1 reply to this topic

[mikepn]

Well, I decided about a year ago that I wanted to get into the vending business. I decided to buy an existing route, rather than starting from scratch. I finally found a route that I think is ideal for my situation, especially since I have all the needed money to buy the route and service it in cash, and its a small enough amount that if I totally mess everything up and lose it all, it wouldn't be the end of the world. The transaction hasn't actually occurred yet, so I could back out.

Anyhow, all the machines are el-cheapo mechanical machines located in break rooms at various smallish businesses (banks, small retail stores, etc). The break rooms that I saw so far were so small that it would probably be impractical to ever put a decent electric machine in there and all the accounts are fairly minor (machines filled once every other week), so I'm not afraid of a big vending business shoving me out.

Anyhow, the family that owns the route at the moment has been excessively busy over the past year, so their prices have not increased with the increase in costs of the products in bulk. Just about everything is set to $.50, so if you're paying $.41 for a Snickers bar at Sam's, after you pay sales tax, you're clear just about $.07 per bar. Yikes.

So, anyhow, I will have to increase some prices. Does anyone have suggestions on how to do this tactfully? I plan to just fill the machines at the current prices for a month or two, so that no one gets mad at the fact that the route changed hands. However, after a while I will have to raise prices. Any tips would be appreciated. Also, how quickly should I raise prices? Should I raise prices in one step to the desired price? Or should I raise prices in steps?

Also, if you have any tips for newbies that you wish someone told you when you were starting out, let me know. Thanks!

[Agee Vending]

Well, I decided about a year ago that I wanted to get into the vending business. I decided to buy an existing route, rather than starting from scratch. I finally found a route that I think is ideal for my situation, especially since I have all the needed money to buy the route and service it in cash, and its a small enough amount that if I totally mess everything up and lose it all, it wouldn't be the end of the world. The transaction hasn't actually occurred yet, so I could back out.

Anyhow, all the machines are el-cheapo mechanical machines located in break rooms at various smallish businesses (banks, small retail stores, etc). The break rooms that I saw so far were so small that it would probably be impractical to ever put a decent electric machine in there and all the accounts are fairly minor (machines filled once every other week), so I'm not afraid of a big vending business shoving me out.

Anyhow, the family that owns the route at the moment has been excessively busy over the past year, so their prices have not increased with the increase in costs of the products in bulk. Just about everything is set to $.50, so if you're paying $.41 for a Snickers bar at Sam's, after you pay sales tax, you're clear just about $.07 per bar. Yikes.

So, anyhow, I will have to increase some prices. Does anyone have suggestions on how to do this tactfully? I plan to just fill the machines at the current prices for a month or two, so that no one gets mad at the fact that the route changed hands. However, after a while I will have to raise prices. Any tips would be appreciated. Also, how quickly should I raise prices? Should I raise prices in one step to the desired price? Or should I raise prices in steps?

Also, if you have any tips for newbies that you wish someone told you when you were starting out, let me know. Thanks!

I've done exactly the same thing you're doing now. And I've turned some of those accounts in to winners increasing sales 3x. The first thing you have to do is show up every week, on the same day at almost the same time, and keep fresh product in there for at least a month. Once the employees see you are serious about customer service, raising prices are not that hard. One thing I have learned is to raise prices slowly, if your selling chocolate for .50, dont go and raise it to .75, go up to .65 let is stay there for a month or two and then go to .75... if you need to raise more then follow that method. I used to believe that you could just, bam increase prices and they would be shocked... and if you have to bring them back a touch, then you could back off the price. Let me tell you that WILL NOT WORK. If you raise prices, and then lower them... you'll have a raging battle every time you raise them. But if you take baby steps, you have a price, they may grumble, but you can gauge their comfort level and won't have to retreat. People are willing to pay for good quality vending services. If you're there every week and your machines are clean and full of fresh snacks and drinks, and you provide unquestioning customer service. Price increases will not be a problem.