shepherdsflock Posted February 7, 2012 Share Posted February 7, 2012 I'm trying to get my snack and soda vending business going by starting in my empoyers office. So far they've let me put in a bulk machine and it has done pretty well (triple head Vendstar averaging $38/month). There have been a lot of complaints lately about the vending machines. They are owned and serviced by Pepsi and because we're not a huge account it seems that response to problems is slow. So, there's my selling point, I can offer quicker, better service. However, I'm wondering what would be appropriate equipment for our building. What Pepsi has now seems like overkill. Two 6-selection 20 oz. soda machines and a 40 selection snack machine. All this for an office employing about 60 people (about 60/40 split on male to female employees). Maybe our people are real gluttons and they actually sell enough to justify three machines, but I watch the snack machine pretty closely and it doesn't seem to move much product too quickly. Some things sell out quickly (like Famous Amos cookies) while other things just kind of languish in misery. They service the machines once a week. What do you guys think? If you were going to place equipment in an office building like this, what would you think would be the appropriate number and type of machines? Link to comment Share on other sites More sharing options...
Shauna Posted February 7, 2012 Share Posted February 7, 2012 If I were walking in off the street and making a pitch to the manager/owner, I would suggest for that number of employees a 23-24 selection snack machine and a 8-9 selection multiprice soda machine. Combos will probably be too small for the amount of employees in your location, and if the space calls for it, those two machines would probably work well to start. You may also consider getting a glass front soda machine and converting the top one or two racks to snacks. It makes it a combo machine, but holds a lot more product than a traditional combo would. Link to comment Share on other sites More sharing options...
shepherdsflock Posted February 7, 2012 Author Share Posted February 7, 2012 What are your thoughts on glassfront combo machines like National's Merchant combo series machines? Do they have enough capacity? Here's a link to one of their machines: http://www.cranems.com/GPL/products/MerchantCombo449949.cfm Is something like this any better than the other combo systems on the market? It would be more flexible if I ever decided to venture into cold food, but would it be a good fit for the customer? Can machines like this be found used? Link to comment Share on other sites More sharing options...
Shauna Posted February 7, 2012 Share Posted February 7, 2012 It looks shiny, but I would not start my business by buying a brand new machine that will cost a lot of money for a location that hasn't proven itself yet. The selection options do look good for the size office you are talking about though. Check some of the refurbished vending distributors to see if they have anything available that would suit your needs. Personally, my rule of thumb is to put a used machine in a new location until I know how it will perform. Once I have a better idea of what to expect with sales, I would consider purchasing a new(er) machine if the location calls for it, and move the used machine to another new location. Especially if you are just starting out with full line vending, save your money and buy used or refurbished. Link to comment Share on other sites More sharing options...
AngryChris Posted February 7, 2012 Share Posted February 7, 2012 I don't recommend buying a new refrigerated machine and trying to make it "do everything" because it simply costs WAY too much money and doesn't hold even CLOSE to what 2 full-size machines could do for almost the same amount of money spent.... plus, a full-size snack and soda can be placed anywhere.... where a full-size refrigerated machine needs to be at a location that makes really good money. I definitely agree with shauna to buy refurbished equipment for an office. However, if the deal were good and the space was decent, I would try to put 2 multi-price machines (capable of cans AND bottles each) and use one primarily for bottles and the other for cans. Then, I would put a 4-wide snack in this location... cause 3-wides just seem to be hard to acquire around my area and I don't expect much of a difference in your area. You can get 4-wides all day long though and you can place them all day long as well. I just always try to purchase equipment that I can use somewhere else if I were to ever lose that account. Fortunately, I haven't lost one yet . Link to comment Share on other sites More sharing options...
shepherdsflock Posted February 7, 2012 Author Share Posted February 7, 2012 I don't recommend buying a new refrigerated machine and trying to make it "do everything" because it simply costs WAY too much money and doesn't hold even CLOSE to what 2 full-size machines could do for almost the same amount of money spent.... plus, a full-size snack and soda can be placed anywhere.... where a full-size refrigerated machine needs to be at a location that makes really good money. Why does a refrigerated machine need to make really good money? How are they different from soda machines? I'm getting what you're saying about capacity, but I'm not sure I understand what you're saying about the refrigerated machine needing to make more money. Could you explain it a little? Link to comment Share on other sites More sharing options...
