Honor Boxes

[mission vending]

Looks like they are catching onto dogcow's lil secret. A full length story in Automatic Merchandiser

Click here

[RJT]

I have a whole chapter in my book about honor boxes. I think it is a great way for people to get started in vending on a shoe string budget. I also think it is a low risk option to see if being your own boss is for you. The average honor box cost about $40.00 (or less) including the box and product. For the average price of one used snack machine ($1200.00) you could have 30 honor box locations.

I think it is a great option for start ups or to add to your current business and do both full line and honor boxes like the company in the acrticle. IMO it would go great with an office coffee route.....

[BorderJerry]

The other aspect about honor boxes is it the best way to find those surprising locations that actually will support a vending machine...honor boxes are the most affordable and accurate way to 'test the demand' of a 'new to vending' location, much better than just putting in a machine and hoping for the best. This technique really allows you to leverage your 'shoe string budget' and make sure that when you do jump to the higher capital machines your first few locations will be winners...and you can do this without having to bid / compete directly with the well established large companies (important when you are new to the biz).

[BobTHJ]

I'm also quickly finding that honor boxes will sell nearly twice as much product as a vending machine in the same location. Admittedly, the margin per-item is lower (factoring in theft) but overall I appear to be netting more from an honor box then I would a 3 or 4 wide snack machine or a mechanical table-top model with less spoilage.

[dogcow]

I'm also quickly finding that honor boxes will sell nearly twice as much product as a vending machine in the same location. Admittedly, the margin per-item is lower (factoring in theft) but overall I appear to be netting more from an honor box then I would a 3 or 4 wide snack machine or a mechanical table-top model with less spoilage.

yeah mainly mechanical machines cant take bills or nickels and dimes, pennies,$1 coin,etc.. yes i have found $1 coins in the honor box a lot of times LOL

I have a whole chapter in my book about honor boxes. I think it is a great way for people to get started in vending on a shoe string budget. I also think it is a low risk option to see if being your own boss is for you. The average honor box cost about $40.00 (or less) including the box and product. For the average price of one used snack machine ($1200.00) you could have 30 honor box locations.

I think it is a great option for start ups or to add to your current business and do both full line and honor boxes like the company in the acrticle. IMO it would go great with an office coffee route.....

where do you get $40 from?

my boxes are under 10 bucks filled for the most part, it holds about 32 items (including cost of the box)

[RJT]

yeah mainly mechanical machines cant take bills or nickels and dimes, pennies,$1 coin,etc.. yes i have found $1 coins in the honor box a lot of times LOL

where do you get $40 from?

my boxes are under 10 bucks filled for the most part, it holds about 32 items (including cost of the box)

I was basing that number on the larger boxes that hold close to 80 plus items along with the price of the box itself. Like I said "or less" depending on what you stock it with, the size of box, etc, etc. It was just a number as an example in general. More candy higher cost to fill, less candy more crackers achips less money to fill......

[BobTHJ]

I stock my boxes with 100-120 items (depending on mix of chips/pastries to candy/salty snacks). If I went all candy I could probably fit 200+ items. My computer system is set up to add each box to my route list for service when it is half empty which averages to roughly 14 days across all my boxes (some are weekly, some are monthly or longer).

[dogcow]

I stock my boxes with 100-120 items (depending on mix of chips/pastries to candy/salty snacks). If I went all candy I could probably fit 200+ items. My computer system is set up to add each box to my route list for service when it is half empty which averages to roughly 14 days across all my boxes (some are weekly, some are monthly or longer).

whats ur avg cogs for the whole box , and ur avg loss % ...are u charging $1 for everything?

im always curious how other people are doing with these.

none of my locations except 1 would work with that size box, i findf that most places dont have enough "real estate" in the break room for anything but a very small one.

[lakevending]

I put 65 items in every box I got the ones made by Sheridan Systems because I got tired of making them myself), my COGS is about 40%, but it varies a little. One of my places buys a ton of candy and not much else so that one has a higher COG, and one of them buys a ton of pastry items and has a lower COG. Everything is $1 to make it real easy for me. And so far I haven't had any theft. None. They're all in public areas (with constant employee presence though) and people have been really honest about it. My autobody place said they really like it, especially because they can use pennies and larger bills in there. They also use it to make change when they're running a little low. Helps me out too because there's less change for me to count.

