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New to this have a few question for the Pros!


ColbyB24

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Hi guys I am new to vending but have read several books and the entire thread for beginners on this forum as well as several other forum topics on here and I have a few questions?

1) First of all what is everyone's opinion on the future of vending? I have ran into several videos/posts like this one....

basically saying vending as we know it is dead, that people are not carrying around cash anymore and if you buy into vending you are basically buying into a dying industry?

2) About a month ago I purchased a used lot of 12 triple 1800 vend machines to start out with reading through forums I decided these would be good to start off with. I have placed 4 of them already 3 of them made between 20-28$ in a month and one made 14$. What is a good number I should shoot for so I know when I need to pull a machine and replace it?

3) As of now I am placing these myself which is very time consuming especially because I have another company that is my fulltime job, can anyone recommend a placement agency that way I can get all of these placed as quick as possible?

4) I thought about paining some of these a bright color like a lime green or yellow so they stick out is that a good idea or should I leave them alone (they are hunter green)?

5) Right now I have my 4 machines dispensing candy and gumballs (Peanut MM, Skittles, Gumballs) should I trade one of these for 1" toys or all 3 for toys even? Toys vs Candy I have read the forums but it didnt really settle the debate.

6) Most importantly....How do you guys avoid eating all your profits haha its so hard not to!

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Disclaimer-I am not a pro, but i have been reading the boards for a couple years

ABOUT  that video...

that guy is an idiot

also, if you have a pessimistic crap attitude like that guy you wont succeed

actually there was a thread on here once on that video, we bashed the crap out of him

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Hi guys I am new to vending but have read several books and the entire thread for beginners on this forum as well as several other forum topics on here and I have a few questions?

1) First of all what is everyone's opinion on the future of vending? I have ran into several videos/posts like this one....

basically saying vending as we know it is dead, that people are not carrying around cash anymore and if you buy into vending you are basically buying into a dying industry?

2) About a month ago I purchased a used lot of 12 triple 1800 vend machines to start out with reading through forums I decided these would be good to start off with. I have placed 4 of them already 3 of them made between 20-28$ in a month and one made 14$. What is a good number I should shoot for so I know when I need to pull a machine and replace it?

3) As of now I am placing these myself which is very time consuming especially because I have another company that is my fulltime job, can anyone recommend a placement agency that way I can get all of these placed as quick as possible?

4) I thought about paining some of these a bright color like a lime green or yellow so they stick out is that a good idea or should I leave them alone (they are hunter green)?

5) Right now I have my 4 machines dispensing candy and gumballs (Peanut MM, Skittles, Gumballs) should I trade one of these for 1" toys or all 3 for toys even? Toys vs Candy I have read the forums but it didnt really settle the debate.

6) Most importantly....How do you guys avoid eating all your profits haha its so hard not to!

 

On the placement, yes! Visit our site, or you can pm me on here. Locating can be tedious work! We can have locations found for you with in about a week or so. If you look in the Feedback section you'll see our feedback from customers and our add in the classifieds. 

 

Ok, now time for the machine questions. Here's my take on it...... First, don't paint those machines unless they are in bad shape. They have a command presence about them with the color scheme and especially the gold trim. I don't re paint anything unless I need it a certain color for a chain of restaurants or it's in really bad shape.

 

As for candy, toys, or other...... For me it depends on the location! Start with what you have, I know P mm's are a huge debate, but I use them and in the set up you have, I personally would use pmm, mike and Ike or skittles, and gumballs. I would keep extra wheels for both candy and gum or toy. The toys if I'm correct would have to be a round capsule not acorn so it's specialty. 

The gumballs will help offset the cost of pmm, and the others will be in the middle. Candy is used less by commission operators because after you pay commission there isn't much left for profit. 

If your doing charity machines and using a good charity, then sell what sells the fastest as long as your cost of goods are in check.

 

On the question of vending, it's not dead in the least bit. Toys just now went to .50. Candy will follow main stream in about 5-10 years my guess in charity machines, maybe longer. 

There will always be a way to adapt. I run my route twice a month and take home about what I do in a full week at another job that I do. Even IF it started getting to where you couldn't do it any more, you could make plenty to use in another avenue. 

