A glimpse into the life of a Charity Vendor

[ButlersVending]

 

A glimpse into the life of a Charity Vendor

Charity Vending is frequently the beginning step toward Commission Vending. At first the entrepreneur is lured into vending by a slick Biz-Op salesman. Inevitably, the Biz-Op guy gets the newbie to consider the following: the price of their typically overpriced vender, the price of the gumballs ... usually 850 Count, as they are readily available at Sam's Club for $17.38/case locally. Then they try steering the newbies to their own in-house Charity, or else they have a list of Charities ... quoting just how little that the new Operator will have to shell out to the Charity and to Sam's Club.

The beginner usually doesn't know national averages and when the Biz-Op guy says something like "If you just do 2 sales per day, this is what you can make with just 10 machines; and just imagine if you place your machines in locations that do 5 or 6 daily ... why shucks, in no time you'll be making your deliveries in a Cadillac Escalade!" The beginner begins to take real interest. In  short time he's plunking down the money for those ten machines. 

After a short time, the beginner gets his machines and the cases of 850 gumballs, for which the Biz-Op guy charged him just $32.50/case, plus S&H ... which brought the gumballs to about 4 Cents each! The machines are "pretty" at first, and they're set to vend one 850 Count Gumball for a Quarter. This newbie was sharp, he wanted to be "convincing" in representing his Charity ... he passed up the Charity hat, but bought the Charity T-Shirt, and a stack of Charity introduction letters to pass out to his new locations. Now he heads out to "sign 'em up".

Initially, and thereafter, he finds that it isn't as easy as the Biz-Op golden tongue salesman promised, but this new Operator had determination ... a key element of all successful Operators. He gets a location. The location owner isn't totally convinced, but for the time being, he allows the newbie to place his machine. After a week of steady pushing it, the newbie gets a total of 9 locations ... he's actually done well getting those locations, and within that time ... especially for a beginner.

After placing those machines, he goes about earning a living the way he had previously done in order to keep the bills paid. A month later he goes to those locations, and milks his machines. He's taken his 10th machine with himself, filled and ready to locate, but he remembers his mentor had told him not to become involved with those locations and to go in quickly, swap out the machine, and get out .... because if he hung around, the location would have time to ask him too many questions about the Charity, and may even ask for a percentage, or at least he may be expected to buy something. So he darts in, swaps out the machine, and darts out.

Between locations, he preps the previous machine to be swapped out with the next location. After he has done this with all nine locations, he counts his loot. He has $76.73, including several Pennies, a token, and a Canadian Quarter. This wasn't nearly as much as the Biz-Op man had left him hoping to have, but it's what was in the machines, and it did average between 1 to 2 sales per day, per machine ... almost exactly 1.1 sales per machine per day. He figures his overhead: Fuel @ $12.50, a meal out @ $10.75 ... including a Dollar tip, and 305 Gumball sales, if you don't count the Canadian Quarter, @ 4¢ each = $12.20; all-in-all his expenses were $35.45. His take was $76.73, so his real net was $41.28 for this day. It doesn't look as if he'll be able to buy that next purchase of another 10 machines very soon, but time goes by and another month comes around. Sales increased at one location, a jammed machine at another location, ... someone put a wad of paper into the mechanism for whatever reason, and he looses one location. {Charity Operators loose locations more often than do Commission Operators.} This month his net was less, and his work was more difficult as he had located his remaining machine ... so he had to service the machines on location, and risk the chatter from the merchants.

This guy doesn't give up! He discovers Sam's Club, and realizes that he was paying almost twice as much as he could have been paying. Having made this discovery lit a bulb in his head, and after putting 2 and 2 together, he figured that if the Biz-Op guy would over-charge him on product, and lead him to envision profits which are possible, but not usual, then the machines were probably over-priced, too. This newbie isn't dumb, he's just in the learning process. Shortly, the newbie goes onto the internet and finds some of the bigger machine manufacturers, as Oak, Northwestern, or even A&A. Those Biz-Op machines were over-priced, too!

The Charity Operator newbie is as previously stated relatively intelligent, as most of us Operators are, and he had tenacity, so he gets his ducks in a row ... less expensive machines, ... and of better quality, too, saving money by buying at Sam's Club, and arranging his route to get it done in less time, and with less effort. At this juncture, he still isn't getting rich, but the reality of a brighter future is there ... and he investigates small bulk prize machines, and also looks into 2" Capsules - and - or - flat vending. Now he has a dilemma, how to represent a Charity using something other than Gum or Candy. At this time, he seriously considers becoming a Commission Operator in a few locations, but not ending his relationship with the Charity.

First, he buys a Double Header Small Bulk, and tries his hand at it. After a few inquires, he's found that a 2 for 25¢ wheel can be bought for about $4 or $5, so he gets a couple. In his first location, he places the two venders in a local Thrift Store! ... darned if he didn't place it right next to someone else's Charity machine which was vending one 850 Count Gumball for a Quarter! He filled the other side with some Gold Mix stuff. When he returned to this location, the first thing to do was to pay the Commission ... he did it without too much trouble, and "golly-gee", guess what! The money left over for him was actually about the same, if not just a little more than if he'd had operated it as a Charity ... simply because he was able to diversify, and this eventually led him to becoming a full time Commission Operator.

