Timing Is Everything When You Decide to Sell Your FedEx Routes
Some of the most common questions we hear from FedEx contractors who are ready to sell their routes have to do with timing. When is the best time to sell my routes? How will I know when it’s time to sell? Should I sell before or after peak season? Do route prices vary with the time of year?
When determining the best time to sell your FedEx routes, it is important to understand that routes are consistently bought and sold based on a multiple of your profitability in a given year. So, while your revenue and volume may fluctuate throughout the year, your routes will be valued based upon how they have performed in the past and present.
That said, FedEx is typically hesitant to welcome new contractors into the business during the busy peak season (October through December). This is especially true thanks to the recent uptick in online shopping spurred by the pandemic, which has significantly increased delivery volume during those months.
For this reason, we recommend beginning the process early in the year—and by August at the very latest—as it can take several weeks (and sometimes months) to procure the right buyer and the right price. In addition, the FedEx transition process takes about 30+ days to complete.
What if a contractor recently acquired new routes?
Typically, contractors are awarded new routes because they are in good standing with FedEx and have demonstrated a desire to stay with the company long term. But if the past two years have taught us anything, it’s that things can happen unexpectedly and business owners are often forced to make tough decisions. That means some contractors may be looking to sell FedEx routes even though they recently acquired or are set to acquire a new FedEx route.
Most potential buyers, however, have never been a FedEx contractor before. The FedEx business is entirely new to them, and the addition of a brand new route may negatively sway their decision. Because buyers will often look at historical data to determine the performance of a route, it is difficult to convey the financial implications of a new route to a buyer without any prior knowledge of the business. In most cases, presenting buyers with a projection of a new route will not be enough to convince them to buy, so it may be worth waiting a bit longer before you sell.
More questions about when to sell FedEx routes? Talk to the experts at KR Capital.
Along with knowing when to sell, there are plenty of other questions to consider before selling your routes—which is why having a knowledgeable partner on your side can help you determine whether or not now is the best time to sell. The KR Capital Seller Resources page contains extensive information about how and when to sell your routes, but our experienced team is also happy to speak with you and help guide you in your decision making process. Simply fill out our online form and you’ll hear back from us shortly!