There are lots of full time guys that do this for a living. If they thought it was on the way out, they would start selling now and get into full size or other products.

 

Let me know if you need anything.

Paging Rodney! Good questions Colby, I'll try and respond with some of my thoughts tomorrow or Fri.

Oh Rick! LOL! Thank you!

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1800 triples can be good machines to start with. I started with a Vendstar, then got about a dozen 1800 triples, then moved on to racks and doubles. I still have most of my 1800 machines and they continue to make steady income. I would recommend two heads of toys and one head of gumballs. I switched all of my 1800 triples to 50 cent coin mechs across the board. 50 cents for 1" capsule toys and 50 cents for Nerds gumballs. I sell a TON of Nerds gumballs at 50 cents. I first tried pricing Nerds gumballs at 50 cents in two locations and the results were so good I did it at all my gumball locations. Very happy to say it was a good move.

 

Vending acorn capsule toys in 1800 triples is not as straightforward as it is in a regular Northwester, Beaver, Oak, etc. machine. I can PM you instructions on how to setup the machine to vend capsules without misvends. If you need to buy 50 cent coin mechs, you also need to be aware of Buzz Bite coin mechanisms. They will cause misvends if installed in a 1800 triple. You have to swap the pinion gear off a 1800 coin mech onto the Buzz Bite mech to make them work correctly. Otherwise the engagement point of the pinion gear on the ring gear of the product head is wrong and causes the product wheel to rotate at the wrong rate. About 1 in three vends will have the product wheel misaligned with the chute and cause a misvend. You also need to remove the wheel riser and the larger of the two springs above the chute. The springs put too much tension on the coin mech and can cause the plastic ring gear to strip out.

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As for the viability of bulk vending, I agree with Rodney. Bulk is not dead (yet). I think in ten years it will either be dead or look completely different from what we know now. At some point, a move away from coin operated machines will have to happen. People just don't carry a lot of coins anymore. Heck a lot of people don't even carry any form of cash with them most of the time. More and more we're transitioning to a cashless society and bulk vending will have to adapt to that or die. The big challenge will be making machines with the necessary electronics to handle cashless transactions at a price that bulk vendors can still make money. Imagine if a single head cost $250 or more; how long would it take to achieve ROI on such a machine? What if you wanted to put together a rack with 8 heads at $250 each? Insane. I think bulk vending will have to become more like snack machines; multiple product categories with only one payment interface and you push a button for the product you want.

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Shepards that's something I'm worried about because I'm 27 years old and about six months ago I was at a bowling alley with my little brother and my friends and their kids (4 kids total) and the kids wanted gumballs and toys and bouncing balls etc but between the 6 of us adults not one of us had a single quarter so I think about that guys machines how many sales has he lost so far because the people dont carry cash anymore? Personally I never carry coins and very little cash because I'm a business owner and my American Express Business tracks and catogorizes all my purchases so much easier for tax purposes.

Admittidly I'm confused because bulk vending is time tested and it's still around and people are still making money but with any business it's important to look into the future and I think there won't be a lot of people carrying coins so that means to survive bulk vendors will have to adapt before it's too late.

I've seen debit machines on the bigger machines do you think that will ever be a viable solution for small machines I mean I think I would purchase 50cents or $1 worth of candy on my card no big deal but would most people do it and could they make the machines cheap enough to be profitable? Do these machines exist yet for candy vending?

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1800 triples can be good machines to start with. I started with a Vendstar, then got about a dozen 1800 triples, then moved on to racks and doubles. I still have most of my 1800 machines and they continue to make steady income. I would recommend two heads of toys and one head of gumballs. I switched all of my 1800 triples to 50 cent coin mechs across the board. 50 cents for 1" capsule toys and 50 cents for Nerds gumballs. I sell a TON of Nerds gumballs at 50 cents. I first tried pricing Nerds gumballs at 50 cents in two locations and the results were so good I did it at all my gumball locations. Very happy to say it was a good move.

