RJT Posted August 16, 2015 Share Posted August 16, 2015 I felt compelled to write this thread because I wanted to touch base on a few things I see and hear all the time. I see and hear about it on this and other forums I hear it everyday in my consulting work. This one is going to be a little long but I think it will be worth your time to read it if you are serious about the vending business. In vending you have a few different levels that people get into with the "business". You have people that are just doing it as a hobby looking to make a few extra bucks. You have those that do it to replace a job or create a job for themselves. Then you have those that are looking to build a business. Let’s look at each one. Those looking at it as extra income that never intends on doing vending full time are just that. They will only have a few accounts and they are ok with that. Then you have the folks that grow a decent size “route” and make a “decent living” but are not in a position with revenue to hire anyone. They are working almost everyday with ordering and buying product, filling machines, repairing machines, counting money, making deposits, etc. They are a “one man show”. In reality do they have a true business? IMO they have created themselves a job. Yes, it is based around the vending “business” but is it really worth it? The average route driver for a decent size company can make anywhere from $45k to $70k. Are they making more than that? Why have all the headaches and risk of owning a “business” when you can make the same or sometimes more working for someone else? I can understand the headaches to be free of working for someone but what about the risk. The risk of possibly loosing everything. This might not be the case for some that have a wife that makes good money, or other sources on income such as retirements, investments, etc. I talk about this all the time. These folks are one accident (food poisoning, broke leg, gall bladder surgery, cancer, heart attack, pulled back, torn hamstring, flu, etc anything that would put you out of commission for more a week or more) from disaster unless they really have a solid backup plan. What would happen if for two weeks your accounts could not be serviced? A week you might get by and that is only if you have once a week accounts. You would only have a week tops for large two to three times a week accounts. A backup plan means someone that can jump in and do everything that needs to be done for you for a short period of time. Even with that most times someone like that is going to need to be paid. Can you afford to do that and keep enough revenue for yourself to pay your bills, and living expenses? A backup plan is important to have in place if you are depending on this “business” model to make your living. It can be done but not an easy task. An ideal situation is having a wife, son, daughter, etc that you can depend on. Then you have those that want to be in the vending business by creating an actual business with route drivers, warehouse staff, service techs, sales/customer service, route managers, office, etc. Some think this is a lofty goal but that is what an actual vending “business” looks like. Now that is not to say it is going to happen over night and you will have to wear all the hats as you grow to that level and it may be baby steps like hiring a part time driver, then full time, part time warehouse person then full time, etc. This is why I am always preaching about account revenue and how important it is. I had a guy the other week say he wants to grow his business to be able to hire someone to run the “route” and he does the “other stuff”. I asked what he plans on paying that person and he said around $10.00 an hour. I told him point blank he will NEVER hire anyone to run a route he can trust and depend on for $10.00 and hour. Back 12 years ago we had problems paying $35k plus commission hiring anyone we could trust and depend on and that average is around $17.00 and hour. So what does it take in revenue to hire a route driver and pay the “business” a profit (ie you the owner) I look at it about straight revenue. Forget how many accounts for a second because it is REVENUE that is important. You can do that with one account or 1000 accounts. The problem is having so many accounts trying to make that revenue that is physically impossible to get to them all but that is an extreme case but it can happen. Let’s take a $50 average per machine. If we cut that in half and ONLY take out for product cost now we are down to $25.00 per machine. Now let’s take a $35k salary (which is more once you factor in what the employer has to pay in) that is around $673.00 a week based on a 52 week work year. So that means he/she would need to work around 28 machines per week at that $50 per week ($25 net) average. In reality if you factor in all the cost such as insurance, fuel, repairs, stales, cost of goods, truck cost, etc, etc you would need to be around 40 machines at $50 ($25.00 net) average and that still does not leave any profit for the company (ie you the owner). Oh did I mention these machines where not free so you have to either make machine payments or pay yourself back before making a profit. So where does that leave us? Well you can either double the amount of machines or the revenue to let you the owner be able to make a profit and pay yourself around the same amount of $35k a year. Like I said in the end this is about revenue/MONEY and that is all that matters. It is not about how many machines, accounts, etc it is about MONEY. Numbers (ie money) never lies about the true performance of a business. It takes a certain amount to survive, and it takes a certain amount to grow, and it takes a certain amount to be profitable. I work with all kinds of vendors but to put this in perspective in order to have a full time route driver, a part time warehouse person, two route trucks (one is a backup) a warehouse, and all the other things that go with owning a vending business you will need to be doing around $300k a year in revenue and that is still a struggle and you doing a lot of the work “managing” the business. Keep in mind this is being able to pay yourself out of the business because you don’t want to work for free. This could vary one way or another depending on your cost to do business. The more you grow the more employees and cost associated with that but hopefully more PROFITS/MONEY for you the owner. In the end account and machine average is going to be important if you intend on growing and being profitable. So my point is I wanted folks to see the different levels of the vending business and what it takes and looks like at each level. I wanted people to understand the importance to how much revenue they need to create to operate. Link to comment Share on other sites More sharing options...
