VENDINGCHAT.COM

I am going to try the same thing with coke 16.9 oz. and pepsi 24 Oz. I am not worried about being denied a sale. Due to the fact that sams sells the 16.9 ounce Coke and 24 ounce pepsi, so you can buy as much as you like. What machines are vending the 24 ounce pepsi's . Do you need a glass front ?

The reason I was buying the 24 oz. bottles from WalMart is because my local Sam's Club does not offer them, though other larger Sam's Clubs do. If your's does, then fine - you shouldn't have anything to worry about.

I put the 24 oz. bottles in my BC10 soda machines. Those are made by Wittern Group (probably Fawn Manufacturing which is part of the Wittern Group). Sometimes they are called CB500s, depending on who you go through to get them.

Contracts are tough. Typically for a contract to be enforcable you have to have some sort of consideration for it, just dropping your machine on the location and saying it will be here for 3 years, sign here, wont do. The coke and pepsi guys here pay some sort of commission and an energy reimbursment. I took out a the pepsi guy, who had a contract, by being local, and paying them more $. I have a 3 year contract that they can end with 60 days notice and I pay a 12% commission to them, its about $120 a month and a $1 a day energy reimbursment. I also worked out the commission to be due 30 following the end of the month, so my commission for 10/31 is due 11/30, which gives me about 60 days of float on the money interest free. I know you're saying... wow that 15%, my margins are 60% on this account, i'm getting .75 on a can of soda and after the commission is only .11 and I'm still over my target 50% on cans. What i'm trying to do know is lower my sales tax basis by calling the .11 cents a location fee and making a disclaimer about it on the machine, that would mean I'd only pay sales tax on the .64 and not the .75, that could save me almost .01 a can.

I don't do contracts of any kind, period. They are a complete waste of time. If your accounts wants you out of there, all they have to do is boycott your machines and you will gladly pull them. Conversely, if the account does not produce good GP against a reasonable COG and is not all that profitable, you certainly don't want to lock yourself into that account.

My experience is that when you go in and do a great job and keep the bar raised, you will have that account forever barring closures, etc... I would not waste a single minute of my time on a contract no matter how large the account is. Just because it is big does not mean it will be profitable. And that - profit - is what makes any account worthwhile.

I am considering using a locating service but don't know how to separate the wheat from the chaff. Anyone have a list of questions I should be asking when I interview different services? How can I protect myself from paying for bad locations?

NG

Great advice in just one word: Don't. If you can't do the locating yourself, stay out of vending.

Update on the drinks:
As it turns out the drink situation is working just fine. Instead of buying 20 oz bottled Coke and Pepsi products from Vistar at 79¢ or 80¢ each, we are buying 16.9 oz Coke and 24 oz Pepsi bottles from Wal*Mart at 50¢ and 52¢ each. It's working great! The Coke drinkers don't mind the smaller bottle with a smaller price than 20 oz, and the Pepsi drinks like having more to drink, even at a little higher price than the 20 oz bottles.
It's really working great!

This will work out great until you start buying too much at one or more stores, or until you start trying to exercise your tax-exempt status at the checkout. The problem is, once they find out you are reselling, they will refuse to sell you any more drinks at any "volume" at all, and they will insist you go to Sam's or some other wholesaler. They will tell you it is against their agreements with Coke and Pepsi to sell to you in this manner.

I got away with this for a short time about 2 years ago, but eventually they caught on. Just as well anyway, because once you get to a certain volume, you won't have time to go from place to place buying soda.

I should explain some other reasons for leaving Vistar and going back to Sam's.

First, I am ALWAYS getting chips in with open seams. I'm not talking about an occasional bag here and there. It happens repeatedly with each delivery. At times, simultaneously among as many as 4 different brands. Frequently, as much as 50% or more of the bags are not sale-able of an affected brand. I just went through 3 boxes of a bad batch of Lay's Original in where there were little pinholes in most of the bags -- ants got inside some of the bags and I had some customers discover this, unfortunately. The worst offenders I have found so far: Andy Capp, Lays Original, Austin Zoo Animal Crackers, Snyder's Buffalo Wing Potato Chips (big holes punched through the bags).

