Are you considering buying a bread route? If you are, there are some things you should know before moving forward with your plan.
Some well-known brand-name breads like Nature’s Own, Wonder, Sara Lee, and Pepperidge Farm are often part of a bread route. You can make money from each loaf of bread sold from your route.
Generally, bread routes are a solid investment when you buy an established business that will generate consistent income from the start. It is a business model that has been used for many years, plus the market for these routes is robust.
While this makes it seem really great, you cannot just consider the benefits of buying any business. You must also consider the downsides.
The following paragraphs will address the elements of owning a bread route and pros and cons of ownership.
What is a Bread Route?
A bread route is a distribution route with a predefined, exclusive territory. These routes are owned by independent business owners with the rights to handle accounts in their respective territories. The route owner, or someone working for the owner, will pick up the bread from the supplier’s warehouse and then transport and distribute breads to the appropriate businesses.
How Does a Bread Route Make Money?
Your income will depend on commissions, which is commonly around 20%, depending on the businesses and the bread suppliers. You are buying the bread from the company at wholesale prices in most cases, and then reselling it to your designated accounts with a preset markup. The markup is basically your commission.
The Basic Requirements for a Bread Route Business
It is common for there to be a few differences between the bread companies, but most bread route businesses have similar requirements and policies.
- Buy the Route – This includes the vehicles and the tools necessary to operate the business.
- Hire Employees – You may find that distributors sometimes help with this.
- Buy the Bread – You will buy the bread from the bread distributor to resell it on the route. Sometimes distributors will allow you to distribute the bread for free by taking a cut from your profits.
- Loading and Unloading the Truck – This job requires you to lift and carry the bread when you pick it up from the bread distributor and when you are delivering it to the businesses. Whether it is you or an employee, the person doing the work needs to be able to lift and carry the products.
- Set Up and Maintain Bread Displays – You are usually responsible for setting up the store displays and also maintaining them, unless the route business delivers packages.
Something to consider is that if your bread route business requires a truck, a CDL license may be required in some cities, states, etc.
What are the Pros and Cons of Owning a Bread Route Business?
- Be Your Own Boss: As a bread route owner, you get to set your own hours and schedule to some extent. The only exception would be for businesses that only accept deliveries at certain hours.
- Potential Growth: There is the potential to add more accounts to service, or expand your territory.
- Income Stability: Usually, bread routes are already established, so you can have a steady income from the get-go. Remember, the amount of money you make relies on the distributor.
- High-Demand Product: Bread is in high demand, as is the ownership of a bread business. You can make money with it, and/or sell it once you want to quit at a profit.
- Startup Costs: The initial investment is probably going to cost a lot, since you are purchasing a route.
- Risks: There are sometimes risks involved, as with any business, where if you are provided damaged or spoiled bread, it will be your loss.
- Distributor Problems: Your distributor may be low on product sometimes. The warehouse may be a long drive. You may have issues with getting bread delivered to you from warehouses that are far away from you.
- You are a Small Business Owner: Essentially, you are an independent contractor, which means you are responsible for route coverage if your employee is sick or taking a vacation. There are services that will do the work for you for a take of your profit.
Buying a bread route business can be a great investment. However, like any kind of job, you will run into pros and cons along the way. There are and always will be uncertainties in business ownership. Whether you buy a bread route or not depends on what you are willing to endure.