10 replies to this topic

[coinvestor]

What do you guys think is the best way to raise prices? One item at a time and hoope nobody says anything? Send out a notification (letter or e-mail)? I have switched brands for certain items and raised prices at the same time which seemed to work well, but I have kind of settled on the brands that I want to use. Any thoughts?

Jeremiah

[clvending]

If you raise prices and your sales decrease, then I would change your prices back. If you raise prices slowly and sales remain steady, then it would be safe to assume that your location is not offended by the price increase.

Let us know how it turns out.

Lee

[tedk]

Jeremiah:

What I have done in the past is tell my contact person that I will be raising the prices next week (or two weeks) and explain that it is do to increases in the price of the product. I then print a letter to that effect and post it on the machine and give a weeks notice at least. I try to tell everyone I see a tell them I am sorry that "I Have" to raise the price and that I will be in on such and such a day, so if they want to get something that day get it before I get in. When I get there I tell anyone who is near by "Last chance to get it at the old price" and then I make the change.

Here is a sample of some text we have used in the past:

Jan. 25th, 2006

Due to the increase in product costs, we must, unfortunately raise the price of our snack products to you.

We have resisted raising our prices, but can no longer maintain the status quo.

Effective February 1st the price of snack products will be $1.25 each.

Pop and chip prices will not change at this time. They will remain at the current $1.00 price.

We wish to thank you for your valued support.

Regards,

Ted Kennedy


Hope this helps,

Ted

[kevin]

Jeremiah:

What I have done in the past is tell my contact person that I will be raising the prices next week (or two weeks) and explain that it is do to increases in the price of the product. I then print a letter to that effect and post it on the machine and give a weeks notice at least. I try to tell everyone I see a tell them I am sorry that "I Have" to raise the price and that I will be in on such and such a day, so if they want to get something that day get it before I get in. When I get there I tell anyone who is near by "Last chance to get it at the old price" and then I make the change.

Here is a sample of some text we have used in the past:

Jan. 25th, 2006

Due to the increase in product costs, we must, unfortunately raise the price of our snack products to you.

We have resisted raising our prices, but can no longer maintain the status quo.

Effective February 1st the price of snack products will be $1.25 each.

Pop and chip prices will not change at this time. They will remain at the current $1.00 price.

We wish to thank you for your valued support.

Regards,

Ted Kennedy
Hope this helps,

Ted

Alot higher prices then mine, are those accurate? What is everyones Base price these days? The economy where I am everything is alot cheaper so my prices must reflect that.

Bottles: 80-1.00
Cans: 50-60
Chips(LSS): 75
Candy: 60-75
Cookies: 65
Pastries: 80-1.00
Energy Drinks: 2.00

[tedk]

Alot higher prices then mine, are those accurate? What is everyones Base price these days? The economy where I am everything is alot cheaper so my prices must reflect that.

Bottles: 80-1.00
Cans: 50-60
Chips(LSS): 75
Candy: 60-75
Cookies: 65
Pastries: 80-1.00
Energy Drinks: 2.00

I'm in Canada so prices are a little different. I try to base my prices on what a convenience store or a coffee truck usually charge.

Ted

[kevin]

I'm in Canada so prices are a little different. I try to base my prices on what a convenience store or a coffee truck usually charge.

Ted

My prices are alot lower then the convient stores. I usually save people around 30 cents a btl, before tax(included in my price). Yet people still act like I am ripping them off, the only real downfall of this business.

[BVI]

My prices are alot lower then the convient stores. I usually save people around 30 cents a btl, before tax(included in my price). Yet people still act like I am ripping them off, the only real downfall of this business.

Isn't that the truth!! Try charging $1.25 for CSD bottles, which is still less than what they would pay in convenience stores, and watch them curse you!! This is something I can't figure out and is one of the reasons why I won't stock CSD bottles unless I absolutely have to.

I think the WORST way to raise prices is to try to raise a few items thinking no one will notice. They will. Some will fuss and stop buying temporarily in protest. Some won't say anything, they just keep buying. Some won't say anything, but won't buy as much as they used to.

I think the best way to go about it is to review prices twice a year with all accounts (with your contact persons). Like June and December or whatever you think makes sense. Having that conversation first and then putting a price increase notice on the machines second I think makes the most sense. I haven't done it that way yet (I am learning from mistakes), but in December, I will.

[tedk]

My prices are alot lower then the convient stores. I usually save people around 30 cents a btl, before tax(included in my price). Yet people still act like I am ripping them off, the only real downfall of this business.

The price objection is probably the most common objection you will run into as a salesperson. (In business everyone no matter what position they hold is a sales person) The biggest mistake people new to business or to sales, makes is to over-react to the price objection. In reality this and the locating rejection are very similar problems and they have to be handled in a similar fashion. You have to know that it is coming, every day and be prepared. Just as you have read many excellent posts about preparing a script for locating, anticipating objections, having well thought out answers and practising the pitch, you have to do the same to overcome the price objection.