I depend on once-a-week deliveries -- so if my entire delivery of one or more products is bad, it really puts me in a bind since I have to wait a week for an exchange to take place. Not good.

Second, Vistar is not cheap. When I get bad product from them that I don't get credit for, it makes them outrageously expensive.

Third, I have gotten bad pastry from them frequently. Some of it has been stale upon receipt (Freshley's Texas Cinnamon Rolls were the most disgusting pastries I have ever seen or tasted), and my Dolly Madison Zingers have occasionally molded between the cakes after just 2 to 3 weeks in some cases. Again, this creates more waste and makes their already high prices nothing short of outrageous.

Yes, Vistar does have a great selection, but that is all they have. My experience with Vistar is that they apparently charge a premium for second-rate or irregular product from the same suppliers that Sam's Club gets their product from, except when you buy it from Sam's Club, you can depend on getting great product with very little or no irregulars. Plus, they are much less expensive.

Good-bye Vistar.

anybody from california here? that raise the sodas to .75 cents...any inputs i really greatly apprecetiated..

Here's another thought... you really want to stay at or above a 50% gross margin. So in other words, if you're paying a unit cost of .35 for can soda, your price in your machines should be set at or above .70 -- this would be for factory locations or business locations. If you're in a retail-oriented location where there is a lot of walk-through traffic, you can probably get more, maybe .75 or better using the same cost example.

As for bottles, there is not as much profit. Don't sell them unless you have to. In my area, 1.25 is all I can sell them for and my cost is .75 for Pepsi products and .65 for Coke products. That's not very good margin at 1.25.

If you have to pay a commission, just add that on top of what you need to get.

bvi where are you located at? cause here at california the retail cost for coke and pepsi is .34 ea now so i think its time to go .75 ea now for coke and pepsi products.... do u guys put a notice if u guys gonna raise up your products? any inputs i really appreciated......sodas getting expensive....wow!!!!

California? That explains it. In a state run by democrats (despite having Schwartzenegger as governor... he is certainly no conservative), you have the worst taxes and regulations imaginable. Everything costs more because of it. No offense, but seriously - that's why your product cost is out the wazoo.

That's not to say that Sam's might not be raising their soda prices again, even in the mid-west where I'm located. But I don't think it in any way would be to as much as you're having to pay.

I have decided to go back to Sam's as well. The price differences are just too large to not go back. I like the vast selection Vistar offers, but I don't like having to buy $600 worth of stuff if I don't need $600 worth of stuff. Plus, I don't need to be giving up so much GP (gross profit) just to buy from them. When I buy some things at Sam's, then try to buy other things from Vistar, it just makes it more difficult to buy their minimums.

i know but not telling you haha sucker

Cokeman, don't be a jerk. If you can't be gracious enough to give an answer that you know, then don't post a smart-___ remark.

bhunso,

Yes, it is reasonable to sell @ $0.75. I have been doing it since April and I only shop at Sam's club. Of course, it would be a good idea to check other vending machines in your area to see how competitive you are being.

Sincerely,
~HooseFoose~

Your prices must be higher. My Sam's Club sells at a unit cost of .29 for Pepsi products (was .27) and still .26 for Coke products.

I sell cans at .60, which is what my competitors are selling for, and that is still just above 50% GP, which is what we all try to shoot for overall.

I need to order a couple rebuilt changers and validators. I was using Warren Money Systems, but they went out of business. Can anyone suggest a good place to order rebuilt changers and validators that will also rebuild the ones I have? I have found lots of places that do it, but I know that some are better than others.

Thanks

JD

I go through the company that Southern Equipment Sales goes through - Vendors Repair Service. Their rebuilts are in all of Southern Equipment's refurbed machines. I had to buy a rebuilt Coinco TRC60XX Series and it cost me $119.31 with freight. No problems. Their phone number is (800) 248-1712.

not knowing the changer model nor the machine model they are on.... i may suggest that a lot of the newer equipment requires a "tube fill"... check the manual on the equipment piece and it should show you how to do it... basically by going into machine mode and scrolling totube fill you then feed your change thru the "head of the changer" (not the tubes) until you get to the level you desire.. then exiting mode to standby/ready. from then on if everything is working properly it should refill to your prescribed level...

