Popular Post GotLocs Posted August 28, 2009 Popular Post Share Posted August 28, 2009 Stop Locating! You don't need any more stupid accounts! It may be a bit self-destructive given the fact that I own a nationwide locating service but, the truth is the truth, and it must be told. "I would like nothing more than to place another 250 accounts for you 'Olivia Operator' but I cannot in good conscience place any more equipment for you. You need to stop locating. You don't need any more stupid accounts!" Here's the story: Olivia Operator told me she wanted to make a sizable investment in to a new vending business. Her goal was to make profits from owning and operating bulk vending machines. It was only 7 months after we started the process of carefully buying a very significant quantity of low cost, plastic candy machines and placing them in high traffic businesses around her metropolitan home. She, her husband and two sons were restocking them on a monthly basis. We had already spent nearly 70% of her intended investment when she enthusiastically called and asked if we could go out and acquire another significant quantity of new accounts...she wanted to spend the whole wad! She was going to go the distance and really make money from her vending business when we told her some unexpected news..."You need to stop locating. You don't need any more stupid accounts!" As much as I wanted the business...and, Lord knows, I love to spend a whole "wad" of money any chance I get, but I had to remember...she wanted to earn profits by owning and operating bulk vending machines...not just candy...not just gum...not just toys..."bulk vending machines" (any kind of bulk vending machines). There starts the process. I was reminded of the second location I ever acquired for my vending route 19 years ago. My enthusiam was high. I was ready to go get the whole world and I managed to acquire a store called, "Check Out Video" in Northern California. It did $12 in the first day of operation...$18 in two days...$52 in the first week...$133 in two weeks!...and YES, I checked all those days! I was overwhelmed and knew I had something good. I quickly spent my rent money on another 2 Oak heads and a single pipe stand for a mere $650 (I was new!!!). I tried for the next 2 weeks to convince a store (any store) to accept that machine. NOBODY but nobody would agree to take it. Finally, not knowing what else to do with it I asked Check Out Video if I could put this one in the store as well. They agreed and the rest is history! Why? Well, from that day and for the next 2 years, Check Out Video paid the rent on my apartment. I wasn't aware that I had just learned one of the most valuable lessons in building a customer based business..."THERE IS NO BETTER CUSTOMER THAN THE ONE YOU ALREADY HAVE!" As I mentioned in a previous post, on occasion (wearing a different hat) I have opportunity to sit alongside major players in the business world. It has been surprising to learn that such significant portions of marketing budgets are allocated to influencing customers they already have. The reason is simple. Think about a ground-based hand water pump. For those of you who have never been out of the city, some people acquire their drinking water from ground acquifers using a large metal arm hand pump attached to pipes that help pull water up to the surface. It takes a lot of pumping to get the water to start flowing, but once it starts all you need to do is occasionally gently pump the handle once or twice and the water keeps flowing! Back to 'Olivia Operator'. We opted instead to help Olivia upgrade her machinery. First, we selected the highest producing locs to "run" with. We pulled 20% of her slowest producers and added them to the highest producing accounts (thus lowering her total number of locs) and amazingly, her gross sales and profits both increased! We then began spending money to acquire larger (more professional, higher quality) machinery to replace the plastic machines in the best accounts. After only a modest amount of work and 10% more investment, she had doubled her gross sales and nearly doubled her profits. Currently, 'Olivia' is one of the most profitable (per stop) bulk vending operators I have ever met. Certainly, there are many who can give suggestions about specific upgrades, but I just thought I would mention something quickly lest you forget that "THERE IS NO BETTER CUSTOMER THAN THE ONE YOU ALREADY HAVE!" 8 Link to comment Share on other sites More sharing options...
sherlock Posted August 28, 2009 Share Posted August 28, 2009 GREAT post. I had to learn this lesson the hard way with another business venture. Gave you a respect point for that one! Link to comment Share on other sites More sharing options...
Faith Vending Posted August 28, 2009 Share Posted August 28, 2009 As they say location, location, location!!! Great post. I have learned my lesson about stupid locations. I would give you respect but how do I do it? Link to comment Share on other sites More sharing options...
chrisdunn77 Posted August 28, 2009 Share Posted August 28, 2009 wow, great post and def something to think about. thanks for your time and knowledge. Link to comment Share on other sites More sharing options...
caserri Posted August 28, 2009 Share Posted August 28, 2009 As they say location, location, location!!! Great post. I have learned my lesson about stupid locations. I would give you respect but how do I do it? Upper right corner of his post. Click the UP arrow to give a measure of respect. Link to comment Share on other sites More sharing options...
whaletail116 Posted August 28, 2009 Share Posted August 28, 2009 Good stuff. Please keep it coming. Link to comment Share on other sites More sharing options...
West Coast Vend LLC Posted August 28, 2009 Share Posted August 28, 2009 This post is so true. The best thing to do is build up the accounts you have first before moving on to other locations. It's a lot easier because: #1 You already know if the business is going to do better with more equipment. #2 You already know what type of customers are buying your products, (age group, male/female) #3 You already know what type of products to add that will increase sales, (toys, candy, etc.) #4 You already have a good rapport with the owner/manger. #5 You will save gas by not driving to another town or city. Gary Link to comment Share on other sites More sharing options...
