Pros And Cons Of Owning A FedEx Route

Pros And Cons Of Owning A FedEx Route

It may surprise you to know that one of the ways to get a real passive income from a legitimate business is to buy a FedEx route.

In this case, you are partnering with FedEx, which is a highly respected and well-known shipping service that also provides you a great return on investment.

As with any business, there are pros and cons of owning a FedEx Route that we will discuss.

Before you invest in a FedEx route, you will need to understand the process. 

  1. Where do you buy a FedEx route?
  2. How much does a FedEx route cost?
  3. How much can you make from a FedEx route?
  4. What are the requirements of FedEx contracting?
  5. What should you look out for when analyzing a FedEx route?
  6. How will you finance your investment in a FedEx route?

What is a FedEx Route?

FedEx is a delivery facilitator with routes offered to independent business owners. There are two kinds of routes.

1) Ground Pickup and Delivery, P&D, for home and business deliveries

2) Ground Linehaul for long-distance transport deliveries

Box trucks or vans with the FedEx logo all over them are the usual method of delivery to homes and businesses via the P&D routes. P&D routes offer designated territories that FedEx determines. Linehaul routes can be cross-country deliveries that are serviced by tractor-trailer drivers. 

For the purposes of this article, we will focus on P&D routes because they are more predictable, easier to buy, and easier to manage than Linehaul routes.

Pros & Cons of FedEx Route Ownership

Pros

Partnering with FedEx

When you partner with FedEx, you are partnering with an already established,  and widely used delivery service provider.

The infrastructure is in place and has been well tested and proven. You won’t be starting from scratch, worrying about competition, or getting customers. 

High Profitability

There is a huge potential for high profits in this business model. 

Solid Passive Income Potential

Once you have reliable drivers and managers, you can benefit from the passive income this partnership provides. Some may even come with a few drivers already on the payroll.

Independence – Be Your Own Boss

You own your own business, but also your time and your life. That’s hard to put a value on.

Robust and Dynamic Market 

This business is undeniably robust and dynamic, with a high market value to boot. Once you decide you no longer want to own a FedEx route, you can likely sell it at a profit.

Cons

Expensive Startup Costs

Even a small route can come with a $100,000 plus price tag, so it is very expensive to get started. Also, you will need working capital to maintain payroll and truck maintenance and repairs. 

Hiring, Training, and Retaining Employees

It is on you to hire, train, and retain employees. Van and box truck drivers, office managers, and other employees will be needed to help operate this business. 

Truck Repairs and Maintenance

Once you buy a FedEx route, you own the vans and/or box trucks. You also own the repairs and maintenance that come with ownership.

Adhering to the Rules of FedEx

You must adhere to FedEx’s rules and policies.  For instance, route owners must own at least five routes or 500 stops daily. You must run both business and residential routes in your defined territory. 

Conclusion

The passive income you can earn from a FedEx route is a huge plus with this kind of business.

On the other hand, you are accountable for employees, hiring, training, retaining, and maintaining them. If a truck breaks down, you have to get it fixed quickly to avoid losses from having to rent out vehicles to keep deliveries going. 

You are partnering with a well-known name in the delivery industry, so there isn’t much to do to get business. The competition isn’t that fierce, after all. On the other hand, you need to continually update our contingency plans and strategic planning to maintain the business.

Essentially, a FedEx route can potentially run itself when you make good decisions and treat your employees well. 

The potential to make enough money to not worry about your finances is definitely there with this business. Ultimately, it depends on whether you can handle the downsides that come with the upsides of owning a FedEx Route. 

It’s wise to do your research and make sure your strategy is solid enough to keep things going with as little disruption as possible. All in all, the pros and cons of owning a FedEx route are essentially how you should look at any business.