in order to accommodate these scale requirements.
Buy and Sell FedEx Routes with KR Capital
If you are interested in exploring FedEx route ownership, start by browsing our available routes and submitting a buyer info request form. You can also find educational content about buying FedEx routes on the KR Capital blog.
Do you already own a FedEx route and want to sell your routes? We’re here to help you, too. KR Capital offers comprehensive route valuations and support for the sales process.
Contact KR Capital at (503) 664-0753 or complete an online form to learn more.