Jeremiah, if the quarters run out - or at least if they get low enough that the bill validator disables - then it would seem like the float sensor may be bad in the quarter tube. I had this problem recently, and it was a bad float sensor.

There are a lot of falsities in their information. Stay away from this. It is bizop.

BVI,
Have you ever taken an account that was getting a commission, but they decided to not take a commission and go with you?

I'm just getting frustrated with my area. So many prospective locations here have prices that are way too low. Some still have candy and pastry at .60 and this is a fairly large vendor with 4-5 people working for him!!!! Then I find accounts that have halfway reasonable prices that I could take over without too many price increases only to find that they are getting commissions (which is the only reason the prices are reasonable).

I only have one account right now that gets a commission (10% of gross sales).
JD

My largest account (you know which one) was getting a commission from their previous vendor, and the conversation started out that they were going to expect a commission from me. But they were having to send the commission to their main office - which is something he didn't want to do - so he decided to scrap the whole idea of receiving commission and wanted me to simply go a good job for them since the other company was so bad.

There are some good points to be made about paying commission, but the bottom line for me is that this is not the kind of business I want. If an account is stuck on the commission issue, they are interested in how much money they can get, and if another company comes along who is willing to offer them a higher percentage, then you are at risk of losing the account even if your service is good, and that's just not the kind of account I'm after, regardless of the size.

I don't disagree on service, but when you deal with large accounts, a commission is not only essential it is required. I have one account that gets $3000.00 per month guaranteed and more if revenues are up. I am working on a state contract right now that is a bid and requires a commission. On smaller accounts ($1500.00/mos or less by my definition) I would agree with you, but in todays world, there are a lot of companies that can provide good service and nice machines etc... I have had my "decision" makers leave and bring me with them, but I have also seen new decision makers come in and want to bring their cronies, so I see a commission which usually requires a contract as a major deterrent to other companies etc... In the end, though, good service as you suggest is the base of any good company.

Scott, I do understand that there are accounts out there that insist on receiving commissions. The difference with me is that I always turn them down. The moment I sense that they are hell-bent on this subject, the discussion is over where I'm concerned. I won't pay commission to anyone. There are plenty of great accounts out there that will bend over backwards to bring in a vendor who will simply do the basics and do it well. Those are the accounts I want. Vendors who do the commission thing can have all of the commissioned accounts as far as I'm concerned. These accounts, from what I have seen of them, are the least loyal and problematic. That is not the kind of business I want.

I'm just starting so I have an opinion but no experience. A larger site where the machine is for employees or a service they need I would shy away from it. I would certainly discuss it with them openly and do it if they want it, but I would offer to donate a few cases of pop for their summer picnic and winter holiday parties as an alternate or keep the prices a little lower than they would otherwise need. If you don't discuss commission with a large site somebody else might.

Small locations will never get a commission from me because they are - well small. Mechanics, etc. need to have something there in their waiting rooms to make their customers comfortable.

A site such as an apartment complex or a building where the manager leases the space to others (common space) I will always offer a commission because they have no incentive to let you use their power otherwise. I will explain it may only be $20 to $30 per month and see if they care.

One question: Those with experience in this what rate do you use? 10% is common, but is that gross sales or net (after product costs) sales? I'm guessing its net, but I would like to see what you have to say.

Don't ever be the one to bring up commission in a negotiation. If you bring it up, they will expect it. If you bring it up, you will lose.

If the prospect brings it up, explain the rationale for not paying a commission (keeping prices low, providing better equipment, more frequent service, etc...). Then stick to your guns. If they insist on a commission, I would kindly tell them you are not interested and then leave. Believe me when I tell you I have no problem telling any prospect I am not interested. Don't be so desperate to get a new account that you make a commitment that you later wish you had not entered into.

The misunderstanding here is that paying commissions will get you accounts and help you keep accounts. This is pure bunk. This is a relationship business. Providing great service is what will get you accounts and when others come knocking on their doors, it is what will keep your accounts. No amount of commission will keep an account for you if your service is mediocre or poor. You must understand this or you will create more work and expense for yourself than is necessary.

Is it worth giving a big location a commission? It always seems like such a huge pain, in addition to losing some of your profits for the site. I am loathe to do it, but Scottgtg was saying on another thread that if you don't give them a commission, then you are much more likely to lose the account. Is it worth it to "secure" the account?