Bear in mind we all complain about prices. Most of the people complaining are just giving you the gears. They really don't expect you to change prices. But do your homework. Look at everyones vending machine prices. Check convenience stores, coffee trucks, theatres, sporting events and trot out THE FACTS to people.
You provide a valuable service at a fair price. Do not be ashamed or contrite about your price. You have a lot of costs that are not obvious to your customers. Insurance, gas repairs to your vehicle, accountants, repairs to machines, spoiled product, people ripping you off by tampering with your machines and YOU ARE ENTITLED TO A FAIR PROFIT. Don't apologize for charging a fair price. Seven Eleven stay in business because they make money by charging fair prices for what they sell not by trying to beat everyone else's price.

I personally don't like the idea of being 30 cents below the rest. The easiest thing to do when you are not confident of your facts and your sales skills is to drop the price. As you you can see from this thread the hard thing is to raise prices. Lowering prices (or starting to low) is a last resort NOT a first or only option. It is what in-experienced operators and sales people do and it makes it hard on everyone that wants to stay in a business and succeed. I never want to be the first to drop a price. In fact I try to look at it as a challenge to maintain the price in the face of someone who is trying to lower it because that is part of my practice. The more you do it, like locating, the easier it becomes.

Confidence doesn't always come easily but as you develop it, things that seemed hard become easier.

Please forgive the length of this post and if I sound preachy I don't mean to. You won't sneak price increases by people. You will get objections all the time so do your homework, practice your replies and you will find it much easier.

Ted

[coinvestor]

Ted,
In light of this post help me out here. Like I said in the Car Dealership post I need to get back with them tomorrow.

The current prices are:
Crackers: .30
Chips: .40
Large chips .65
chocolate .65
Pasteries .65
Can Drinks .50

The way I see it I have four choices:

1) Take the account and leave all prices the same - I would loose my shirt so this is not an option.

2) Take the account raise all prices .10 - .15 cents to were they should be - The GM is okay with this, but he is probably only an occasional customer. It’s the shop guys and others that I would have to pitch my prices to over and over. I like to make a marked improvement when I take over an account not come in under a cloud of "rip-off prices".

3)Take the account raise all prices .05 - .10 cents - basically under sell myself.

4) Not take the account because I can't compete with the low pricing - This was my original reaction, but I started rethinking after I saw what Kevin was pulling from his machines although I'm never that lucky.

What do you think?

Jeremiah

PS - I would much rather have the "price hagglers" then the "give me something free" people. What’s the deal with them anyway? I don't ask them for part of their paycheck why the heck do they want mine.

[tedk]

Ted,
In light of this post help me out here. Like I said in the Car Dealership post I need to get back with them tomorrow.

The current prices are:
Crackers: .30
Chips: .40
Large chips .65
chocolate .65
Pasteries .65
Can Drinks .50

The way I see it I have four choices:

1) Take the account and leave all prices the same - I would loose my shirt so this is not an option.

2) Take the account raise all prices .10 - .15 cents to were they should be - The GM is okay with this, but he is probably only an occasional customer. It’s the shop guys and others that I would have to pitch my prices to over and over. I like to make a marked improvement when I take over an account not come in under a cloud of "rip-off prices".

3)Take the account raise all prices .05 - .10 cents - basically under sell myself.

4) Not take the account because I can't compete with the low pricing - This was my original reaction, but I started rethinking after I saw what Kevin was pulling from his machines although I'm never that lucky.

What do you think?

Jeremiah

PS - I would much rather have the "price hagglers" then the "give me something free" people. What’s the deal with them anyway? I don't ask them for part of their paycheck why the heck do they want mine.

Do you have a machine sitting idle to put in here or do you have to buy one? If you have one I would put it in raise the prices to the appropriate level, and be ready to explain why. A working machine is better than one that is idle.

From the sound of your note they have someone else in there that you are replacing. Do you know why? If not find out. It could be your perfect come back. If the fellows service isn't good which I assume it isn't, you explain to them he couldn't probably couldn't afford to service his accounts becauses his prices were too low. The prices I have put in are in line with "insert the findings of your research here" Then you can say "Think about how much you have to pay at the show for a bag of " insert research data"
What you will be getting from me is great service, great selection, fresh product and clean machines because I will be here for you.

As for the give me something free guys they are also giving you the gears for the most part. Most of them don't really think you will but they ask just in case.
If you need a come back for them yours was pretty good. "I don't ask for part of your pay check."

You can modify it. " How about giving me your wrench?"
If you want to be more serious you can say " I know it doesn't seem like much but for every item I gave away I would have to sell 2 (3) just to pay for the one I'm giving away. I'd never get it all back with all the guys who ask."
Or " I'ts like all the guys who ask me to beer in the machine. I'd love to but I can't."
Or " As much as I'd like to, if I do it for your there are 50 more guys in here that will want it too. Multiply that by the number of machines I have and I'll be broke in a week. My kids will starve and it's all because of you. Then you'd feel bad and I wouldn't want that."

Good luck,

Ted

[marks_vending]

I change all the prices at once, never one at a time. And even if sales slow down the first few weeks, they will eventually pick back up. Do NOT change prices back down, because then in the future if you want to raise them because of product price increase or whatever, the customers will be waiting for price to drop again