Bulk vs Full-Size

[Sgolembiewski0903]

It seems that bulk vending has some SERIOUS advantages over full-size, it is cheaper to get in to, easier (less expired goods, easy-to-move machines), easier to find a location, a non-box-truck vehicle will work for a very long time, etc.....(Did I mention easy-to-move machines?!)

Unless someone wanted to get very big (i.e. Full-Size machines at high volume locations), it seems to me that bulk vending would be the way to go. 

Just kind of thinking out loud here, but I must admit when I think about how much I've spent getting my full-size business started up the proper way - I think about a bulk business and the dollar savings really start adding up! 

 

 

[vendtex]

One of my bulk locations generated 25 cents last month. Just saying.


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[twopawsup]

need to load that place up with more machines....you tearing it up...LOL

 

[QuikVend]

Well I'll give you my thoughts,  seeing as I started in bulk and expanded into full-line. 

Bulk is cheaper to get started in, easier to move machines, simpler product mix and requires less time per month to service. 

One of the downsides are the volume of money coming in. I didn't start really growing my business until I got into full-line. I started with a small 12 location route in October 2015 and have grown to 165 bulk locations, 25 honor box locations and 16 full-line accounts as of now.

My best candy only location does about $45/mo. My best full-line accounts are in the $300-400/mo. range. They do require more of a time and capital investment, but they generate cash at a much higher volume. 

Of course the other downside is making 25 cents in a month, which is very frustrating. 

They both have their advantages. It comes down to how you want to make money. I personally really enjoy bulk vending. It's a very simple way to make a buck. Not to say I don't like full-line though, something about pulling wads of cash out of a machine is appealing lol. 

[QuikVend]

Another thing is, I find it easier to talk to locations about full-line machines. They know what they're getting with a soda machine without much explanation. A bulk machine usually requires a picture or a bit of an explanation. 

[AngryChris]

I have never done bulk but I have done honor boxes for about 2 years and I have been in the vending industry for about 11 years while being in business for myself for 7 of those 11 years.  Honor boxes, bulk vending, and full-line vending all have their advantages and disadvantages.  

Honor boxes are the absolute CHEAPEST to get into and margins can be decent but you can easily max-out at something like maybe $40/hour and that's completely full-time and does NOT include the cost of a vehicle.  Yes, $40/hour is good, but you'll be working pretty hard between servicing boxes and finding replacement customers when you lose customers.  If you aren't going out every week looking for new customers, you'll fizzle out with honor boxes.  Realistically, you can expect $15-$20/hour with honor boxes if you have your own vehicle, and people seem to look down on you from my experiences.

Bulk vending, from my knowledge, is far less expensive than full-line but more expensive than honor boxes.  Theft is usually not bad (ie. no one steals your product and machines don't get stolen too often from what I hear).  Margins are probably on par with full-line (maybe 25-40%??) but that's because you often have to pay a hefty commission for a prime location.  The primary advantage in bulk-vending is that you can collect a lot of money in a short period of time with very little overhead.  I can't give you numbers because I don't know enough, but I am familiar with some vendors who sit back for 3 weeks at a time and run a 1-week-long route and collect a couple thousand dollars.  The primary disadvantage, from what I understand, is that you need a LOT of locations to really make much money and you have to be careful about not putting too much product in the machines but also not making them look too empty.  I think I have heard that you can expect many locations to collect as little as $7/month in sales whereas a good location does $25/month in sales.  When you have 200+ bulk vendors, you can actually make a little money, but that's not going to happen overnight and tracking machine sales could be a little cumbersome.

Full-line is obviously the most expensive but it has its perks.  As with any of the three mentioned vending types, having good locations is everything.  I will say though that THIS is the reason why I stick with full-line: One good location with a snack and can machine can easily generate $200/week in sales.  Even at 25%, that's $50/week in profit.  Furthermore, you can make that money in less than an hour if you're fast.  In reality, I can restock $200 worth of retail products in about 45 minutes and I might profit more along the lines of $60 after everything is said and done.  Once you factor driving time, I probably require 1 full hour to do such a location,  Regardless, that's $50-$60/hour and I am actually not pushing myself to full speed.  I have done this for 10 years and I am still relatively young.  I can turn on the jets if I need to and probably get in and out in 30 minutes.  The downside, of course, is the investment cost.  The upside, of course, is the money you can make.  