For some reason chips don't sell worth a darn for me. I'm gonna throw some different stuff in there next week (got some Stacy's Pita Chips and veggie sticks) to see if they do better. I had to toss a ton of chips when they just wouldn't sell

[mission vending]

I would guess that its the value proposition that is killing your chip sales. People pay over 1.00 for candy bars at the local corner store. For that same dollar that can get a LSS size bags of chips. You are charging the same price for a smaller bag. I'd suggest trying chips at .75 and see if that makes a difference.

[dogcow]

I would guess that its the value proposition that is killing your chip sales. People pay over 1.00 for candy bars at the local corner store. For that same dollar that can get a LSS size bags of chips. You are charging the same price for a smaller bag. I'd suggest trying chips at .75 and see if that makes a difference.

heres the problem with using odd pricing. What ends up happening is almost nothing in the higher priced bracket sells and all of the lower price stuff sells. Eventually people just request u put only the cheaper items in. Also theft tends to be more, and odd amounts because someone will have 50 cents but take a $1 item and forget they owe the rest.

I have tried split pricing (50/1.00 and 75/1.00) tiered pricing (50/75/1.00) and 1.00 only and ive found 1.00 for all does the best for my bottom line. I sell tons of chips and even lance crackers for $1.

I understand what you are saying about the value proposition, if that really appears to be the issue i would try LSS chips instead of charging less for the 1oz ..just a thought.

I put 65 items in every box I got the ones made by Sheridan Systems because I got tired of making them myself), my COGS is about 40%, but it varies a little. One of my places buys a ton of candy and not much else so that one has a higher COG, and one of them buys a ton of pastry items and has a lower COG. Everything is $1 to make it real easy for me. And so far I haven't had any theft. None. They're all in public areas (with constant employee presence though) and people have been really honest about it. My autobody place said they really like it, especially because they can use pennies and larger bills in there. They also use it to make change when they're running a little low. Helps me out too because there's less change for me to count.

For some reason chips don't sell worth a darn for me. I'm gonna throw some different stuff in there next week (got some Stacy's Pita Chips and veggie sticks) to see if they do better. I had to toss a ton of chips when they just wouldn't sell

how many do you have out? chips are my most consistent seller my biggest complaint usually is not fitting enough in the box. TGIF chips do extremely well for me especially because they have $5 TGIF rebate on them. I have never had a single bag of them come back. I also use the small tins of pringles because it lets me add varieties that lays doesnt carry in 1oz variety pack (sour cream and chedder) those sell OK.

If chips arent selling try lance crackers or other things, the problem is chips is where u make most of your money as i said above try switching to LSS chips you make less per item but volume may increase. good luck

[Big Mike]

For those of you that are using the larger boxes where are you getting them? We have just made our own but I really dont want to keep doing this.

Mike

[loach33]

I'm trying to wrap my head around the numbers of this guys business. Those of you with current routes, maybe you could give some insight. It says he has 2,500 accounts. Without having any honor boxes, I'm going to make a guess that the average gross sales are $5/week or $20/month. That could be low. Is this guy bringing in $50,000/month? Is that low, about right?

Of course, he can't do all this on his own. I'll also assume he's hitting these on average every 7 days. So, that is 350 services each day. The article says he has route drivers and they hit 70-80 in a day. So, let's say he's got 5 drivers including himself. If each guy hits 70 places and pulls out $7 with each box then that's $490. Would his profit be $245 minus what he pays the driver?....$100 + gas? Is he making $100/day with each driver or $500/day?

[loach33]

I've been thinking more and more about starting a route. I have full line machines, I have bulk machines. The idea of basically zero cost to get these going using products I already have is very enticing.

I've read a lot of what dogcow has had to say and it looks like there's a few more people on here who are running a route. My question this time is about where to place these. This article says his niche is places with 20-70 employees. To me, it seems like honor boxes would be for places with 10-20 employees. I have full line machines in places with 25+ employees.