BTW, what happened to the Charity Machine in the Thrift Store that vended one 850 gumball for a Quarter? ... Well, this new Commission Operator suggested to the store that since it wasn't selling any product and that since it was looking bad, too, that the location have it picked-up by the Charity Operator!

Happy Vending, Bob

 

[AmuseStar Vending Co]

Right on Bob!

Kyle

[Jax Snacks]

Most vendors (including myself) start off as candy charity vendors and then evolve into other types of vending over time.  I know that what I do today is radically different from what I did 8 years ago.  All businesses (vending or otherwise) evolve.

When I started, I was 100% charity and wanted nothing to do with commission.  I realized a number of years ago that I needed to diversify into commission in order to continue to grow and survive.  I then swung the other way and wanted nothing to do with charity any more.  I realized the error of my ways since I discovered that I need both types of locations in order to survive and grow.  Again to use a football analogy, I use both the run and the pass to move the ball and to abandon one of them would make me too one dimensional.

I look at both models simply as an approach to get into and ultimately keep locations.  There are some locations where only the charity will get you into and there are other locations where only the commission will get you into.  You also need to be prepared to flip-flop some locations in order to salvage them (especially restaurants).  Many locations have been converted to commission in order to keep the machines on location. I also have converted other lower producing restaurants to charity when more charity vendors move in and the owner (who is never around) doesn't seem to really care about the small commission. 

As a charity vendor here are some things that I have learned and to consider:

1. Be prepared to justify and defend to the owner the amount contributed.  It’s best to state the annual contribution.  Never say $1.00 a month! 

2. Be prepared to provide documentation about your charity.  I always carry some brochures provided by the charity. 

3. Understand that locators position your machine as a charity fund raising tool to the location and do not explain how the program really works.  This is the deception that some commission vendors really hate. 

4. Locators prefer charity because they can spin the pitch and also get "permission" from a low level manager or front line employee. 

5. As some point, you will probably hit a brick wall when locationing and it will become very difficult to get more charity locations.  Saturation levels are getting high everywhere as more people discover sites like this one and bizops keep advertising.  There are only a finite number of locations and or course one and only one Wolfie! This is what happened to me and why I went down the commission rack path.  If/when you hit this wall, you may need to expand your geography another 100 miles or get into other type of vending (racks, cranes, video, soda, etc.) 

6. Some locations will need to be converted to commission in order keep them after a location changes its management or ownership.  This happens a lot in restaurants and hotels. 

7. Some commission vendors will trash your charity machine to the owner since they feel that you are getting a free ride and got in with false pretenses.  They may also have a contract with an exclusive.  They feel that they are doing vending the "right way" by paying rent.  This is business and it can get ugly sometimes.  They made a significant investment and simply want to protect that investment.  Some charity vendors or locators will even slam charity machines next to commision racks in grocery stores and K-Marts forcing the commission vendor to take action. 

8. Charity locations tend to be unstable and charity vendors usually get evicted more frequently.  This happens when ownership, management or corporate policies change.  Even a commission pitch may not save some of them.  You will be surprised how often businesses are sold or reorganized - then your charity machine get wacked!

9. Every visit to a charity location is an opportunity to get evicted.  Try to get in and out quickly and don't draw to much attention to yourself.

10. To make it as a full time charity vendor, you will need an extremely large number of locations.  I figure 500+ triple head candy or 1,000+ single head gumball machines.  How or can you get that many?  Do you really want that many?  I personally do not and would rather have 120+ racks.  Of course this number will vary depending on your life style, finances and dependents.  I would love to hear comments from full time charity vendors.  I only know a few and they both have over a thousand gumball machines.

There are pros and cons to every model and there is no perfect approach.  I try to take advantage of both models.  We all need to evolve and adapt to survive in business. 

Happy vending - charity or commission or what ever! 

Jax

 

[guile]

Right on Jax.

[ButlersVending]

Hello Jax,

 

Your posting is appropriate, complete, as it touches all of the bases, and consequently the most beneficial to us all: 

• It's well organized
• Well written
• Insightful
• "Fair and Balanced"

What I appreciate most about your response, however, it has exposed me to some concepts which were heretofore either unclear, or just not known. Plus, if the need to use a Charity presents itself to me in the future ... handling it in the manner in which you do, would be the only way that I could do it ... but, I believe that I would be able to do it.

 

Thanks for taking the time, and giving the effort, to write.

 

Sincerely, Bob

[guile]

Hello Jax,

 

Your posting is appropriate, complete, as it touches all of the bases, and consequently the most beneficial to us all: 

• It's well organized
• Well written
• Insightful
• "Fair and Balanced"

What I appreciate most about your response, however, it has exposed me to some concepts which were heretofore either unclear, or just not known. Plus, if the need to use a Charity presents itself to me in the future ... handling it in the manner in which you do, would be the only way that I could do it ... but, I believe that I would be able to do it.

