When you’re looking to start a business in the logistics industry, it’s can be increasingly challenging to find the right mix of space and financial efficiency. For many, buying FedEx routes is the answer – it gives the best of both worlds. And, indeed, the company has nailed it. Its reputation is something it rightly deserves.
However, there are a few things to know before you decide to buy FedEx routes. Because it’s such a big move, it’s important that you have a good idea of whether you can really continue it in the long run and make a handsome living. So let’s see some pros and cons below:
The Good Parts of Doing FedEx Route Business:
- You Don’t Start From Scratch: If you were to start your own logistics business, you’d have to build the entire infrastructure from the ground up, buy all the equipment, and establish your business’s authority, so brands and individuals give you business. But with the FedEx route, you don’t have to have to do any of this; they have all the resources and business coming to the left, right, and center. You can just step in and start filling orders.
- It’s Reliable: The FedEx route business model is extremely lucrative and long-term. It’s been here for decades and is only growing with time, especially since the e-commerce revolution. So you don’t have to worry about FedEx going out of business in the future, which almost guarantees future sustainability and financial security.
- Semi-Passive Income: Entrepreneurs are going all in to build businesses that can generate passive income for them for years. You don’t have to do this if you get into the FedEx routes business. Although it’s not entirely hands-off, no business is fully passive; it is semi-passive. This means by giving less time (a few hours a week) in managing it; you can generate a monthly income.
- Future Sale: If you decide to just sell your routes business in the future and retire to a Hawaiian island, you can do that! Depending on the sale timing and how well your business is doing, you can get most of your initial capital out or even make some profit.
The Bitter Areas of Fed Ex Route Business:
- High Initial Capital: Keep in mind that you have to have at least $1 million to purchase a decent route.
- Inconsistent Profits: Although most FedEx routes stay profitable throughout the year, you can experience highs and lows in cash flow, depending on the season.
- No Innovation: FedEx route planning might not be for you if you like to bring your own ideas to the business. The rules are very strict, and you need to follow them to a T. This leaves little to no room for innovation.
- Risks: Logistics business is one of the risky ventures because when operating several trucks day and night, accidents or breakdowns are a strong possibility. Although there are FedEx coverage options available, those who don’t like taking such risks may struggle.
Over to You:
No matter how lucrative a FedEx route business might seem, it’s not the right investment for every entrepreneur. So now it’s up to you to weigh the merits and demerits depending on your goals and risk appetite and make a decision.