Peak Season Is Over, Now Is a Great Time to Sell FedEx Routes
Owning and operating a FedEx route business is a lucrative opportunity for the right individual. In fact, the average annual profit for a single FedEx route is between $30,000 and $40,000, and most contractors typically own five or more routes. However, there may come a time when you decide that selling your FedEx routes is the right move for your future—and the beginning of the year is an excellent time to start the process.
As with most financial decisions, timing is everything.
Like buying or selling a home, selling your FedEx P&D or linehaul routes (or both) is likely one of the biggest financial decisions you will make in your lifetime. For this reason, it is important to take into account the time of year and how that will impact the sale process.
As you know, the busiest time of year for FedEx deliveries, known as the peak season, occurs during the winter holiday months: October, November, and December. During this time, many FedEx contractors recruit seasonal drivers and obtain additional trucks to accommodate the inevitable spike in online shopping—a spike that has grown even larger in recent years due to the COVID-19 pandemic.
Because the demands of peak season can be challenging for new contractors, FedEx typically does not approve route transfers in November and December (and sometimes even as early as October). But once January begins, FedEx resumes accepting route transfers, which makes it the ideal time to begin the selling process.
How long will it take to sell your FedEx routes?
From start to finish, the transfer of your FedEx route business may take three to six months to complete. Therefore, the optimal time to initiate your sale is three to six months prior to your ideal closing time frame. If you begin the process in January, the holiday rush will be over and FedEx will be more open to approving route transfers. Furthermore, the process will be less stressful for you and prospective buyers.
Remember to have your financial paperwork in order.
Your discretionary profits over the past 12 months will largely determine the valuation of your business and, ultimately, the offers you will receive from potential buyers. When timing your exit, selling in January (after a profitable peak season with higher revenue and volume) may help bolster the financial performance of your business and result in a higher price.
Come January, you can then include the peak season profits in your most updated set of year-end financials, which will significantly improve your chances of getting the best price for your business.
Ready to sell your FedEx route? Contact KR Capital.
The best time to sell your FedEx routes is from January to August. This window allows enough time to find the right buyer and the right price—and to complete the FedEx route transfer process—well before peak season. When you are ready to move forward, contact the team at KR Capital. As the leading FedEx brokerage firm in the country, we have an in-depth understanding of how timing affects the sale process, and we are happy to answer any questions you might have about selling FedEx routes.