 

Vending acorn capsule toys in 1800 triples is not as straightforward as it is in a regular Northwester, Beaver, Oak, etc. machine. I can PM you instructions on how to setup the machine to vend capsules without misvends. If you need to buy 50 cent coin mechs, you also need to be aware of Buzz Bite coin mechanisms. They will cause misvends if installed in a 1800 triple. You have to swap the pinion gear off a 1800 coin mech onto the Buzz Bite mech to make them work correctly. Otherwise the engagement point of the pinion gear on the ring gear of the product head is wrong and causes the product wheel to rotate at the wrong rate. About 1 in three vends will have the product wheel misaligned with the chute and cause a misvend. You also need to remove the wheel riser and the larger of the two springs above the chute. The springs put too much tension on the coin mech and can cause the plastic ring gear to strip out.

On the Nerds at .50, Is that also places that you have competition? Like if you sell nerds at .50, do you have others that sell regular gumballs at .25? Or is that stand alone without competition?

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I only have one place where I have competition and that guy doesn't sell gumballs. I do, however, have a laundromat where I sell both Nerds at .50 and Dubble Bubble at .25. They both sell well. I would say I sell just a little bit more (in dollars) of the Nerds at that location than the Dubble Bubble, but it's pretty close to being 50/50. I sell a larger quantity of Dubble Bubble, but the dollars are nearly the same. And my cost of goods is very close to the same on both. Nerds comes out to around 13% and Dubble Bubble is around 11% I think.

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I only have one place where I have competition and that guy doesn't sell gumballs. I do, however, have a laundromat where I sell both Nerds at .50 and Dubble Bubble at .25. They both sell well. I would say I sell just a little bit more (in dollars) of the Nerds at that location than the Dubble Bubble, but it's pretty close to being 50/50. I sell a larger quantity of Dubble Bubble, but the dollars are nearly the same. And my cost of goods is very close to the same on both. Nerds comes out to around 13% and Dubble Bubble is around 11% I think.

Is that the same amount of turns? Or money

Never mind, I see you covered it. On needs you works sabre more because of shipping and so on it looks like.

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The quarter is a extremely popular method of payment. I trade customers especially at restaurants 2 to 3 g's worth of quarters a month. Cash is still King. Even with a shift in technology it wouldn't deter me into getting into vending.

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The guy in the video is a moron IMO. Learn to locate for your self. I'm not trying to take away from Rodney. If I used a paid locator it would be him. Out of all the locators I have seen here he seems to be the only stand up guy we have seen.

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When the video started I thought.. yep I agree with what this guy is saying... (3:45) he said a snack machine would cost 1,000 and gross 5 bucks a month!!  haha  I turned it off immediately! 

 

Here is what I think about candy vending based on my experiences (more than a decade vending full time). 

 

in 2003 we had about 1,500 three head candy machines, and a bunch of doubles (over 4500 heads) on location.  We were happy with where we were, and the short amount of time that it took to get there..  Conventional wisdom would suggest we keep up the momentum with candy, but every year we do an industry analysis.  we project out 3,5,and 10 years.  In 2003 we decided to stop growing our candy business...  (in 2004 we decided to stop growing bulk toys.) 

 

Here is why:

Profits = Revenue - Costs.... 

 

On the Revenue side we projected a gradual decline in comp sales due to competition and a shift towards healthy alternatives..  We were also stuck at .25 / vend, and .50 vend trials were not successful, and were relatively expensive to convert.   

 

On the cost side, gas was on the rise..  (service costs were increasing), and candy prices were increasing at a faster rate than cpi. 

 

Costs were going up and we were stuck...  we could not cut back vend size, nor could we extend our already efficient service cycles.  At that point we realized that bulk candy vending was not a viable option for the long term. 

 

Why?

 

Look at a few metrics...

ROI = incredible.. less than 1 year on average!!  hard to find an industry that can compete with that.

ROT = bad..  long hours to collect several hundred dollars due to shelf life of candy forcing short service cycles.

**Lifetime value of an account** = LOW and unpredictable

**Cost to acquire account** = incredibly low!!   

 

Most people make the mistake of only focusing on ROI.  Lifetime value of an account and cost to acquire accounts are equally important.  ROT is the least important, but still important when thinking about scaling your business. 

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We run amusement..  we still have a some candy left, but we have not paced a machine in over 10 years.  we have bulk toys too, but have not purchased any in 10 years. 

 

Please note:

 

I am not saying bulk candy vending is dead, nor is it dying..  What I was suggesting is that profits were heading down, and we could not find a solution to the problem. 