Please add your thoughts on subject. I talking about locations over 100 employees.

Sincerely,

~HooseFoose~

Bottom line it's service, not commissions. If you provide great service and keep prices reasonable, commissions are irrelevant. It's all based on building a relationship with the account, and making sure the account is taken care of. That's what keeps your accounts intact. I have found that good accounts care more about great service than anything they might gain from receiving a commission.

I have had so many accounts tell me that they don't want a commission, just reasonable prices and good service for their employees.

Nowadays, I turn down any business that insists on a commission. I just won't do it. It's a pain and time waster, and if you don't provide good service anyway, the commission won't make any difference.

I think it is absolutely essential. I hate commissions, but most good locations will require it even if it means raising prices a little. There are exceptions, but if you are paying a commission on a timely basis etc... then you will earn a lot of good will and when the other vending companies come knocking you have a very solid leg up on them.

I differ a little bit here. Bottom line is service, not commissions. If you provide great service and keep prices reasonable, commissions are irrelevant. It's all based on building a relationship with the account, and making sure the account is taken care of. That's what keeps your accounts intact. I have found that good accounts care more about great service than anything they might gain from receiving a commission.

I have had so many accounts tell me that they don't want a commission, just reasonable prices and good service for their employees.

Nowadays, I turn down any business that insists on a commission. I just won't do it. It's a pain and time waster, and if you don't provide good service anyway, the commission won't make any difference.

BVI, Coinvestor,

Any other experienced operators out there? Please share what I should be expecting for gross numbers for these size of locations. I am interested in getting them setup, but I don't want to just go off general "Sales" numbers. I really need some numbers from people in biz. Thank you!

Sincerely,

~HooseFoose~

Kudos to Scottgt and Coinvestor. Well said.

As for me, since most of my locations are NOT within walking distance (but certainly within driving distance), fast food and convenience stores pull sales away from my primarily blue-collar locations to some extent, but they usually will still hit the $5 average per blue-collar worker most weeks. Sometimes they do much better than that.

The big disappointments for me are the two locations that I have that have a majority of gray-collar/white collar workers. These locations only generate between $1 to $2 per worker per week, and they are the first ones I will pull out of if I ever need those machines for larger, more profitable blue-collar locations.

Scott, I am assuming you are talking about your third party machines here?

Both Coke and Pepsi say that they will not do third party here anymore. I have heard the same from other vendors in my area so I don't think I'm getting the run around. They do still do "full service" and pay a commission, but I don't need to buy from them in order to do that, so I wonder if I should even start.

JD

That explains why their pricing is lower in your area. Since they don't provide full line vendors with any machines, they don't charge the premium price on their products. Makes sense.

hello I just wanna know any success with this item starbucks coffee 15oz? how much u guys sell? any response I really appreciated.thanks.

It sucks. Do not buy it. It will sit and sit and sit until you give it away.

I have yet to buy direct from either Coke or Pepsi yet. Neither of them offer 3rd party machines anymore in my area. The do still full service and pay commission. The prices that they gave me are very high. They are very unresponsive. They never answer the phone and may call you back in two to three days if you leave a message and your lucky.

The prices I got from pepsi and Coke are $1 a per case of cans higher than Sam's. I buy from two different Sam's and Vistar now, but even between the three of them I still can't get some of the stuff I need like Sprite Zero and Ginger Ale. This leaves me running around like crazy and I think I'm going to loose my mind.

With out having the third party benefits, is there any reason to buy direct from them (aside from the selection problem I have)? How big is the spread in your area between the bottlers price and your Sam's price?

Thanks

JD

Unfortunately, your local bottlers can either provide you with all sorts of motivation to either buy or not to buy from them.

Coke has pretty much matched my Sam's Club pricing, plus they deliver.

Pepsi is a little higher, but they deliver.

Since I have several 3rd party machines, I would be buying from them anyway, so I buy as much from them as I can which saves me time.

I know you have a unique situation due to the area you cover, but I'm wondering if the car dealer you service would rent you a small storage area where you could get the local bottlers in that area to deliver to? Sure, you'd have to go there to stock your truck, but you're probably going there nearly everyday (if not everyday) to service that account anyway. Might be worth asking about.