Jax Snacks Posted August 29, 2009 Share Posted August 29, 2009 Many good points! Upgrades and downgrades are an important part of the business. I keep a color coded spread sheet of all location zones. The locations in red are to be whacked and the ones in blue need adjusted. Jax Link to comment Share on other sites More sharing options...
BudLeiser Posted August 31, 2009 Share Posted August 31, 2009 Upper right corner of his post. Click the UP arrow to give a measure of respect. I wonder how many times someone has tried to click the up arrow next to me, and clicked down by accident. Original post: This business is about new locations not old ones. Just leave the machines there service them once or twice a year and go get new locations! Jax - Whatcha up to this week? Got time to hang out? We could go eat at Brooklyn Pizza for lunch or early dinner, its next to my regular job and you can service your machines, and patronize your business partner. All at the same time! Wow talk about efficient. Link to comment Share on other sites More sharing options...
GumBall*BOY Posted August 31, 2009 Share Posted August 31, 2009 That is such great advise... I will definitely keep that in mind on my venture. -Thanks. *Respect +1 Link to comment Share on other sites More sharing options...
sbishop Posted September 3, 2009 Share Posted September 3, 2009 I keep looking at deals for more machines on ebay and craigslist. The funny thing is that I have 10 machines at the house. More important than that is that 50% of my locations generate 80% of my revenue. Why do I need more machines? What is telling me to buy more machines? I have no idea! I still ahve to fight the impulse to hunt for good deals when I need to be hunting for better loations for my machines or looking for ways to increase the revenues from my current locations. Great Post! Link to comment Share on other sites More sharing options...
Faith Vending Posted September 3, 2009 Share Posted September 3, 2009 You do need to grow your business with new business, however. Just not stupid new biz. Quality of location will determine more than anything else if you succeed or not IMHO. Knowing what is a quality location, how to get it, and then keep it producing is a make or break part of vending again IMHO. This will take time and a solid capital backing. Link to comment Share on other sites More sharing options...
kleanride Posted November 21, 2009 Share Posted November 21, 2009 Great post and advise! Being new, this is the sort of thing I want to hear! To be honest, the 'more locations' state of mind is where I have been the past few weeks, so this certainly reeled me back in! Thanks! Link to comment Share on other sites More sharing options...
Mikey B Posted November 22, 2009 Share Posted November 22, 2009 although I am in full line, GotLocs post is true for all aspects of vending. I was location happy and bought a couple single locations. I upgraded to a nicer/bigger snack machine to replace one that kept breaking. My income rose roughly 65% within the first week from that one machine. So I have upgraded serveral locations with success. Great post GotLocs! Link to comment Share on other sites More sharing options...
Benjiman Brutus Posted December 10, 2009 Share Posted December 10, 2009 May I ask how many member you have located for? Link to comment Share on other sites More sharing options...
alyssamma Posted December 10, 2009 Share Posted December 10, 2009 Benjamin, first, welcome Second, not sure if you are going to get an answer...I haven't seen GetLocs posting on here for a while... Kevin Link to comment Share on other sites More sharing options...
JPVendCo. Posted December 10, 2009 Share Posted December 10, 2009 May I ask how many member you have located for? He hasnt been back for 3 months..... Link to comment Share on other sites More sharing options...
will.vend Posted May 18, 2010 Share Posted May 18, 2010 Upper right corner of his post. Click the UP arrow to give a measure of respect.Steve...is this still available on post? am I just not seeing what up arrow to click? Link to comment Share on other sites More sharing options...
Quarter Master Posted May 18, 2010 Share Posted May 18, 2010 The "Respect" function has been discontinued due to abuse by some members. Link to comment Share on other sites More sharing options...
will.vend Posted May 18, 2010 Share Posted May 18, 2010 ok thanks Link to comment Share on other sites More sharing options...
Guest ontheballvending Posted July 23, 2010 Share Posted July 23, 2010 This is right on target. We do our best to always start small in each location, and build it from scratch. Once we learn the traffic and the purchases, we decide to add more equipment or improve what we have at each location. You can turn 50 locations into 200 locations or placement of equipment, just by maximizing each location you already have, and you have less people to deal with. Thanks! Scot Link to comment Share on other sites More sharing options...
vendguy Posted August 4, 2010 Share Posted August 4, 2010 Great ifo. thanks for your insight. Link to comment Share on other sites More sharing options...
Tilby Posted September 14, 2010 Share Posted September 14, 2010 This is not only really good advice in vending and business but the principle is true of most things in life. This concept comes from a nearly forgotten Industrialist/Economist, Vilfredo Pareto, and the idea is quite simple. From a vending perspective: 80% of your good results will come from 20% of your locations. So too.. 80% of your problems will come from 20% of your locations. It's just an issue of nurturing the best and chucking the rest. The idea works for anything from coffee plant production to employees. Further reading: http://en.wikipedia.org/wiki/Pareto_principle Link to comment Share on other sites More sharing options...
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