brendio Posted December 30, 2015 Share Posted December 30, 2015 I got a letter yesterday from my largest account to say they no longer require my services. Eight machines to move and store and $45,000 gross revenue per year gone! I only took over the machines as part of a larger run nine months ago, so it hasn't had the chance to pay off the purchase price yet. The only positive is that the account is the furthest from home (80 miles), so I won't have as far to travel any more. I have a feeling I've been working really hard all year only to be copping a loss on my investment. Once every month or so I've had a sinking feeling when dealing with callouts for breakdowns and I have got through it, but I'm wondering whether vending is worth persevering with? How do others deal with cases of vending blues? Link to comment Share on other sites More sharing options...
Golfdogs Posted December 30, 2015 Share Posted December 30, 2015 I got a letter yesterday from my largest account to say they no longer require my services. Eight machines to move and store and $45,000 gross revenue per year gone! I only took over the machines as part of a larger run nine months ago, so it hasn't had the chance to pay off the purchase price yet. The only positive is that the account is the furthest from home (80 miles), so I won't have as far to travel any more. I have a feeling I've been working really hard all year only to be copping a loss on my investment. Once every month or so I've had a sinking feeling when dealing with callouts for breakdowns and I have got through it, but I'm wondering whether vending is worth persevering with? How do others deal with cases of vending blues? Bourbon. Link to comment Share on other sites More sharing options...
RJT Posted December 30, 2015 Share Posted December 30, 2015 The reason you are losing it? Link to comment Share on other sites More sharing options...
lacanteen Posted December 30, 2015 Share Posted December 30, 2015 80 miles is a long way to service such an account. Redeploy the equipment closer, perhaps upgrade existing accounts if needed, then clean these machines and hit the streets in January with ready to set machines. The company I work for has picked up 75 machines in the last 6 months due to outside competition. That sounds like a lot but was only 2% of our total base of machines on location. Accounts we lost 3 years ago are calling us back as well, so don't burn any bridges. Play nice, play fair, have a little bourbon, start selling yourself January 18, 2016. (give your potential customers a chance to launch their new year) Good luck! Link to comment Share on other sites More sharing options...
Anacapa Vending Posted December 30, 2015 Share Posted December 30, 2015 The monent you start signing accounts is the moment you start losing accounts. Learn from it. Keep your standard for equipment high to keep accounts happy. You will find other accounts. Its part of every business. .. best of luck. Link to comment Share on other sites More sharing options...
CajunCandy Posted December 30, 2015 Share Posted December 30, 2015 Losing accounts is just as bad as employers laying off employees, due to the slow down in drilling for the south united states. Locations here is reducing people, to a point where I have to leave some rows empty, instead of a five wide I now have a four wide and if gets worse a three wide machine. As lacateen said be nice, play fair. Not all locations is right for all vendors. Hit the road and fine location for machines for machines you pulled. cajun Link to comment Share on other sites More sharing options...
brendio Posted December 30, 2015 Author Share Posted December 30, 2015 The reason you are losing it? I'm still trying to find that out. I did raise prices for 375 mL cans four months ago, which a lot of employees were not happy about, but it needed to be done and the price is still the lowest in my fleet. I know they were looking at other vending providers back then. 80 miles is a long way to service such an account. Redeploy the equipment closer, perhaps upgrade existing accounts if needed, then clean these machines and hit the streets in January with ready to set machines. The company I work for has picked up 75 machines in the last 6 months due to outside competition. That sounds like a lot but was only 2% of our total base of machines on location. Accounts we lost 3 years ago are calling us back as well, so don't burn any bridges. Play nice, play fair, have a little bourbon, start selling yourself January 18, 2016. (give your potential customers a chance to launch their new year) Good luck! The plan always has been to expand closer to home. I am looking to sell off other accounts in the town where I lost the account. Losing accounts is just as bad as employers laying off employees, due to the slow down in drilling for the south united states. Locations here is reducing people, to a point where I have to leave some rows empty, instead of a five wide I now have a four wide and if gets worse a three wide machine. As lacateen said be nice, play fair. Not all locations is right for all vendors. Hit the road and fine location for machines for machines you pulled. cajun I have another account that looks like that. Never seems to be that busy on the production floor when I go there any more, and sales are down a lot compared to previous years sales from the previous vendor. I have 8 machines in that one, which is more than it needs now. Link to comment Share on other sites More sharing options...
