How much does a Used Restaurant Equipment Dealer cost to buy?

A typical Used Restaurant Equipment Dealer sells for 1.5x to 2.5x seller's discretionary earnings. With estimated SDE of $263K, expect to pay roughly $394K to $656K before adjustments for assets, debt, growth, and local market quality.

How much does it cost to start a Used Restaurant Equipment Dealer?

Startup costs range from $60K to $250K depending on location, equipment, and scale.

Physical

Used Restaurant Equipment Dealer

Q: What are the profit margins for a Used Restaurant Equipment Dealer?

The average profit margin for a Used Restaurant Equipment Dealer is around 35%. Primary costs: warehouse rent ($3K–$8K/month), forklift/pallet jack, delivery vehicle, cleaning/refurb labor, website hosting, and insurance. Owner-operators who do their own sourcing and selling keep net margins above 30%.

Restaurants fail at 60% in Year 1 — generating a never-ending flood of commercial-grade equipment at 10 cents on the dollar

Bottom line

Worth studying, but do not buy without strong local proof.

Used restaurant equipment dealers buy commercial kitchen equipment at bankruptcy liquidations, restaurant closures, and estate sales — typically at 5–15% of new retail cost — and resell to new restaurant owners and caterers at 40–65% of retail. The supply chain is grim but reliable: ~60% of restaurants close in their first year, releasing $50K–$500K in commercial equipment per closure. A Hobart commercial mixer that retails for $6,000 new goes for $300–600 at liquidation and resells for $1,500–$2,000 at the dealership. A 5,000 sq ft warehouse with rolling inventory turns 3–5x annually at 35%+ margins.

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Acquisition score

Excellent

Avg Revenue

$750K

Profit Margin

35%

Acquisition Multiple

1.5x - 2.5x

Startup Cost

$60K - $250K

How It Works

Dealers source equipment from restaurant liquidators, public auctions (PAR, Heritage Global), bankruptcy trustees, and direct owner outreach. Equipment is cleaned, lightly refurbished, tested, and listed online (eBay, Craigslist, RestaurantEquipment.com) and in the showroom. High-velocity SKUs include fryers, mixers, slicers, refrigeration, and hood systems. Delivery and installation services add 10–20% revenue per sale. Dealers who do refrigeration service in-house capture the highest-margin work.

Revenue Range

Low End

$280K

Typical

$750K

High End

$2.0M

Pros

+Captive, counter-cyclical supply — more restaurant closures in recessions = more cheap equipment to buy
+35–45% gross margins with low per-unit acquisition cost
+Online reach extends the buyer pool nationally for high-value equipment
+Add-on services (cleaning, refurb, delivery, installation) compound revenue per transaction
+Low competition: most equipment dealers are local, owner-operated, and not easily scalable by outsiders

Cons

-Inventory-heavy: $80K–$250K in floor stock required for serious volume
-Storage and handling require a warehouse with loading dock and lift equipment
-Refrigeration equipment requires certified techs for legally compliant servicing
-Inventory can sit — slow-moving specialty equipment ties up capital

Best For

Operators with warehouse access, basic mechanical ability, and comfort buying at liquidation auctions

Operating Costs

Primary costs: warehouse rent ($3K–$8K/month), forklift/pallet jack, delivery vehicle, cleaning/refurb labor, website hosting, and insurance. Owner-operators who do their own sourcing and selling keep net margins above 30%.

SBA Financing Estimator

Adjust the deal — see if it cash flows after debt service

+$6K/mo

after debt service

Deal price — $1.5M

Range: $750K (1.5×) to $2.6M (2.5×+)

Down payment — 15% ($225K)

SBA minimum equity injection is 10% for change-of-ownership

Interest rate — 8.00%

Current prime-based SBA rates: 7.5–10.5%

Loan term — 10 years (120 mo)

Standard SBA 7(a): 10 years for business acquisition

Down payment

$225K

15% equity injection

Loan amount

$1.3M

85% SBA-financed

Monthly payment

$15K/mo

$581K total interest

Monthly profit

$22K/mo

at 35% margin

Monthly cash flow after debt service

+$6K/mo

Down payment paid back in ~36 months — strong return

Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.