AngryChris Posted August 16, 2015 Share Posted August 16, 2015 A business is not defined by the number of employees or if it has a warehouse. If you wish to use a different term, that's fine. But to discredit the thousands and thousands of businesses out there as not being "real" businesses is just ignorant. A business provides goods and/or services for a price. You make good points but you are clearly not familiar with other regions. Around here, $10-12/hour is pretty common for route driver wages. The cost of living isn't that high. You are definitely at a disadvantage when you're a one man show making the same money as an employee when you only look at it from a financial standpoint. However, I am much happier with my general freedom to do things as I want, when I want. I happen to enjoy being in charge and ibknow from experience that there's way more than just money. If I only cared about money, I'd probably work on an oil rig. I think you are discussing things with a narrow view in that regard. I can work my own schedule. I get to see my customets directly. I don't have to worry about employees or coworkers messing things up. The vast majority of businesses in the world are small and I think you forget that. That guy operating a hotdog stand might be his only form of labor, but he's still operating a business. If you wish to discuss growing a Vending business into a large operation, that's fine, but no business-minded person should have "operating out of a warehouse" as a priority over "making a substantial profit." Being in business is about profits, not revenue. Link to comment Share on other sites More sharing options...
Chard Posted August 16, 2015 Share Posted August 16, 2015 I'm curious RJT, what is your background? How do you know the vending business? How did you start out in it? Can you share your story with us? Link to comment Share on other sites More sharing options...
RJT Posted August 16, 2015 Author Share Posted August 16, 2015 A business is not defined by the number of employees or if it has a warehouse. If you wish to use a different term, that's fine. But to discredit the thousands and thousands of businesses out there as not being "real" businesses is just ignorant. A business provides goods and/or services for a price. You make good points but you are clearly not familiar with other regions. Around here, $10-12/hour is pretty common for route driver wages. The cost of living isn't that high. You are definitely at a disadvantage when you're a one man show making the same money as an employee when you only look at it from a financial standpoint. However, I am much happier with my general freedom to do things as I want, when I want. I happen to enjoy being in charge and ibknow from experience that there's way more than just money. If I only cared about money, I'd probably work on an oil rig. I think you are discussing things with a narrow view in that regard. I can work my own schedule. I get to see my customets directly. I don't have to worry about employees or coworkers messing things up. The vast majority of businesses in the world are small and I think you forget that. That guy operating a hotdog stand might be his only form of labor, but he's still operating a business. If you wish to discuss growing a Vending business into a large operation, that's fine, but no business-minded person should have "operating out of a warehouse" as a priority over "making a substantial profit." Being in business is about profits, not revenue. I think you missed many of my points. I never said that the only way was "operating out of a warehouse" was the only way. I mention three different styles in this thread which included a hobby operator, a one man show, and a person building a large vending operation business. I also talked about the advantage or disadvantage of all three styles. Yes you can call all three a business and you are correct it is about profit. The BIG picture is you not only have to generate the correct revenue and profits you have to be competitive in your particular industry. Plenty of people have a "business" but that does not mean they can make a living at it. That has always been the BIG problem with vending it is so costly and very hard logistically to scale compared to many other industries. The real question still boils down to generating enough revenue that equal profits. I can buy a case of can drinks for $2.00 on sale and sell them for $20.00 and make profit. Question is can I do this enough to make a living. I can buy a combo machine for $50.00 place it in an account that does $30.00 in revenue and I will make "profit" but I will not make enough to live on. Can you show me who in Ohio is paying route drivers $10 to $12 an hour? I can never see that working being able to keep anyone they can depend and trust at that pay rate. I'm curious RJT, what is your background? How do you know the vending business? How did you start out in it? Can you share your story with us? I started about 15 years ago as a sales and operation manager for a 6 route company, then worked for another operator doing the same thing about the same size and then around 5 years ago started my own vending operation, and consulting business. Link to comment Share on other sites More sharing options...