Walta Posted December 30, 2015 Share Posted December 30, 2015 Keeping accounts is almost always about the personal relationship you have made with the people. When people think about vending they think about machines. I say make it your goal to turn that around and get everyone that uses your machines to think of you and the good service you provide them. It can be the smallest of things that damage the relationship, the tone in your voice when answer the phone for an 160 mile service call, the look in your eye when someone requests a refund, where and how you park your truck. The most important thing put this set back behind you and put a smile on your face and not start a negative cycle. Walta Link to comment Share on other sites More sharing options...
RJT Posted December 30, 2015 Share Posted December 30, 2015 Did you get approval on the price increase? Link to comment Share on other sites More sharing options...
brendio Posted December 31, 2015 Author Share Posted December 31, 2015 Did you get approval on the price increase? Yes. It was a hard slog. I wanted to increase more and we compromised in the middle with a trial period and promise of a longer contract after that. Link to comment Share on other sites More sharing options...
RJT Posted December 31, 2015 Share Posted December 31, 2015 Yes. It was a hard slog. I wanted to increase more and we compromised in the middle with a trial period and promise of a longer contract after that. I am a little confused. Where you currently under contract? I can only assume you "negotiated" with the correct person? Have you ever negotiated things like this before? Did you have experience or knowledge of how to negotiate it prior to going into it? You need to find out the who, what, etc of why you lost it. You need to have an exit interview and find out the details. Sometimes they are honest and sometime they just give a canned answer of "we were just wanting to try something new". With all that aside let me say I would never have done this account and suggested to anyone of my consulting clients against doing it. 80 miles one way with that type of revenue is a disaster unless you have other accounts in the area that make it worth the time. It is a service call nightmare, and tough to service at that distance. If it is a done deal, pick up the equipment and leave on a good note by thanking them for their business and hope you can earn it back in the near future. Lick your wounds and move on by getting the machines placed back out in quality accounts as soon as possible. If you can handle loosing accounts you have no business in vending because it is going to happen even to the best vending operators. You will loose accounts due to know fault of your own because certain accounts are never happy with who they have and will switch every few years. Sometimes a new person takes over (decision maker) and wants to make changes. Link to comment Share on other sites More sharing options...
brendio Posted December 31, 2015 Author Share Posted December 31, 2015 A bit of history: I took over this run in the town 80 miles away with 40 machines in total. The account I lost was the major attraction of the run, with one machine there grossing $18000 per year. No site contracts transferred from the previous owner (i.e. he was past the fixed contract period). They contacted me after a month or two to discuss a contract. I mentioned at this time wanting to increase the price on the canned drinks (snack prices were fine) as part of a fixed contract. The "correct person" was actually a social club committee, and I only ever met two of the members, but it seems like the decision was put to all the members of the social club. I have not negotiated anything like this before, and I can't say that is my strong suit. I learned along the way and lost one other (small) account by putting prices up (was prepared to walk on that one), almost lost another but saved it with higher commission, and had no troubles raising prices at a few other accounts. Some background on prices this side of the pacific: my cost of goods from suppliers is 74 cents for coke and 50 cents for Pepsi products (I get a buying group discount). Coke is the main seller. All drinks are sold at the same price, despite the difference in cost price. Most locations get 20 cents per vend commission (as per agreement with the previous owner). At an average cost of goods around 65 cents, I figure a minimum sale price to keep me in business is double this ($1.30) plus the 20 cents