It seems like most places with 25+ employees would have a vending machine. I was out locating for my pop/snack machines yesterday in industrial parks. I would think that those are the places to go for an honor box as long as they don't have a vending machine? No retail counters at those places though.

I assume auto repair places are perfect, but I don't think I've ever seen an honor box except for those that just have suckers or candy in them.

Sorry if its rambling...I have a lot of thoughts now that I've read this article.

[BobTHJ]

I'm trying to wrap my head around the numbers of this guys business. Those of you with current routes, maybe you could give some insight. It says he has 2,500 accounts. Without having any honor boxes, I'm going to make a guess that the average gross sales are $5/week or $20/month. That could be low. Is this guy bringing in $50,000/month? Is that low, about right?

Of course, he can't do all this on his own. I'll also assume he's hitting these on average every 7 days. So, that is 350 services each day. The article says he has route drivers and they hit 70-80 in a day. So, let's say he's got 5 drivers including himself. If each guy hits 70 places and pulls out $7 with each box then that's $490. Would his profit be $245 minus what he pays the driver?....$100 + gas? Is he making $100/day with each driver or $500/day?

Averaged out I'm at about $15-$20/week per box in gross sales ($0.75 pricing - with theft deducted) and I'm servicing on average every 2-2.5 weeks ( I'm running boxes that hold ~100 items). Hitting 70-80 boxes a day doesn't seem unreasonable if someone is pre-packing all the boxes for the route driver - changing them out is really easy (< 5 mins per stop).

[lakevending]

I ordered my boxes from Sheridan Systems after I got tired of making them. You can get them with or without the graphics here http://www.sheridansystems.com/ and order them in quantities of 50. I've been told that the "ideal" spots are places with 15-30 employees, but I think anywhere that it sells well works out just fine for me. All you need is 1-2 really hungry employees and it will do fine. My highest seller, a salon, only has about 10 employees and I pulled $28 bucks out of it a couple of weeks ago. My average is 30-40/month per box. My gross would be higher if I could just get people to buy chips! Big bags and small bags of the big names like Doritos and Lays don't sell at all. I'm gonna be trying Pita Chips (long shelf life which is nice), veggie straws (heck, I'll eat them if they don't sell), etc. I like trying cans of Pringles. Thanks for the idea, I'll pick some of those up, and try to get some TGIF too. Crackers sell okay, and so do granola bars and some of the lower COGS items so I'm still doing okay, but it would be nice to do better

[dogcow]

For those of you that are using the larger boxes where are you getting them? We have just made our own but I really dont want to keep doing this.

Mike

http://www.sheridansystems.com/

I'm trying to wrap my head around the numbers of this guys business. Those of you with current routes, maybe you could give some insight. It says he has 2,500 accounts. Without having any honor boxes, I'm going to make a guess that the average gross sales are $5/week or $20/month. That could be low. Is this guy bringing in $50,000/month? Is that low, about right?

Of course, he can't do all this on his own. I'll also assume he's hitting these on average every 7 days. So, that is 350 services each day. The article says he has route drivers and they hit 70-80 in a day. So, let's say he's got 5 drivers including himself. If each guy hits 70 places and pulls out $7 with each box then that's $490. Would his profit be $245 minus what he pays the driver?....$100 + gas? Is he making $100/day with each driver or $500/day?

your averages might be low depending on his prices, mine make twice that on average.

ive only run into a few other honor box operators but everyone ive run into does a 2wk cycle myself included.

as for the other stuff cant say

[BobTHJ]

whats ur avg cogs for the whole box , and ur avg loss % ...are u charging $1 for everything?

im always curious how other people are doing with these.

none of my locations except 1 would work with that size box, i findf that most places dont have enough "real estate" in the break room for anything but a very small one.

I don't have good numbers for COGS as it varies quite a bit from box to box. I'll try to produce some more accurate figures. The previous owner was using an avg COGS of $0.43 per item (so a box of 100 items would be $43.00) but I have no clue how accurate that is. His avg theft was running just over 20%. I'm a few points lower than that, but that may be in part due to people being nice to the new guy. My price point is $0.75 at present for all items.