The outcome REALLY depends on how good the locations are, how dense your area is, how efficient you are, and how good your prices are.  If you are selling everything dirt cheap.. then you can't expect to be able to comfortably buy nice equipment and turn a nice profit.  Economics is a real thing, and sometimes you can make more by lowering your prices, but there's a point at which it doesn't matter.  As an example, maybe at 35 cents per can, you can easily sell 3 sodas per customer for a total gross of $1.05.  Maybe at 50 cents, you'll sell 2 at a total of $1.00.  Maybe at 75 cents, you only sell one.  In all events, your product costs 30 cents each, not including tax.  Three sodas cost 90 cents (profit $0.15 for 3).  Two sodas cost 60 cents (profit $0.40 for 2).  One soda costs 30 cents (profit $0.45 for 1).  Selling one soda for 75 cents is more profitable than 2 sodas at 50 cents.  In reality, people will probably only buy one soda regardless of the price.  If you sell the cans for $1.25, you will probably sell nothing and get quickly kicked out, but there is always a sweet spot.  In my case, through growth, cancellations, and various other changes in how I handle things, my COGs and fuel expenses (as a percentage) have gone down a little as my gross has increased.  I am making roughly 35% more profit now than I did last year, which is a huge increase.  I could possibly expect a 10% in profits next year too if I do well.

I'll tell you this: in my 7 years of self-employment, i have seen so many ups and downs on my mental state.  There were SO many times that I wanted to sell out and it just looked as though everyone was always doing better than me.  Even people on this forum who had been doing it for 15 years were making more money than me and that BOTHERED me.  I wanted to make profits NOW, even though I KNEW that I had to wait until I had paid off many loans and grown enough to really make actual money.  I wanted it NOW.  The hardest part was knowing that I COULD be doing something else [right then] and make MORE money.  In the end, I now make the money I have always dreamed of.  I set my own hours.  I make ALL of the decisions.  I don't have anyone constantly barking at me, except for a few annoying customers who have nothing better to do.  Most importantly, I get to enjoy what I do and get paid doing it.  Sometimes I don't feel like I am really working... other times I feel like just going home because I have dealt with too much crap for the day.  The single most important thing that I KNOW about my current mental state is this: I enjoy being a vending operator.  If it weren't for that, I would have gotten out years ago.  Who in their right mind would invest into something that could take YEARS and YEARS to turn into a profitable venture when you could get something else making good money today?  Furthermore, who in their right mind would invest into something they don't enjoy?  If you're only in it for the money, then you need to consider that most businesses struggle the first few years while they get their finances straight (pay off loan, reinvest, etc..).  If you're in it because you like it and you want to live off of it too, then just realize that it gets easier with time but you need to be patient.  Whatever you do, don't start treating every other venture out there as though it's better.  Bulk MIGHT be better, but it might not be.  Vending might not even be your calling.  Who knows.  Decide whether you do it for the money or because you like it and want to make money.  If you know for sure which one you are, then you can decide whether it's worth changing course or not.

I am notorious for long posts, but you are new and you are in that difficult point where you don't know if you made the right decision or not and I think you might find my insight useful.  I think we all went through that.

[Corvus Corax]

Another factor in full line is you can get Coke or PepsiCo to place machines in a location for no cost, if you have a contract with them. The caveat to that is there will be a volume requirement. Also they place machines on their schedule not yours, so you could be waiting for placements. Moving machines is difficult. I have gotten around this by finding a moving company that will place machines for $100 per machine in my area. If I purchase the machine from them it is free. Having said that I have easily dropped 20K into getting full line started. With bulk you can get a lot of equipment for around a $1000 and start locating and earning within 2 months or so. Both roads have their bumps and hurdles.

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[AngryChris]

You can't get leased machines that easily in every region. Also, coke and Pepsi do not allow foreign product in their machine. It's a good deal if you have the numbers.

[Corvus Corax]

I agree, I was putting it out there as an option. I know from experience a free machine isn't always as good as it sounds. Waiting 2 months to have a machine installed for example.

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[Randymire]

I started as a full line vendor 15 years ago and then became a 3rd part vendor for Coke and then Dr Pepper ( Pepsi will be next ) , I got into bulk by accident by finding machines as cheap as $20.00 and I can't pass these deals up so I started putting a bulk machine here and there on locations that I already had and it worked out great because someone might want something fast or they'd spend .25 or .50 where they might not want to spend the dollar .
Full line is a bigger investment but you'll get a bigger return weekly with the right location and pricing.
A lot of it depends on what you want to invest monetarily and time wise and what you expect in return and how fast you expect that return.


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