AngryChris Posted February 7, 2012 Share Posted February 7, 2012 Why does a refrigerated machine need to make really good money? How are they different from soda machines? I'm getting what you're saying about capacity, but I'm not sure I understand what you're saying about the refrigerated machine needing to make more money. Could you explain it a little? Generally speaking, refrigerated machines cost FAR more than snack machines or soda machines. I believe the Alpine series machines (USI) cost $5,250+ right now. In comparison, a USI 10-select soda machine may cost $3,250 and a USI 32 select snack machine may cost $3,250'ish for a total of $6,500 for the pair. Now, that in itself doesn't make much sense... this requires alot of mathematical breaking down and logical discussion but I will do my best! If the machine costs lets say only $5,200. You need $100 in profit every week just to break even after 1 year, about $67 in profit if you want to break even after 1.5 years. In order to achieve those margins, you probably need to make sales of $180 to $250 based off of my profit margins (35-40%'ish). Lets take the average of that $180 and $250 which is $215. To generate $215/week, not including commission or anything else or any major fuel expense or salary or anything, you would have to account for approx. 65% of that revenue to be from soda sales alone... which is roughly $140. $140/week is roughly 4 cases of bottled beverages every week. Those machines hold something like 6-bottles in 8 or 9 selections or about 50 bottles each shelf (about 100 bottles with 2 shelves). You would basically need the machine to be fully emptied every week in order to break even at a reasonable rate of return. Now, with that said, do you want them to see your machine drained every week? Probably not! So you would have to come by 2 or 3 times each week just to make sure the products do not sell out to quickly. This will drastically increase your fuel expense and reduce your rate of return to the point where you need to sell even MORE product and visit MORE often!! It's just a downward spiral. I have not even mentioned the fact that... once you account for the main product sellers... your variety will be quite limited and you would be lucky to have maybe 12 selections of soda and probably have certain things selling out faster than others and still making it difficult to keep things from being sold out and upsetting the customers. So why would you need a refrigerated machine? Well, a large account may need 2 soda machines and a snack machine and generate a fair amount of revenue (lets say $800/week). At those numbers, you would have plenty of revenue to pay for the equipment and plenty of capacity to keep yourself from visiting way more than you have to. Now, if the customer says they want vending in another section of the same building for either food or for some more selections of soda or they just want a machine in thier corporate area so that the white-collar folks don't have to deal with the inferior blue-collar folks. This type of a situation would justify putting a combo machine in there so you can put exactly what they want for their own amusement. You could also put a combo machine in there too but a refrigerated machine like the one you linked to would be well-suited to keeping the corporate folks happy and probably keep you in there anyway. It may be hard to break down in a way that's easy to understand... but a refrigerated machine will ultimately be so limited in overall capacity (if it is the ONLY machine you use) that you will end up having to spend more money in fuel expense to re-stock it more often UNLESS the sales were so low that you only had to stock it once each week.... which would mean that you would not be making enough money to justify the machine in the first place. If you bought a used machine like that for a reasonable price (lets say $3,000) then my point is much harder to make... but I have never seen one of those machines go for anything less than $5,000. Link to comment Share on other sites More sharing options...