commission = $1.50. The previous owner had prices set at $1.20. I was at $1.40 for four months until now. The price of a cold coke in a shop is $2 - $2.50. Back to the account. I know when I suggested raising prices as part of a new contract that they were looking elsewhere because I was contacted by a site finder offering me the account, even though I already had it. The site locator put me on to another operator, who was doing the negotiations. In hindsight, I probably said too much to this guy. Although he said at the time that he was not interested in the account himself because of the distance (he is probably another 50 miles away than I am), I was contacted by him on our version of CL last month. I don't think he realised that we has spoken previously, but he responded to an ad I had selling some surplus machines to ask if I had any sited machines for sale in the town where the account is. So I suspect he has had a change of heart and convinced the social club to change vendors. I don't know any of this for sure, and I know it is just business, but it still gives me a sick feeling in the stomach thinking about the impact it will have on my business. Expensive learning experience, I know. In regards to the service call nightmare, I am totally with you on that, and it is some comfort that I will be able to cut down a bit of travel. In hindsight, I would not have bought the full run. I was kind of talked into it by the previous owner after I bought the machines he had in my town. The positive of it is that I got a lot of spare parts and machines that I have been able to find sites for some. The focus going forward is getting sites closer to home. I still have 26 machines at 15 sites in this town 80 miles away, but will now try to sell that off. I am still unsure longer term whether I want to stay in this game. I quite like the technical side of things and troubleshooting machines, but I do tend to stress out and worry a bit much and wonder whether I don't have the right temperament for business. I've lost five vending accounts and a few accounts in my amusement business, so this isn't the first account I have lost, but certainly the most significant. It was 25% of my revenue. Link to comment Share on other sites More sharing options...
deee_z Posted December 31, 2015 Share Posted December 31, 2015 How much was this route when you bought it? Link to comment Share on other sites More sharing options...
brendio Posted December 31, 2015 Author Share Posted December 31, 2015 How much was this route when you bought it? $130,000 Link to comment Share on other sites More sharing options...
deee_z Posted December 31, 2015 Share Posted December 31, 2015 That route is still making a decent living, I just don't care for the drive you are making to service it. Link to comment Share on other sites More sharing options...
EdsVending Posted January 3, 2016 Share Posted January 3, 2016 Tough to service accounts so far away. I'd be dreading a call for a bill jam. Link to comment Share on other sites More sharing options...
TKK Posted January 3, 2016 Share Posted January 3, 2016 That happened to me. Lost 5 chain laundromats that were bringing in 4k a month which was about 40% of revenue at the time. When i had just gotten a 700 a month warehouse and a part time employee. Had to let him go. Hit the pavement w the machines and now im back to how it was. But its definately an ugly feeling. Especially knowing you could have maybe sold it a few months ago or so Link to comment Share on other sites More sharing options...
Goldstar Vending Service Posted January 7, 2016 Share Posted January 7, 2016 Chin up, I know its hard when you lose a big account. Don't know if it will make you feel any better but although the turnover was good the amount you get to keep was a lot less. Going by what you have told us you would be paying GST based on your turnover. If coke sells 2/1 Average ratio cost of goods .66c-.06c GST= .60c. Sell 1.40-.13cGST-20c com = 1.07-.60 cog=.47c per can profit and this is before fuel, insurance ect. You were right too put the prices up from 1.20. Sometimes a site has low prices for so long they become unrealistic.Buying an account were the prices are low means you will want or have to put them up sooner and it increases the risk to you. This must be reflected in the price you pay for the account but as others have said move on, upgrade machines at your other accounts if needed and get accounts closer to home. Link to comment Share on other sites More sharing options...