AngryChris Posted August 16, 2015 Share Posted August 16, 2015 You did imply that an "actual" business includes employees and a warehouse, and if it doesn't look like that, then it's only a job and not a real business. I would never tell someone or imply that their business isn't an "actual" business because they lack employees and overhead. That's just silly. So no, I didn't miss your points, I just think you are completely off base with a lot of people. Sure, there are people who will agree with you, but some like myself will not. As for the 10-12/hour wage, that's the going rate in many Midwestern areas. You should look it up. I can call many different operators and they will tell you the same thing. $20,000-$25,000/year will easily pay a normal consumer's bills in the Midwest. I have never seen a route driver position open for more than $14/hour locally. Link to comment Share on other sites More sharing options...
RJT Posted August 16, 2015 Author Share Posted August 16, 2015 You did imply that an "actual" business includes employees and a warehouse, and if it doesn't look like that, then it's only a job and not a real business. I would never tell someone or imply that their business isn't an "actual" business because they lack employees and overhead. That's just silly. So no, I didn't miss your points, I just think you are completely off base with a lot of people. Sure, there are people who will agree with you, but some like myself will not. As for the 10-12/hour wage, that's the going rate in many Midwestern areas. You should look it up. I can call many different operators and they will tell you the same thing. $20,000-$25,000/year will easily pay a normal consumer's bills in the Midwest. I have never seen a route driver position open for more than $14/hour locally. Take it how you want but that was not my intent. My intent was to show the different styles of vending operators and the pros and cons of each. Matter of fact the large operation can look more negative if you look at the risk and responsibility factors. However where it is less negative is when you can have people in place when you have a need to be absent and things still function and you the owner are able to still have revenue to live on while in the absence. Link to comment Share on other sites More sharing options...
Anacapa Vending Posted August 16, 2015 Share Posted August 16, 2015 The biggest challenge in vending is the amount of capital it takes to get to that 300k/year. I believe that most of us our working towards it, but it takes many years do build a business to that size without outside investment. While you build you really don't have any other choice but to be a one man show. Its all part of the risk we are taking to be business owners. Link to comment Share on other sites More sharing options...
CajunCandy Posted August 16, 2015 Share Posted August 16, 2015 I spent the better part of one week and a day waiting to pass a "kidney stone" did it slow me down? Yes! I'm a one man operation and I did what I had to do to complete my route. I will admit it was tough and hope not to go through it again! My third kid! I name it obuma stone! lol! cajun Link to comment Share on other sites More sharing options...
RJT Posted August 16, 2015 Author Share Posted August 16, 2015 The biggest challenge in vending is the amount of capital it takes to get to that 300k/year. I believe that most of us our working towards it, but it takes many years do build a business to that size without outside investment. While you build you really don't have any other choice but to be a one man show. Its all part of the risk we are taking to be business owners. I agree!! That's why I say it is so important to have quality accounts so that capital (assets) are making you the most it can per machine. That was also my point that you can do it with as many or as little equipment depending on the quality of accounts you have. Some think "to many eggs in one basket" mentality but it is important to have as much revenue you can with the least amount of equipment. If not., like you said the capital investment can get fairly large in the grand scheme of revenue you are producing. In reality you can have a few accounts with less than 20 machines producing that $300k a year or you could have a hundred machines out doing the same amount. That's the part I love about vending you can be as small or as large as you want and anyone can get into the business and grow it as large as you want. Unlike other businesses in vending you can start with less than $1000 invested and grow it to an unlimited size. I spent the better part of one week and a day waiting to pass a "kidney stone" did it slow me down? Yes! I'm a one man operation and I did what I had to do to complete my route. I will admit it was tough and hope not to go through it again! My third kid! I name it obuma stone! lol! cajun I am glad it all worked out for you. Let me ask you this what would have happen if you had to have surgery for the stone and be out of work for three weeks? My mother recently had a kidney stone issue that landed her in the hospital for over a week and part of that in intensive care because she ended up being sepsis. She was out of commission for about a month before it was over. I know people can "make it happen" but it is not easy in many of these situations. Link to comment Share on other sites More sharing options...
Anacapa Vending Posted August 16, 2015 Share Posted August 16, 2015 20 machines doing 300k a year that would be very impressive. All the machines and accounts would have to be top of the line. In theory I completely agree with you. But it would be very difficult to pass up good commission free accounts in hopes to only get the best accounts. Link to comment Share on other sites More sharing options...
