Acquiring Minds Podcast: Building a $25M FedEx Route Empire from $100K Equity

Episode Release Date: August 4, 2025
Host: Will Smith
Guest: Avery Tomek, Owner of Tomek Logistics

Introduction

In this compelling episode of Acquiring Minds, host Will Smith engages with Avery Tomek, an entrepreneur who transformed a single FedEx route into a thriving $25 million annual empire within three years. Avery’s journey offers invaluable insights into acquisition entrepreneurship, particularly within the FedEx contractor space. The discussion delves into the challenges faced during the COVID-19 pandemic, strategic decisions that fueled growth, and the nuances of managing a large-scale FedEx operations fleet.

Avery Tomek’s Entrepreneurial Journey

[05:11] Will Smith: "Avery, you're an entrepreneur in the FedEx route space. You barely survived when you bought your first route during COVID today."

Avery began his career as a CPA but soon realized his entrepreneurial spirit was calling. Transitioning from accounting, he ventured into real estate, successfully renovating and renting out properties. However, recognizing the inflated real estate market post-COVID and seeking a more dynamic business opportunity, Avery pivoted towards acquiring a FedEx route.

[05:14] Avery Tomek: "I've kind of always been sort of a business mind entrepreneur. I went to college, UT University of Texas in Austin, graduated master's accounting."
[06:43] Avery Tomek: "I bought my first apartment complex at 26, renovating 24 units and significantly increasing their value."

Acquisition of the First FedEx Route

Amid the peak of COVID-19, Avery identified an opportune moment to purchase a FedEx route. Despite high valuations and a variable SBA loan that doubled due to rising interest rates, Avery trusted his instinct to dive in.

[08:31] Avery Tomek: "This was something where relatively little capital get into a business that's cash flowing, pays every week."
[10:07] Avery Tomek: "I paid a 4.6 multiple of EBITDA, which was high. Interest rates were cheap, but the SBA loan was variable and later doubled."

However, the post-pandemic pullback in e-commerce led to a sharp decline in package volumes, putting immediate financial strain on his newly acquired route.

Navigating Early Challenges

Facing reduced revenue from $22,000 to $18,000 weekly, Avery encountered significant financial pressure, exacerbated by soaring diesel prices and FedEx’s cost-cutting measures.

[22:15] Avery Tomek: "I paid a high price and then revenue dipped due to the end of COVID stimulus and reduced online shopping."

To counteract these challenges, Avery adopted both defensive and offensive strategies. He capitalized on the failure of other contractors by taking on additional contingency contracts from FedEx, which offered higher pay but also increased operational costs.

[23:44] Avery Tomek: "I was able to make my debt payments and buy some more trucks as other contractors failed."

Strategic Growth and Fleet Expansion

Avery's aggressive expansion strategy involved continuously acquiring more trucks, often financing them through various lenders. This approach allowed him to scale rapidly, despite initial overleveraging and temporary financial hardships.

[24:06] Avery Tomek: "FedEx pays weekly, which is the lifeline of everything. I focused on buying trucks to increase revenue."
[26:13] Avery Tomek: "The leasing company was liquidating their FedEx fleet, allowing me to purchase used trucks at half their value."

By securing an extensive fleet, Avery positioned himself to meet the rising demand as FedEx's operations stabilized and package volumes rebounded.

Insights into the FedEx Contractor Business

Avery provides a deep dive into the FedEx route business, highlighting both its potential and inherent challenges.

Pros:

• Reliable Cash Flow: Weekly payments from FedEx eliminate concerns about accounts receivable.
• Scalability: Ability to expand by acquiring more trucks and routes, limited only by the operator's capacity.
• Steady Demand: As e-commerce continues to grow, package delivery remains a necessary service.

Cons:

• High Dependence on FedEx: As a sole contractor, the business is heavily reliant on FedEx's operational decisions.
• Operational Intensity: Managing a large fleet requires constant oversight and readiness to handle crises.
• Market Vulnerabilities: Economic downturns and fuel price spikes can significantly impact profitability.

[46:30] Avery Tomek: "FedEx pays every Friday, which is one of the biggest benefits of doing this. You have no accounts receivable, no bad debt."
[70:39] Avery Tomek: "These systems are very brittle. If something breaks, it creates a domino effect."
[80:02] Avery Tomek: "You have to engineer the routes correctly to ensure trucks are full and operational efficiently."