The boxes I am using are proprietary. There apparently was a large company called Mini-Vend that operated thousands of snack boxes from Nevada to Kansas and Arizona to Montana ~25 years ago. It has since split into several smaller companies all owned by members of the same family (one of which I purchased second-hand). They have custom boxes made out of a wax coated cardboard that are about 24" square and the various Mini-Vend decendant companies pool together to buy them in quantity from the supplier. These boxes are highly durable - I'm still using most of the original ones they had printed up 25 years ago and they are in great shape (the primary wear is around the holes where the coin box is tie-wrapped into the honor box in the back). I have some other plain cardboard boxes that are 3 years old and these are already falling apart. The boxes have wax-coated stiff-cardboard sleeves that they slide into for transport which allows me to stack about 6 boxes on top of each other without crushing the contents - very handy.

My product mix is roughly 20 chips, 10 pastries, 40 candy bars, and 30 salty snacks (meat, crackers, granola bars, etc.), though it can vary a bit from one box to the next.

[dogcow]

Averaged out I'm at about $15-$20/week per box in gross sales ($0.75 pricing - with theft deducted) and I'm servicing on average every 2-2.5 weeks ( I'm running boxes that hold ~100 items). Hitting 70-80 boxes a day doesn't seem unreasonable if someone is pre-packing all the boxes for the route driver - changing them out is really easy (< 5 mins per stop).

i agree you should be able to do 10 per hour easily depending on how tight the

route is. now like i have mine i do 10 in 45mins but if you had a metro area

with a lot of office buildings or a large industrial center your times should

be much lower.

[dogcow]

I don't have good numbers for COGS as it varies quite a bit from box to box. I'll try to produce some more accurate figures. The previous owner was using an avg COGS of $0.43 per item (so a box of 100 items would be $43.00) but I have no clue how accurate that is. His avg theft was running just over 20%. I'm a few points lower than that, but that may be in part due to people being nice to the new guy. My price point is $0.75 at present for all items.

The boxes I am using are proprietary. There apparently was a large company called Mini-Vend that operated thousands of snack boxes from Nevada to Kansas and Arizona to Montana ~25 years ago. It has since split into several smaller companies all owned by members of the same family (one of which I purchased second-hand). They have custom boxes made out of a wax coated cardboard that are about 24" square and the various Mini-Vend decendant companies pool together to buy them in quantity from the supplier. These boxes are highly durable - I'm still using most of the original ones they had printed up 25 years ago and they are in great shape (the primary wear is around the holes where the coin box is tie-wrapped into the honor box in the back). I have some other plain cardboard boxes that are 3 years old and these are already falling apart. The boxes have wax-coated stiff-cardboard sleeves that they slide into for transport which allows me to stack about 6 boxes on top of each other without crushing the contents - very handy.

My product mix is roughly 20 chips, 10 pastries, 40 candy bars, and 30 salty snacks (meat, crackers, granola bars, etc.), though it can vary a bit from one box to the next.

i take an average cogs over everything , yes some of my boxes are higher or lower cogs (all pastry, or no candy boxes, f.ex)

ur cogs numbers, if correct are higher than i would be comfortable with. The theft #s are excellent anything below 40 is good. but 0.75 is too low for candy the way candy prices are u need to get at least a buck i would think or put much less candy bars. the way i tried split pricing was this candy/pastries $1.00 , everything else $0.50 ... i also tried $1.00/0.75/0.50 pricing. Those did not work well.

The way I figure my cost is this....

So you have 100 items at 0.75... so your expecting $75 gross

then I take the avg loss (~20%) and figure that off the average cost..and this tells me my "real" cost. So I figure your real cost is $43.00 + $8.60(loss..20% of $43) = $51.60 making your true cogs around 68%

If you bumped your prices to $1.00 you could get that down to 51%, if you changed your mix, to less candy, even lower.

maybe there is some logical error in how i figure it let me know if you think so.

