Any one deal with Gilly vending?

[PHX1]

I noticed Gilly vending got the contract for all the Arizona state campuses (canteen used to have it) and some how has the biggest local company (Ace) running the route for them. Gilly got the contract but they are in Florida, I was curious if any one on here has ever heard of companies doing this?

[AZVendor]

I've never heard of them. They must be a management company. It's too bad when local locations deem it necessary to use out of state management companies. Canteen owns Best Vendors so maybe they ticked off ASU.

[PHX1]

That’s what I thought too, but when I looked at Gillys website its an actual vending company, they have colleges all over and from what I have noticed they have a local company such as Ace run it for them.

 

AZ, have you ever dealt with pelican group? They are a VMC and have the contract for Costco, which of course here in phx ace does most of them.

[AZVendor]

No, the only management company I dealt with was Best Vendors (Worst Vendors) who finally screwed me to the wall as I knew would happen.  That's how North County Vending from California, now absorbed by Canteen, got their big foothold here in the valley.  The Pelican Group might be even worse because they are into anything and everything coin operated.  Telephones, amusements, bulk (how they started) and vending.  The real problem is they do to many lines of business and I can guarantee you that they do any coin-op segment well.

[orsd]

Holy shi t

North county vending is in Phoenix?

[AZVendor]

No, North County is now non-existent.  The owner of it was tight with Canteen management as both were on the board of Best Vendors.  When North County wanted to create strong foothold in Phoenix they got Best Vendors to move all of their Phoenix business that didn't already belong to Canteen, to North County.  A few years later North County sold themselves to Canteen and Canteen bought Best Vendors.

[PHX1]

Another question for you AZ, From what I know you have the most experience out of anyone on this website. I’ve been doing Drink and snack vending and some OCS for about 4 years now (with about 65 machines, mainly Royal Merlins and AP 7600’s). I’m finishing up my MBA at ASU, and I was planning on growing a substantial amount after that is compelted. If I remember right you or some one else on here had said that the growth the old timers had back in day would be extremely tuff now a days. I was curious to see If you would be willing to expand on this some more, as far as the potential growth here locally, if at all?

[orsd]

If you are serious, go after canteen

Fight for their account, woo them over

should be somewhat easy because canteen gives crap service, but they will step it up for a couple months after they get the threat of booting and canteen will grease their palms, then a few month later will continue with crap service.

[Feral Vending Mechanic]

No, North County is now non-existent.  The owner of it was tight with Canteen management as both were on the board of Best Vendors.  When North County wanted to create strong foothold in Phoenix they got Best Vendors to move all of their Phoenix business that didn't already belong to Canteen, to North County.  A few years later North County sold themselves to Canteen and Canteen bought Best Vendors.

 

It's actually a little more complicated than that. Compass Group ( who owns Canteen ) bought Best Vendors in 2003. I was with NCV at the time, in Seattle. Best Vendors assured us that nothing would change. Best Vendors is a huge management company. They've got a lot of accounts. And they were still giving us accounts. But they were, naturally, keeping the best of the new accounts for Canteen. ( And shoveling the crap, like the 12 employee Office Supply Chains, our way. )

 

It was early 2003, just before Compass bought Best Vendors that NCV bought the company ( who's name escapes me ) in Arizona, entering that market. NCV was tight with Best Vendors prior to the purchase, and some sort of deal was worked out that they'd continue to get most of the Best Vendors business in some marketplaces, but not in others. 

 

NCV sold to Canteen in September 2011. The owner had a serious medical problem, and needed to sell the business.

Unrelated trivia: NCV started in San Diego in 1981, and within a month of his start another San Diego vending company, Rainbow Vending started. Thirty some odd years later, they both sold to Canteen within a month of each other. 

 

--------------------------

 

More to the subject at hand, It is entirely possible to wrest control of Best Vendors accounts from Canteen. Best Vendors and Canteen don't always get along so well. Someone at an account who is committed to getting Canteen tossed out, will eventually succeed. I've seen it happen.

 

I've dealt with Pelican, too. All the management companies are awful. They're consummate middlemen. They do pretty much nothing but signing up companies, and take a slice of the pie. Pelican is weird and crappy, because they have very specific plan-o-gram demands. They sometime require certain, specific products and are very inflexible about it. No matter how poorly they sell. 

 

While I haven't specifically heard of Gilly's, I've dealt with another management company that tried to make it seem as if they were the ones filling the machines. The route driver had to slap these big magnets with the managment companies logo on it before servicing certain accounts. They also had to wear a hat with the other logo. ( But were allowed to continue wearing their company shirt, for some reason. ) 

[musser]

There are s whole bunch of amusement operators that have lost a ton of money with Pelican the last couple of years. I mean serious money, beware.

[AZVendor]

It was early 2003, just before Compass bought Best Vendors that NCV bought the company ( who's name escapes me ) in Arizona, entering that market. NCV was tight with Best Vendors prior to the purchase, and some sort of deal was worked out that they'd continue to get most of the Best Vendors business in some marketplaces, but not in others. 

 

NCV sold to Canteen in September 2011. The owner had a serious medical problem, and needed to sell the business.