I have a number of machines, but I really like the AMS Sensits. They are easy to work on and very reliable. There are lots of them available through various distributors and refurbs are readily available. I also like AP 7600's with aftermarket guaranteed delivery systems.

The next time I am in a position to buy a new snack or combo machine, it will be AMS. They are innovative and have a very good reputation. GPL is also very good, but they are more expensive.

I prefer Royal soda machines, but it really is just a preference. Dixie and Vendo are probably just as good, but I have several Royal 3rd parties and have had very good luck with them.

DJPVending is exactly right. I don't know how many machines you service but if accountability software is not feasable at this point the following 2 checks and balances will keep you in tune daily with any issues on your route including machines giving product away free or at a reduced price. You will be able to tell if product and/or money is over or short. When you have other people handling your money, expedient and timely route accountability is essential and vigilance must be maintained.

1. Expected $ Inventory will tell you how much money is due for the product added to machine - You may want to setup a spreadsheet on your computer for each machine and set it up to calculate the quanity of product added at each price and the total for all products. Check this against your actual money turned in and this tell you if you have product "shrinkage" and the over/short for each machine. Machine must always be filled to the same product par and changer pars kept to same level. Gum may be the exception to the rule if you don't want to fill until you can use a whole 20 pack and must be either counted and recorded as an ending inventory or taken into consideration. Always record stales, waste, refunds and giveaways.

2. Expected $ Meter Reading will tell you how much money is due that was fed through machine- Of course, by using the nonresettable meter readings, this will inform you how much money has been through the machine and appx. the amount that should arrive to your office. If you don't receive it , you may have problems, but drivers will sometimes forget to pull bills, so you may have to wait until the next service/collect date to see if it returns or go check yourself.

3. Truck Inventory - Weekly or Monthly, your preference, but I generally prefer weekly. Load sheet from warehouse to route truck with all products recorded that was put on truck. You can then match the weekly truck inventory with product loaded on truck, product added to machines and waste to account for all product. Use the same system for warehouse inventory recording the product in and out, just to make sure there is no shrinkage there either as you just never know.

4. Visit accounts, check machines for cleaned, filled, working, and talk to your contact person there no less than once a month. Get there at break or lunch and you can find out a lot from the people in the breakroom about their opinions on the driver and/or your machines in general.
Communicate. Communicate. Communicate.

As was previously stated, once you have a procedure in place you can always go to the machines count them down and check the money in them when you have a discrepency or suspect a problem.

Sorry for such a long post but for the past 20 years route accountability has been a task or "passion" of my daily life . As your company grows, so does all the other issues that will arise.

Wow, Midtenn. Great post my friend! Like Jeremiah, I've had that same question on my mind.

I run close to 50 machines by myself with no planned employee additions until I install at least one more anchor account -- mainly, someone assisting me on the route two days per week.

Since it's just me, I haven't implemented any of the practices you've mentioned above. But I can see their value in controlling shrinkage when "employees" are added into the equation.

Coming from a sales background, I generally have frowned on added paperwork or "busywork" because it cut into my productivity.

So - the ideas presented here - how much added time does it take to manage the paperwork... on the part of the service rep? At my current workload, I can't imagine having to stop and fill out worksheets. And, I used to single-bag collect each machine with the paper slip... but I stopped doing that because the counting and accounting processes took too much time.

I'm suspecting that these processes might not be so time-consuming when the workload is divided up between more employees. I assume the added value of performing these activities is greater than the cost of the extra time it takes for the employee(s) to complete those tasks, but would like someone to confirm that.

A competitor of mine says he never has loose cans. He stacks his exras in a different column with the tabs facing the opposite direction so he can change this on his next service date. I tried it a few times but I hedge my bets by making sure I don't put in more than the sold out quantity. ie if your machine is three deep and has 7 cans left when it registers sold out then don't put ion more than 7.

I started doing this about a month ago because I got tired of having loose cans in my truck. It works out well. I just put my extras in the next column... on the next service call, I always see the cans that were extra and put them in the correct column. I always have more per selection than will ever run out, so it's okay... no need to worry about someone getting something they didn't intend to buy.