[dogcow]

I've been thinking more and more about starting a route. I have full line machines, I have bulk machines. The idea of basically zero cost to get these going using products I already have is very enticing.

I've read a lot of what dogcow has had to say and it looks like there's a few more people on here who are running a route. My question this time is about where to place these. This article says his niche is places with 20-70 employees. To me, it seems like honor boxes would be for places with 10-20 employees. I have full line machines in places with 25+ employees.

It seems like most places with 25+ employees would have a vending machine. I was out locating for my pop/snack machines yesterday in industrial parks. I would think that those are the places to go for an honor box as long as they don't have a vending machine? No retail counters at those places though.

I assume auto repair places are perfect, but I don't think I've ever seen an honor box except for those that just have suckers or candy in them.

Sorry if its rambling...I have a lot of thoughts now that I've read this article.

i wouldnt put an honor box anything above 25 employees thats just me. if you haev 70 employees im not sure how u would not have a snack machine but possibly its a different market.

heres where i have mine

money locations - barber shops, banks, walk-in clinics or big drs office, supply house (electrical/plumbing,etc...) and nail places

hit or miss locations - lube/tire shops, any small retail, accounting/insurance offices, rent-a-car places, drycleaners

basically anywhere with a cash register or better yet where the employees get CASH tips will work. places without much cash you are relying on what people have in their pocket and u will do less volume.

some banks are hit and miss whether they will let you put it there because they have policies against them, BB&T,PNC, Suntrust have policies against them. Wells Fargo (Wachovia) will take them, B of A will take them. Credit unions and small community banks almost always take them.

Anywhere you see a gumball machine/bulk vending machine you will most likely be able to place an honor box. I use that as my barometer means they are receptive to them.

i want to be clear, i dont put an honor box on the retail counter, i do not do this. its for the employees only usually in the break room or behind the counter. Otherwise your loss will be very high and in one case someone stole the entire box and another case the money out of it. If you put on the counter you will likely get kicked out anyway because the business owner/manager will find its too much of a hassle to keep an eye on, even if they insist on it, put it in the break room...my opinion anyway. If you want to put one on the counter go with the penny candy or lollipop boxes and a charity sticker.

[JoeT]

As always, great info Dogcow! I got a easy question for you, when you service your route, do you have a large box with all of your products, so that you can just refil and go? Thats how I do it, but I wasn't sure if others were just swapping boxes with already filled boxes. I have a Pre-printed check list, so I can see what was in the box and what is being replaced, works well, but adds some time to each stop.

[dogcow]

As always, great info Dogcow! I got a easy question for you, when you service your route, do you have a large box with all of your products, so that you can just refil and go? Thats how I do it, but I wasn't sure if others were just swapping boxes with already filled boxes. I have a Pre-printed check list, so I can see what was in the box and what is being replaced, works well, but adds some time to each stop.

no that would take forever, i switch the boxes, i am in and out like a ninja lol

[loach33]

http://www.sheridansystems.com/

your averages might be low depending on his prices, mine make twice that on average.

ive only run into a few other honor box operators but everyone ive run into does a 2wk cycle myself included.

as for the other stuff cant say

So, if the average is closer to $40/month then this guy is pulling out $100,000/month??? Holy crap!

[loach33]

To the lay person it would seem that a box sitting there alone in the breakroom would be more likely to be stolen. I would have said that a waiting area of a auto repair shop where it sits on the counter would be perfect. But, you guys are actually out there with this business so I'll trust you on that. Great info - I appreciate. I think I'll be ordering some boxes soon and going for it.

Those of you who have a good sized route going.... How many stops do you have in total and how much time do you spend on the business per week? Time spent including counting money, shopping, getting the boxes together, everything.?

Thanks for the info

no that would take forever, i switch the boxes, i am in and out like a ninja lol

Man, I am full of questions on this. If you have say 40 stops one day and you have all your boxes ready to go prior to going out - how do you load them in the van/truck? I would think you can't stack them. I have a Grand Caravan with the back seats removed. Seems you need some sort of shelving or something so things aren't getting crushed and/or to give you more room.