Thanks for helping me get my dates straight.  I think it was Cactus Vending that NCV bought here that really gave them a serious foothold, but in the years prior to that they had been "reclaiming" Best Vendors accounts from every other BV vendor here until only NCV held any BV accounts.  While I knew I could lose the business at any time and missed it when it was gone, I didn't miss BV and their Big Brother attitude at all. 

 

Here's my unrelated trivia, or is it related?  Cactus Vending was owned by a man and his boys who had been here for many years after leaving their jobs rebuilding machines at Vendors Exchange in Cleveland.  When Cactus started in the early 80's they rounded up some of the largest accounts ever held here.  Due to tax issues they went by the wayside for awhile and another decades old company, Desert Vending, grew to the point of wanting more product rebates so they opened a cash and carry from their vending warehouse called Downtown Prices.  A few years later Downtown Prices built a new state of the art warehouse and became Vend Source.  This later led to the owner of both selling Desert Vending to Cactus Vending making them a big dog again.  A few years after that is when NCV bought Cactus and a couple of years after that Vend Source was sold to Vistar (VSA at that time). 

 

And the worm turned......  and here we are today.  I think those that sold out were very smart to do it when they did as they avoided this horrible depression that has made a skeleton of vending now.  Okay, that is my opinion only.

[Feral Vending Mechanic]

Thanks for helping me get my dates straight.  I think it was Cactus Vending that NCV bought here that really gave them a serious foothold, but in the years prior to that they had been "reclaiming" Best Vendors accounts from every other BV vendor here until only NCV held any BV accounts.  While I knew I could lose the business at any time and missed it when it was gone, I didn't miss BV and their Big Brother attitude at all. 

 

Here's my unrelated trivia, or is it related?  Cactus Vending was owned by a man and his boys who had been here for many years after leaving their jobs rebuilding machines at Vendors Exchange in Cleveland.  When Cactus started in the early 80's they rounded up some of the largest accounts ever held here.  Due to tax issues they went by the wayside for awhile and another decades old company, Desert Vending, grew to the point of wanting more product rebates so they opened a cash and carry from their vending warehouse called Downtown Prices.  A few years later Downtown Prices built a new state of the art warehouse and became Vend Source.  This later led to the owner of both selling Desert Vending to Cactus Vending making them a big dog again.  A few years after that is when NCV bought Cactus and a couple of years after that Vend Source was sold to Vistar (VSA at that time). 

 

And the worm turned......  and here we are today.  I think those that sold out were very smart to do it when they did as they avoided this horrible depression that has made a skeleton of vending now.  Okay, that is my opinion only.

 

Yep. It's getting harder and harder to make it in this industry. And, for the record, micromarkets are not the answer.

[Broncho]

Yep. It's getting harder and harder to make it in this industry. And, for the record, micromarkets are not the answer.

Most micro markets in their current form are not the answer, that's for sure.

In their current state their is a lot of greed going on from high commissions, high software support fees, equipment priced to the equivalent of a decent car. Then you have to factor in the lack of security features, the ridiculous patents awarded, ect...

I've spent the past 2 years trying to make them work in my own operation and through that journey I found that most companies are completely out of touch with operators. I believe our offering to be one of the few that has all the features nessisary, without carrying a huge price tag or recurring fee ($50/month). one reason I frequent this form so much as a lurker is to get others opinions on short comings in different areas of vending. So what do you feel is wrong with micro markets and why they are not an valuable solution?

[kiwi]

So what do you feel is wrong with micro markets and why they are not an valuable solution?

I can't speak for Feral but I think most people just don't know enough about micro markets... when I first heard of them I just thought they reminded me of a glorified honesty box.

 

I think that you would even admit that you probably weren't convinced on the idea of micro markets to start with?

 

I am beginning to change my attitude towards the idea of using micro markets now... especially the design that you have developed.

 

I would to know what others think about them & what effect they think micro markets will have on the vending industry in the US but I will start this conversation in another area so not to hijack this one. 

[cosvending]

I don't have any micro markets, but I have talked to a couple of folks who do. One of the big problems is the high cost of fresh food and the relatively small markup. Couple that with the waste, and the profitability is very low. One vendor I spoke to said his micro market does well over $3000 per month in sales, but over 50% of that is fresh food which has almost no profit. After paying fees and commissions on all of that, he says the profit is less than $400 per month. That said, if you could use a system like the one Broncho had and pay far less in fees, that could be a game changer.

Another vendor I spoke with says that hers is profitable, but it is also subsidized, and that makes all the difference.

Broncho is eight, the high fees are a killer.

[Broncho]

I don't have any micro markets, but I have talked to a couple of folks who do. One of the big problems is the high cost of fresh food and the relatively small markup. Couple that with the waste, and the profitability is very low. One vendor I spoke to said his micro market does well over $3000 per month in sales, but over 50% of that is fresh food which has almost no profit. After paying fees and commissions on all of that, he says the profit is less than $400 per month. That said, if you could use a system like the one Broncho had and pay far less in fees, that could be a game changer.