mission vending Posted February 8, 2012 Share Posted February 8, 2012 Generally speaking, refrigerated machines cost FAR more than snack machines or soda machines. I believe the Alpine series machines (USI) cost $5,250+ right now. In comparison, a USI 10-select soda machine may cost $3,250 and a USI 32 select snack machine may cost $3,250'ish for a total of $6,500 for the pair. Now, that in itself doesn't make much sense... this requires alot of mathematical breaking down and logical discussion but I will do my best! If the machine costs lets say only $5,200. You need $100 in profit every week just to break even after 1 year, about $67 in profit if you want to break even after 1.5 years. In order to achieve those margins, you probably need to make sales of $180 to $250 based off of my profit margins (35-40%'ish). Lets take the average of that $180 and $250 which is $215. To generate $215/week, not including commission or anything else or any major fuel expense or salary or anything, you would have to account for approx. 65% of that revenue to be from soda sales alone... which is roughly $140. $140/week is roughly 4 cases of bottled beverages every week. Those machines hold something like 6-bottles in 8 or 9 selections or about 50 bottles each shelf (about 100 bottles with 2 shelves). You would basically need the machine to be fully emptied every week in order to break even at a reasonable rate of return. Now, with that said, do you want them to see your machine drained every week? Probably not! So you would have to come by 2 or 3 times each week just to make sure the products do not sell out to quickly. This will drastically increase your fuel expense and reduce your rate of return to the point where you need to sell even MORE product and visit MORE often!! It's just a downward spiral. I have not even mentioned the fact that... once you account for the main product sellers... your variety will be quite limited and you would be lucky to have maybe 12 selections of soda and probably have certain things selling out faster than others and still making it difficult to keep things from being sold out and upsetting the customers. So why would you need a refrigerated machine? Well, a large account may need 2 soda machines and a snack machine and generate a fair amount of revenue (lets say $800/week). At those numbers, you would have plenty of revenue to pay for the equipment and plenty of capacity to keep yourself from visiting way more than you have to. Now, if the customer says they want vending in another section of the same building for either food or for some more selections of soda or they just want a machine in thier corporate area so that the white-collar folks don't have to deal with the inferior blue-collar folks. This type of a situation would justify putting a combo machine in there so you can put exactly what they want for their own amusement. You could also put a combo machine in there too but a refrigerated machine like the one you linked to would be well-suited to keeping the corporate folks happy and probably keep you in there anyway. It may be hard to break down in a way that's easy to understand... but a refrigerated machine will ultimately be so limited in overall capacity (if it is the ONLY machine you use) that you will end up having to spend more money in fuel expense to re-stock it more often UNLESS the sales were so low that you only had to stock it once each week.... which would mean that you would not be making enough money to justify the machine in the first place. If you bought a used machine like that for a reasonable price (lets say $3,000) then my point is much harder to make... but I have never seen one of those machines go for anything less than $5,000. Basically what you are referring to is the cost-to-service. Here is a link to a thread about this subject I started about a year ago. http://vendiscuss.ne...ost-to-service/ Seeing as how you work at the location it really does not apply here but by paying attention to your cost-to-service you can make a better judgement call about the profitability of an account and from there figure out how much to spend on equipment based on the ROI you find acceptable. Link to comment Share on other sites More sharing options...
AngryChris Posted February 8, 2012 Share Posted February 8, 2012 Basically what you are referring to is the cost-to-service. Here is a link to a thread about this subject I started about a year ago. http://vendiscuss.ne...ost-to-service/ I was unaware anyone had made a post like that. Where were you when I was in the process of typing all of that out? You could have saved 5 minutes of my life! Link to comment Share on other sites More sharing options...
mission vending Posted February 8, 2012 Share Posted February 8, 2012 I was unaware anyone had made a post like that. Where were you when I was in the process of typing all of that out? You could have saved 5 minutes of my life! Just go back and read the old threads grasshopper, there is much still to learn Link to comment Share on other sites More sharing options...
Shauna Posted February 8, 2012 Share Posted February 8, 2012 While I agree that some glass front machines can be expensive, especially if purchased new, there are several websites out there that are currently selling them from around $2,250. It all depends on the deal you can find. Good luck getting your location. Link to comment Share on other sites More sharing options...
Dennis23 Posted February 8, 2012 Share Posted February 8, 2012 One 9 select soda and one 4 wide snack machine. You should be able to pull $250.00 per week out of the account with this combo. The $250.00 estimate is just that an estimate using figures based on the blend of male/female. To get the account without putting as much equipment in just tell them I will be here daily. Good luck!! Link to comment Share on other sites More sharing options...
AngryChris Posted February 8, 2012 Share Posted February 8, 2012 Just go back and read the old threads grasshopper, there is much still to learn Hey, I was just trying to answer his question, he should have looked it up, not me . No soup for you. Link to comment Share on other sites More sharing options...
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