 

Thanks for taking the time, and giving the effort, to write.

 

Sincerely, Bob

Bob- Obviously, you posses a lot of knowledge in the vending biz (as well as life, I'm sure). I, on the other hand, would be considered a "newbie" at this early stage. While I'm sure I can (and probably will) learn from you, it don't mean I have to agree with everything you think/say. But I would like to take the time to say thank you for opening my eyes. You have already taught me something and I truly appreciate it. What you taught me was the importance of "adapting" to a changing climate in this business.

While I will continue to place machines in support of my chosen charity, I have opened my mind a bit and will start with commission (sooner then later) as well. As Jax pointed out, there is no reason I can't do both. I feel certain locations are perfect for charity placements (Doctor's/Dentist offices, Gym's) while others are clearly not. Again, thanks and I bow before your greatness:)

Warmest regards,

Darrin

 

 

 

[drvend1@yahoo.com]

Jax

you gave the perfect answer.

I feel 100% the same like you on this subject.

thank you

Simon

[ButlersVending]

Hello Darrin,

Once I heard two fellows talking, and one of them commented on the appearance of a woman who had passed their path; he said "That woman sure doesn't have much in the looks department", to which the other replied "Hey, there ain't no such thing as an unattractive woman; it's just happens that some are just a little bit better looking than some of the others".

This is true of us Operators, too. We're all newbies, it's just that some of us are just a little bit newer than some of the others. As for the Charity vs. Commission ... it was said in ancient times that "all roads lead to Rome"; and conversely, those same roads can take the traveller back to his beginnings.

Bob

 

 

[Jax Snacks]

Thanks All,

A few years ago I would have trashed and given up on charity vending myself. I lost about 20% of my charity locations year after year and got sick of it. When I moved to commission racks, I also realized that there were not enough good commission spots available and will need to displace the current commission vendor to get in - not an easy or pleasant task.

Case in point. I just placed two restaurants last week on charity. Both places really did not want any  more machines.  One place already had videos, spirals and racks. That vendor had an exclusive but my small charity machine was okay with the owner. The other place already had 2 commission machines (since I recognized them from other places) and 1 charity machine. Once again only my charity was able to secure that spot. Will the commission guys try to get me kicked out? Maybe, but it's a risk I am willing to take.

I recently filpped two commission restaurants back to charity. At first I was the lone vendor offering a commission. Then the charity machines started to show up. Now if these spots are very good AND I have an exclusive, I would inform the owner to have them removed. In this case I had no exclusive AND they were below average performers. So rather than fight over pennies, I simply put my charity stickers on the machine and left. Clearly the owner doesn't mind the charity machines and will probably not get upset over not receiving the small commission from just my machine.

I have some sports bars that demand a higher percentage equal to what the amusement vendors offer. You know, those guys that claim to be giving 50%. They say take it or leave it. I take it since that is the only way to get in.

I recently flipped a restaurant to commission. When the new owner approached me and asked me what his cut is, I told him that the charity authorized me to give a commission in certain cases. He soon became less defensive and allowed me to stay. I removed the charity labels. He kicked out the other two charity vendors since they would not offer a commission. Now I am the only bulk vendor there.

One more thing. I believe that charity giving is also cultural. With the diversity in America now, some cultures are more supportive of charities. I found that Americans, Europeans and Hispanics tend to be more supportive of charities. While Asian cultures of Chinese, Arab and Indian are less supportive of charities. This is not a knock on any one race/culture, just a cultural reality I have observed. Case in point, I have never been able to get a Chinese restaurant with charity - only commission gets me in.

I could go on and on. But I have learned that I need to use both methods to get into some places and also need to flip places to salvage the good places or make the below average locations profitable. It can be a tedious process, but it is worth it in the end.

Jax

[drvend1@yahoo.com]

Jax

I have never worked with charity before (till now I'm 100% COMMISSIONS) but i see that it can be used to get into locations were commission will not get you in. what charity to you like to work with ?

Simon

[G-man422]

This thread is great.  Thank you guys for the useful info. 

 

[Jax Snacks]

Jax

I have never worked with charity before (till now I'm 100% COMMISSIONS) but i see that it can be used to get into locations were commission will not get you in. what charity to you like to work with ?

Simon

I use Hugs Not Drugs since I grew up in an alcoholic environment.  However it is a preventative program and not a treatment program.  They offer a free educational workbook intended to educate kids on the dangers of drugs and alcohol addiction. 

http://www.hugsnotdrugs.com/

Jax

[drvend1@yahoo.com]

jax

thanks for the info and the link

Simon

[ginger vend]

Excellent posts:cool:. 

The route I recently bought is a commission's route (have only had charity before) and I am starting to see now the benefits of each as has already been stated much better than I ever could.  It is a bit scary jumping from charity to commission (requires more brain work and time at locations--counting $, writing receipts), but thus far has been rewarding.   Ginger Vend