Remote Management and Operational Challenges

A key aspect of Avery’s success is his ability to manage operations remotely across multiple states. He emphasizes the importance of having a competent management team to handle day-to-day operations, allowing for scalability without necessitating his constant presence.

[13:26] Avery Tomek: "I never planned to move out there. Running it remotely was probably the best decision I made."
[57:20] Avery Tomek: "I am on all the time, but I don't need to be. However, being very involved ensures smoother operations."

Operational headaches, such as truck breakdowns or driver absences, require swift and effective management to prevent revenue loss.

[69:37] Avery Tomek: "Scrambling is a great way to explain it. A driver doesn't show up, and suddenly you have to pull a driver from another state to cover."

Financial Metrics and Business Viability

Avery discusses the financial underpinnings of the FedEx route business, highlighting key metrics like EBITDA margins and the impact of debt on profitability.

[16:04] Avery Tomek: "If you finance your fleet of trucks, you should be able to make 8 to 10% on it."
[52:05] Avery Tomek: "Currently, my EBITDA margin is about 35-40%, which is exceptionally high."
[54:06] Avery Tomek: "Buying trucks with cash helped improve cash flow by eliminating monthly payments."

He also distinguishes between EBITDA and cash flow, noting that while EBITDA can appear substantial, cash flow requires careful management, especially when scaling rapidly.

Key Strategies for Success

Avery emphasizes the importance of being proactive in fleet expansion and maintaining a pipeline of trucks to meet rising demand. Building strong relationships with lenders and leveraging opportunities during downturns are crucial for sustained growth.

[74:06] Avery Tomek: "The more trucks, the more revenue. Even if your area is not growing, there's always something else that can pop up."
[72:11] Avery Tomek: "Look at the revenue and try to get as big as you can afford. Keep buying trucks to stay ahead of demand."
[77:33] Avery Tomek: "High threes, low fours multiples are typical for a good operation."

Resale and Exit Strategies

For those considering exiting the business, Avery suggests breaking up the fleet into individual stations for sale, as there is high demand for these opportunities among aspiring entrepreneurs.

[85:53] Avery Tomek: "I'd break it up into pieces and sell each individual station. There's a high demand for people wanting to get into this business."
[86:31] Avery Tomek: "FedEx designed it so that there are constantly people coming in to do this work because they need someone else to handle it."

Conclusion

Avery Tomek’s success story is a testament to the potential of acquisition entrepreneurship within the FedEx contractor network. His strategic approach to fleet expansion, remote management, and leveraging market opportunities underscores the viability of building a substantial business through disciplined and proactive measures. While the FedEx route business presents significant opportunities, it also demands unwavering commitment, effective management, and the ability to navigate operational challenges.

[88:33] Will Smith: "Thank you very much. Thanks for your transparency and time."

[87:56] Avery Tomek: "I'll keep going for a while. I don't know about forever. But for the foreseeable future, I'll be doing this."

Notable Quotes

• Avery Tomek at [05:14]: "I've kind of always been sort of a business mind entrepreneur."
• Avery Tomek at [16:04]: "If you finance your fleet of trucks, you should be able to make 8 to 10% on it."
• Avery Tomek at [46:30]: "FedEx pays every Friday, which is one of the biggest benefits of doing this."
• Avery Tomek at [74:06]: "The more trucks, the more revenue. Even if your area is not growing, there's always something else that can pop up."
• Avery Tomek at [85:53]: "I'd break it up into pieces and sell each individual station."

Takeaways

• Strategic Acquisition: Timing and market conditions are critical when acquiring a business, especially in a fluctuating market.
• Scalability: Continuous fleet expansion can drive substantial revenue, but requires effective debt management and operational oversight.
• Remote Management: A strong management team is essential for running operations across multiple locations without the owner’s constant presence.
• Financial Discipline: Understanding the difference between EBITDA and cash flow is crucial for sustainable growth.
• Proactive Opportunities: Leveraging market downturns and being ahead of demand can position the business for rapid expansion.
• Exit Planning: Breaking up the business into smaller units can facilitate easier resale and attract a larger pool of potential buyers.

Avery Tomek’s journey offers a masterclass in resilience, strategic growth, and effective management within the FedEx contractor ecosystem, providing a roadmap for aspiring acquisition entrepreneurs.