Another vendor I spoke with says that hers is profitable, but it is also subsidized, and that makes all the difference.

Broncho is eight, the high fees are a killer.

 

Thats the whole reason I got into it to begin with honestly. The fees that other operators are paying are horrendous to say the least. I spoke with an operator recently that uses a commission based micro market system and he spent over $180,000 in commissions on 52 markets in one year to the micro market supplier. As a producer I want to be in it for my customers over my bottom line and my success should be based on the buyers continued success. Now I’m not talking about continued success based on a ongoing commission fee, but rather repeat sales.

 

Our goal from the beginning was to make something for us that worked and made us money. Its kinda a childish way to break it down, but I believe that’s what all of our goals are at the end of the day. Im going to start a new thread as Iver already high jacked this one enough and see if we can get some ideas rolling on where we should be going in the future.

[SchligVend]

I've only been vending for 4 years and full time since last june so I only know from my short time in the jndustry.... I invested about 20k for about 10 accounts with 15 machines... I had no clue what I was doing but I instantly started to knock on doors and get new accounts on my free time, within 1 year I doubled to 30 machines next year I was at 60 and now I am at 123 machines placed on location and about 24 more in warehouse .... I'm moving into 3 accounts in the next 30 days one of the accounts currently has 6 machines...... So for anyone to say it's hard to grow in this industry I think are crazy....

And I am in Arizona also!!

[Broncho]

I've only been vending for 4 years and full time since last june so I only know from my short time in the jndustry.... I invested about 20k for about 10 accounts with 15 machines... I had no clue what I was doing but I instantly started to knock on doors and get new accounts on my free time, within 1 year I doubled to 30 machines next year I was at 60 and now I am at 123 machines placed on location and about 24 more in warehouse .... I'm moving into 3 accounts in the next 30 days one of the accounts currently has 6 machines...... So for anyone to say it's hard to grow in this industry I think are crazy....

And I am in Arizona also!!

 

Its quality over quantity though:

 

In our operation we have a route that consists of 58 machines and the route takes Monday through Friday from 8-4 to service(driver loads their truck from 7-. This route is completely remotely monitored and everything is prepulled in warehouse so routes are run very efficiently. This route does roughly $37-40,000/month. One of the accounts on this route actually holds 42 of the machines and out of those machines about half are extremely profitable and the other half are in warehouses and small offices of the location that are necessary to keep the account.

 

So we have one driver doing $40,000/month in 58 machines taking 45 hours a week on payroll with very efficient prepulling. These numbers allow us to upgrade the machines every 5-7 years to brand new ones and we are constantly doing upgrades at these accounts including touch screen machines, credit card acceptors(since 2007), and customized sign-age and graphics.

 

Imagine taking your 123 machines and translating it with these numbers to roughly $85,000/month or slightly over a million a year. Now these accounts were extremely hard to get, required months of planning and some included doing very difficult bidding. Also one we pay 20% commission and on about 15% of the machines we pay no commission. The high commission accounts are priced about 10% higher on price though so that helps some to eliminate that calculation to an extent.

[SchligVend]

Its quality over quantity though:

In our operation we have a route that consists of 58 machines and the route takes Monday through Friday from 8-4 to service(driver loads their truck from 7-. This route is completely remotely monitored and everything is prepulled in warehouse so routes are run very efficiently. This route does roughly $37-40,000/month. One of the accounts on this route actually holds 42 of the machines and out of those machines about half are extremely profitable and the other half are in warehouses and small offices of the location that are necessary to keep the account.

So we have one driver doing $40,000/month in 58 machines taking 45 hours a week on payroll with very efficient prepulling. These numbers allow us to upgrade the machines every 5-7 years to brand new ones and we are constantly doing upgrades at these accounts including touch screen machines, credit card acceptors(since 2007), and customized sign-age and graphics.

Imagine taking your 123 machines and translating it with these numbers to roughly $85,000/month or slightly over a million a year. Now these accounts were extremely hard to get, required months of planning and some included doing very difficult bidding. Also one we pay 20% commission and on about 15% of the machines we pay no commission. The high commission accounts are priced about 10% higher on price though so that helps some to eliminate that calculation to an extent.

That's an awesome account but what if you lost that account by someone that out bid you? The average guy or guys in this business with that type of account will go out of business over one account..... Yes I would love to have it... But realistically speaking I am happy with my 100 to 150 accounts that do mediocre so if I were to lose any one or two of them it won't put me out of business....

[Broncho]

Don't get me wrong we do have a lot of smaller accounts but these large ones come with contacts that last 3-5 years. We are pay much gaurunteed to return a profit and even if we lost it we now have over 40 machines that are extremely nice and like new. So easy sets in smaller accounts or prefect for large account bids. Also the machines cycled out are placed in smaller accounts and used for growth, but we almost never place a machine that does leads than $250 a month.

Also that one route has 5 accounts on it and is not or only route. I have one that's compatible in numbers but had about 20 more machines and only a few lagoons with more than 4 machines.

[Poplady1]

Gilly Vending is the largest women owned vending company in the country.  They offer a healthy program to many Universities across the country and then they partner with a local company.