RJT Posted August 16, 2015 Author Share Posted August 16, 2015 20 machines doing 300k a year that would be very impressive. All the machines and accounts would have to be top of the line. In theory I completely agree with you. But it would be very difficult to pass up good commission free accounts in hopes to only get the best accounts. I didn't say "pass up" anything that makes sense to do. Also the bigger accounts are does not always mean paying any commissions. Plenty of large accounts that are commission free. I have an account right now I am proposing that I will have two snacks, one cold food, one frozen, five drink machines that will do north of $100k and no commission. On the flip side I recently turned down an account that did north of $100k because they had two much equipment (four full banks) and I just couldn't get the numbers to work for me. Link to comment Share on other sites More sharing options...
jerrybrooksvendall Posted August 17, 2015 Share Posted August 17, 2015 A business is not defined by the number of employees or if it has a warehouse. If you wish to use a different term, that's fine. But to discredit the thousands and thousands of businesses out there as not being "real" businesses is just ignorant. A business provides goods and/or services for a price. You make good points but you are clearly not familiar with other regions. Around here, $10-12/hour is pretty common for route driver wages. The cost of living isn't that high. You are definitely at a disadvantage when you're a one man show making the same money as an employee when you only look at it from a financial standpoint. However, I am much happier with my general freedom to do things as I want, when I want. I happen to enjoy being in charge and ibknow from experience that there's way more than just money. If I only cared about money, I'd probably work on an oil rig. I think you are discussing things with a narrow view in that regard. I can work my own schedule. I get to see my customets directly. I don't have to worry about employees or coworkers messing things up. The vast majority of businesses in the world are small and I think you forget that. That guy operating a hotdog stand might be his only form of labor, but he's still operating a business. If you wish to discuss growing a Vending business into a large operation, that's fine, but no business-minded person should have "operating out of a warehouse" as a priority over "making a substantial profit." Being in business is about profits, not revenue. I just want to replace my overtime at work first.... Then as time goes on I would like to be like hillbilly, and say adios to my job, as I go full time into Vending. Link to comment Share on other sites More sharing options...
tc vending Posted August 17, 2015 Share Posted August 17, 2015 Thanks RJT good advice. I like my one man show and you are right it's all about revenue. I wouldn't waste my time making money on the side with vending machines. Link to comment Share on other sites More sharing options...
SCOTT1963 Posted August 17, 2015 Share Posted August 17, 2015 Can you show me who in Ohio is paying route drivers $10 to $12 an hour? I can never see that working being able to keep anyone they can depend and trust at that pay rate. RJT, I am in Northeast Ohio and route drivers are making 10-12 to start, a few operators are paying close to 14 but that isn't the norm till you prove yourself. I've been doing this for a long time and I don't know ANY route drivers pulling 50-70k...none...zero...unless they are also mechanics and that is still a bit high for them. Link to comment Share on other sites More sharing options...
RJT Posted August 17, 2015 Author Share Posted August 17, 2015 RJT, I am in Northeast Ohio and route drivers are making 10-12 to start, a few operators are paying close to 14 but that isn't the norm till you prove yourself. I've been doing this for a long time and I don't know ANY route drivers pulling 50-70k...none...zero...unless they are also mechanics and that is still a bit high for them. Just a quick cursory search in Ohio on CL shows the following. $21.00 an hour http://zanesville.craigslist.org/ret/5160739881.html This one does not list salary but they have good benefits with paid vacation, holiday pay and 401k matching. http://pittsburgh.craigslist.org/lab/5167218729.html I know Canteen operates in Ohio and they pay more than $10 to $12 an hour. Link to comment Share on other sites More sharing options...
AngryChris Posted August 17, 2015 Share Posted August 17, 2015 You found a post on Craigslist with a job opening supposedly starting at $21/hour in an attempt to try to prove yourself. I could call several local companies and easily show you that I know what I'm talking about. Link to comment Share on other sites More sharing options...
SCOTT1963 Posted August 17, 2015 Share Posted August 17, 2015 RJT, I'm not going to argue over whether or not these jobs exist. I can tell you from personal experience with the company you posted they do not start at $21 an hour. I know people that work their in varying positions and it takes years and years to get their. I know of a couple that got hired in at a higher rate than that but they were mechanics for 20-25 years and do maint. out of another office. What I am saying is most route driver jobs are on the job training, right above entry level positions, there are higher paying positions for those with experience. You have to prove yourself and for the most part new drivers learning the job are not getting near 15 let alone 21 an hour. Link to comment Share on other sites More sharing options...