Refreshments Made Easy Posted January 7, 2016 Share Posted January 7, 2016 That's why I am so afraid of buying accounts. For example: A friend of mine purchased a location for $2500. A 150 unit apartment building with 3 machines. He had it for 2 months and guess who they happened to call to get him out of there? Me. Long story short: I met with management and negotiated for my friend to keep the location with a lower commission and as long as he upgraded the machines 1 AMS Sensit 3 refrigerated, RVV500. All worked out and he was ecstatic that I done that for him. The way I will use the $2500 is to go find my own locations and purchase numerous machines for $2500 and sell a few and keep some for my new locations. I maybe wrong but that's what I am comfortable with. I absolutely agree with Walta regarding customer service, body language, etc. "I say make it your goal to turn that around and get everyone that uses your machines to think of you and the good service you provide them. It can be the smallest of things that damage the relationship, the tone in your voice when answer the phone for an 160 mile service call, the look in your eye when someone requests a refund, where and how you park your truck." anguage, etc. Brendio you will overcome this lost. Link to comment Share on other sites More sharing options...
brendio Posted January 8, 2016 Author Share Posted January 8, 2016 Thanks everyone for the advice and encouragement. It is definitely a learning experience. I'm feeling better about it, although still have my moments of feeling down. I think it will be better once I have collected the machines and can put it behind me. I got an email back from the account with more information on their decision, saying they wanted more food variety and more reliable machines so the members decided to go with another company. It's a bit frustrating dealing with expectations for both cheap drinks and reliable service. At low prices, I am not making enough money to afford to upgrade with newer, more reliable machines. I will try not to burn any bridges and move on from this. Link to comment Share on other sites More sharing options...
EdsVending Posted January 8, 2016 Share Posted January 8, 2016 Once you get those machines placed closer to home you will be much better off. The larger accounts are great but I always feel uneasy knowing that if I lose one my business could take a substantial hit. I try to somewhat diversify my accounts. My largest is maybe 6 percent of my business. This temporary setback will allow you to diversify your business. Good luck to you this year! Link to comment Share on other sites More sharing options...
deee_z Posted January 8, 2016 Share Posted January 8, 2016 If they want cheap drinks, get SAMs cola or Walmart great value soda. Link to comment Share on other sites More sharing options...
brendio Posted January 8, 2016 Author Share Posted January 8, 2016 If they want cheap drinks, get SAMs cola or Walmart great value soda. I'm sure that would would be cheaper to buy, but I think shipping them 8400 miles would be a killer Link to comment Share on other sites More sharing options...
TKK Posted January 8, 2016 Share Posted January 8, 2016 Thats why ive been souping up my route with a bunch of $600 to $1500 a month locations with good newer equipment. That way you lose one or two and your survivable Link to comment Share on other sites More sharing options...
brendio Posted January 29, 2017 Author Share Posted January 29, 2017 Just thought with over a year gone now I would update this thread. I wasn't very motivated with resiting machines, but have slowly been picking up new sites. I have repainted the three AMS machines and they are all out on sites again. One site didn't like my refurb and wanted a new machine, which was a drama to get, but the site is doing well and that machine is now also on another site. I think we are back to where we were in terms on income with not as many machines out and closer to home, so a bit more manageable. We haven't been drawing any wage yet, so have been working for free all this time. We've had some big expenses recently with upgrading note acceptors and telemetry because of two factors: 1) Introduction of new bank notes and 2) major telecom carrier shutting down 2G network. These have costs maybe $15-20 grand in upgrades. If I could, I would sell my full line arm to focus on my amusements business, which has taken a back seat of late, and to pursue a possible employment opportunity coming up. However, I think running the business for another year or two would allow the benefits of a lot of changes we've made to flow through to the financials to be able to command a better selling price. Oh, also, this account we lost has also been looking at changing vendors again. I was contacted by some "national" vending importers about whether I service the location. They were close to securing a national contract for all the companies sites. I'm not sure what eventually happened of it, and was unsure whether I was willing to take it on again, as it would have involved buying new and unfamiliar equipment. Link to comment Share on other sites More sharing options...
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