 

Candy vending is a great business for a person that has limited funds to invest, wants a great return, and does not mind working really hard.   Just realize that your machines will not have a long lifetime value...  they will be vandalized, stolen, or a corporate manager will come through and kick you out of breakrooms etc. 

 

Definitely a great way to get your feet wet in this business to see if you have what it takes.   

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We run amusement..  we still have a some candy left, but we have not paced a machine in over 10 years.  we have bulk toys too, but have not purchased any in 10 years. 

 

Please note:

 

I am not saying bulk candy vending is dead, nor is it dying..  What I was suggesting is that profits were heading down, and we could not find a solution to the problem. 

 

Candy vending is a great business for a person that has limited funds to invest, wants a great return, and does not mind working really hard.   Just realize that your machines will not have a long lifetime value...  they will be vandalized, stolen, or a corporate manager will come through and kick you out of breakrooms etc. 

 

Definitely a great way to get your feet wet in this business to see if you have what it takes.   

 

I didn't think that, I was just curious of what you moved into. Bulk will probably always be there, but vendor will have to go to a CC pay system that is connected to solenoids and servo's to operate the equipment. We actually have one setup in a extremely busy and large grocery store in Salem, OR. I used to live in Salem years ago and it has 2 10 ways sided by side with a cc and bill validater in the middle, you just push a button and a toy falls out of the head you chose. No handles.

That's where bulk will go, but I also know that some day I will head up from bulk, maybe pay someone to run that after it's built up so I can build another line.

My interest in the building itself. I get my thrill when I open machines and see more than expected, but even more so when I close a deal, or when actually building a business. 

After I have a business I get bored if I'm not challenged, so I know that I will move forward and start another when I am bored. That's why when I hear of someone moving in slightly different direction, I like to see where to see what triggers me!

It may be full size in the future? Who knows?! LOL! It will be some time down the road though.

Right now my hands are full with the locating, our bulk route, and another job that I manage.

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When the video started I thought.. yep I agree with what this guy is saying... (3:45) he said a snack machine would cost 1,000 and gross 5 bucks a month!! haha I turned it off immediately!

Here is what I think about candy vending based on my experiences (more than a decade vending full time).

in 2003 we had about 1,500 three head candy machines, and a bunch of doubles (over 4500 heads) on location. We were happy with where we were, and the short amount of time that it took to get there.. Conventional wisdom would suggest we keep up the momentum with candy, but every year we do an industry analysis. we project out 3,5,and 10 years. In 2003 we decided to stop growing our candy business... (in 2004 we decided to stop growing bulk toys.)

Here is why:

Profits = Revenue - Costs....

On the Revenue side we projected a gradual decline in comp sales due to competition and a shift towards healthy alternatives.. We were also stuck at .25 / vend, and .50 vend trials were not successful, and were relatively expensive to convert.

On the cost side, gas was on the rise.. (service costs were increasing), and candy prices were increasing at a faster rate than cpi.

Costs were going up and we were stuck... we could not cut back vend size, nor could we extend our already efficient service cycles. At that point we realized that bulk candy vending was not a viable option for the long term.

Why?

Look at a few metrics...

ROI = incredible.. less than 1 year on average!! hard to find an industry that can compete with that.

ROT = bad.. long hours to collect several hundred dollars due to shelf life of candy forcing short service cycles.

**Lifetime value of an account** = LOW and unpredictable

**Cost to acquire account** = incredibly low!!

Most people make the mistake of only focusing on ROI. Lifetime value of an account and cost to acquire accounts are equally important. ROT is the least important, but still important when thinking about scaling your business.

I keep hearing you say that ugly five letter word CANDY. Yes, candy would be extremely difficult to make it on. I too have been full time for 10 years. We have also made adjustments with the times by offering a wide variety of machines/choices and higher price points. Why didn't you sell gum? Flat? One inch at .50? Ect. I'm just curious because because 90% of your research and or data is concerning candy. One other thing the whole health kick product is extremely trendy. I know of a route of healthy snack machines I can buy at a steal. Know the guy personally and his accounts are in high traffic areas. Maybe it's because I live in the south and the majority of the population is obese!!ha

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He mentioned the trial at .50 wasn't successful, but gum is even going for .50 for nerds in some places! I'm going to try a couple places soon with 1430 ct gumballs at .25. Just because! LOL

