My wife and I chose to jump into the deep end of the pool with candy honor boxes. After having watched Youtube videos all summer and doing research in other ways, including here at Vendiscuss, we bought 50 pink ribbon honor boxes from Sheridan Systems. They arrived on August 31. We are lucky enough to live in one of the fastest growing suburbs in the United states just outside a large Midwestern city. Our community is currently around 20,000 and expected to grow to 60,000 over the next decade. The Urban area is approximately 600,000. We literally have strip malls popping up all around us.
So, couldn't decide whether to use the Sheridan locator for $14 per box or not, but really wanted to give locating a try myself. I'd had some experience 25 years ago with door to door sales, having worked for Schwann's Incorporated as a route salesman for two years. Glad I didn't spend the money on the locator service, I ended up locating 42 boxes over the course of four evenings and a total of seven hours of locating time. The boxes basically locate themselves. I received a Yes from 2/3 of the businesses I approached. A "yes" or "no" is usually forthcoming within the first 30-60 seconds of the conversation. I keep the sales pitch short and to the point.
"Hello, I'm so and so and I own Two Rivers Snacks. We are a vending business and we partner with Candy for a Cause. We place honor boxes in businesses and a portion of the proceeds support breast cancer research. Your customers or employees simply put some money in the box and take out a few pieces of candy. We'll stop by every week or two, depending on demand, to exchange boxes." I almost always get an immediate response. A few have further questions about how the charity portion works, but not many.
Today marks day 17 since placing our first boxes and we have now made one collection from each and every box placed. I have placed a total 48 locations, lost 4 locations, and pulled one location for theft. Boxes averaged being out 10 days upon first collection. Our total revenue so far is $344. After the first collection, we are on track to gross an average of $24 per month per box. Given our research and our projections, we figure we will end up pocketing about $6 per box after the costs of doing business and our donations to charity.
Here is a rough estimate of our expectations:
Out of every dollar sold:
.07 for State and Local Sales Tax
.30 for the Cost of Goods (COGS)
.06 theft (20% theft)
.03 box depreciation (considering a box will last us one year, have no clue whether that is the case)
.04 donation to Sheridan/Candy for a Cause
.07 donation to local charity (a choice on our part, we realize)
.16 Personal Income/Self-Employment tax
Yeah! Here we get to the good part
.25 per box PROFIT. Yep, that's right. If we do this business "honestly", pay our taxes, consider our costs, and make what we consider to be an appropriate donation; we get to keep 25 cents on the dollar.
I think this is important to note because I believe that a lot of people might be watching youtube videos and seeing loads of cash being emptied out of boxes and not taking into consideration what running a business the right way really means.
Now, to the bad part. We were hoping for/anticipating/expecting 20% theft on goods sold. Through our first round of collections, we have actually experienced 32% theft. Out of the 48 locations, we can say a good portion of the theft has come from 5-6 locations, one of which I pulled after finding almost all theft. Yep, 87 pieces of candy missing from the box (should've meant $29 in revenue) and only $5.50 in the box after 10 days. Went back a second time after 4 days and found 28 pieced of candy missing ($7) and only $1.50 in the box. It was a national auto repair chain. I explained the situation to the assistant manager and stated I would be back during the week to offer a bulk vending machine.
I guess we've been a bit surprised by the theft and appreciate any suggestions. We are running a variety of boxes. Boxes filled with 60 pieces of Mars candy and 18 pops, boxes filled with 70 pieces of dove/hershey candy and 28 pops, boxes with 45 York mints and 28 pops, boxes with 63 pops (only a few).
Sorry to be long-winded on my first post, but this is exactly the kind of information I enjoyed reading and learning about throughout the summer on this forum. Looking forward to getting the theft under control, earning some money, and turning this income stream into even more profitable and passive revenue streams including bulk and bubblegum.