RJT Posted August 17, 2015 Author Share Posted August 17, 2015 You found a post on Craigslist with a job opening supposedly starting at $21/hour in an attempt to try to prove yourself. I could call several local companies and easily show you that I know what I'm talking about. Prove myself? Its called research to back up facts. I don't doubt you that some may be paying what you said. You might find one paying minimum wage also but that is not to say that another vending company is not paying what I said. I also know what I am talking about because I have hired and fired many drivers over the years and it is hard enough to find one at $35/40k a year and that is in a rural old mill town that did not have a strong job market and that was 10 years ago. I am saying they are not going to find anyone they can depend on and TRUST at $10.00 an hour. Like I said, I know Canteen operates in Ohio and they pay more than $10 to $12 an hour plus a nice benefits package. RJT, I'm not going to argue over whether or not these jobs exist. I can tell you from personal experience with the company you posted they do not start at $21 an hour. I know people that work their in varying positions and it takes years and years to get their. I know of a couple that got hired in at a higher rate than that but they were mechanics for 20-25 years and do maint. out of another office. What I am saying is most route driver jobs are on the job training, right above entry level positions, there are higher paying positions for those with experience. You have to prove yourself and for the most part new drivers learning the job are not getting near 15 let alone 21 an hour. I don't/didn't start anyone out at top pay either and that is pretty much the norm unless they had experience. However after the training period they (90 days) they where bumped to top pay. The ONLY way to pay a route driver in some form of commission based system because it motivates them to perform. That could be salary plus or straight commission. Link to comment Share on other sites More sharing options...
AngryChris Posted August 17, 2015 Share Posted August 17, 2015 Using research to back up facts lol. Okay buddy. The great RJT proved me wrong by citing a single Craigslist post as his credible evidence. That's some great research you did. The media might be offering you a job for that. Link to comment Share on other sites More sharing options...
RJT Posted August 17, 2015 Author Share Posted August 17, 2015 Using research to back up facts lol. Okay buddy. The great RJT proved me wrong by citing a single Craigslist post as his credible evidence. That's some great research you did. The media might be offering you a job for that. Why the hostility? You said their was not route jobs paying more than $10 to $12 an hour. I simply researched what you said and found that was not the case. Maybe you don't like the fact you where proven wrong but I cant help what I found with a quick search. Like I said you may very well be right and some are paying what you said or even less but that does not mean other are not paying more which I showed they are. I am saying if someone wants to find a route job paying about about or more than doing it themselves (if not done correctly) with less risk and headache it is out their. Here is another one paying $650 a week plus Vacation Time, Holidays, Health and 401k (optional) http://columbus.craigslist.org/lab/5128769214.html Like I said might be some paying $10 an hour but others are paying more. Link to comment Share on other sites More sharing options...
SCOTT1963 Posted August 17, 2015 Share Posted August 17, 2015 RJT, I guess we will just have to agree to disagree, I'm not arguing your theory just saying it's not what I am seeing out here. Link to comment Share on other sites More sharing options...
AngryChris Posted August 17, 2015 Share Posted August 17, 2015 Why the hostility? You said their was not route jobs paying more than $10 to $12 an hour. Since you're such a profound researcher, how about you find where I said there were not route jobs paying 10-12. Between myself and Scott, there are two Ohioans telling you that route drivers typically don't make what you claim. I don't know why you cannot accept reality. If I tell you gas prices are currently 2.99 locally, you'll try your hardest to say I'm wrong because you just don't want to believe it. Ohio doesn't have a high cost of living. Just accept it. Link to comment Share on other sites More sharing options...
RJT Posted August 17, 2015 Author Share Posted August 17, 2015 Since you're such a profound researcher, how about you find where I said there were not route jobs paying 10-12. Between myself and Scott, there are two Ohioans telling you that route drivers typically don't make what you claim. I don't know why you cannot accept reality. If I tell you gas prices are currently 2.99 locally, you'll try your hardest to say I'm wrong because you just don't want to believe it. Ohio doesn't have a high cost of living. Just accept it. Try my hardest? I went to CL for two minutes and found what I did. I am not sure how many times I can say YOU ARE PROBABLY RIGHT THAT SOME ARE PAYING WHAT YOU SAID. FYI, I am saying you are right. You seem to have a hard time saying I AM RIGHT (and face reality) after I found what I did. Link to comment Share on other sites More sharing options...
SchligVend Posted August 17, 2015 Share Posted August 17, 2015 Canteen pays 120 dollars a day to their route drivers in AZ Ive spoke with many of their drivers and they say they work min 10 to 12 hours a day Sent from my SAMSUNG-SGH-I747 using Tapatalk Link to comment Share on other sites More sharing options...
RJT Posted August 17, 2015 Author Share Posted August 17, 2015 Canteen pays 120 dollars a day to their route drivers in AZ Ive spoke with many of their drivers and they say they work min 10 to 12 hours a day Sent from my SAMSUNG-SGH-I747 using Tapatalk Is that a Canteen franchise or corporate owned? Canteen usually always pays a commission type pay plan. Link to comment Share on other sites More sharing options...
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