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I keep hearing you say that ugly five letter word CANDY. Yes, candy would be extremely difficult to make it on. I too have been full time for 10 years. We have also made adjustments with the times by offering a wide variety of machines/choices and higher price points. Why didn't you sell gum? Flat? One inch at .50? Ect. I'm just curious because because 90% of your research and or data is concerning candy. One other thing the whole health kick product is extremely trendy. I know of a route of healthy snack machines I can buy at a steal. Know the guy personally and his accounts are in high traffic areas. Maybe it's because I live in the south and the majority of the population is obese!!ha

 

Good points, LandJ.  There is a larger bulk vending spectrum out there.  But many only want to discuss the five letter word - CANDY.  On one end there is the rack vendor and at the other extreme end is the single head gumball vendor.  This board has a number of successful vendors at each end of the vending spectrum, albeit in a much more challenging economy today.  It seems like the vending models in the "middle' seem to struggle or fail more often.  And the multi-selection bulk candy model is in that "middle" area.  Historically, the multi-selection bulk candy model has not done well and most vendors with that model have failed.  There are really no big success stories on this board of (bulk) CANDY-ONLY models.  Of course there may be a few exceptions as nothing is absolute.  But if only one out of fifty succeed at something, then that is a model I would stay away from.

 

So to stay on topic, the author is only focusing on one area of the vending spectrum - multi-selection bulk candy vending.  Had he tried the single head gumball model, he may have sung a different tune.  (I will try to think of one if you wish!  No, maybe not!)

 

IMHO, Biz-ops have made a fortune by positioning these multi-selection bulk candy machines as miniature snack machines at a "fraction" of the cost of a conventional snack machine.  And these so-called miniature snack machines will be just a popular as the conventional ones (of course at a "fraction " of the cost) - or that is what the Biz-ops want you to believe.  Now I am not a full line guy, but I assume that multi-selection candy vending performs well in a conventional snack machine (since big snack machines have been around for many many years - full line snack guy can chime in if I am wrong).  But the same concept does not seem to work as well in the bulk world.  So for me, my charity model is at most one and only one candy - plus gumballs!  Or maybe just gumballs!  But no multi-candy selections any more for this guy.

 

And yea LandJ, my dad is from the south and they all love those all-you-can-eat buffets!  Man, those buffets are all over the place in Fayetteville, NC!

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He mentioned the trial at .50 wasn't successful, but gum is even going for .50 for nerds in some places! I'm going to try a couple places soon with 1430 ct gumballs at .25. Just because! LOL

Yes candy doesn't sell well at .50, but one inch toys do. Like you said guys are getting .50 for nerds gum. Gotta maximize profits with price point upgrades.

Good points, LandJ. There is a larger bulk vending spectrum out there. But many only want to discuss the five letter word - CANDY. On one end there is the rack vendor and at the other extreme end is the single head gumball vendor. This board has a number of successful vendors at each end of the vending spectrum, albeit in a much more challenging economy today. It seems like the vending models in the "middle' seem to struggle or fail more often. And the multi-selection candy model is in that "middle" area. Historically, the multi-selection candy model has not done well and most vendors with that model have failed. There are really no big success stories on this board of CANDY-ONLY models. Of course there may be a few exceptions as nothing is absolute. But if only one out of fifty succeed at something, then that is a model I would stay away from.

IMHO, Biz-ops have made a fortune by positioning these multi-selection candy machines as miniature snack machines at a "fraction" of the cost of a conventional snack machine. And these so-called miniature snack machines will be just a popular as the conventional ones (of course at a "fraction " of the cost) - or that is what the Biz-ops want you to believe. Now I am not a full line guy, but I assume that multi-selection candy vending performs well in a conventional snack machine (since big snack machines have been around for many many years - full line snack guy can chime in if I am wrong). But the same concept does not seem to work as well in the bulk world. So for me, my charity model is at most one and only one candy - plus gumballs! Or maybe just gumballs! But no multi-candy selections any more for this guy.

And yea LandJ, my dad is from the south and they all love those all-you-can-eat buffets! Man, those buffets are all over the place in Fayetteville, NC!

Jax, you hit it on the head my friend.

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