I've given up hope with honor boxes. Am I wrong here?

[sherlock]

the vendingbutler1 is sharing his experience.

I recommend we take it for what it's worth...nothing more, nothing less.

If he had succeeded in his honor box business, would that have guaranteed your success with honor boxes?

NO! Of course not.

By the same token, his failure with honor boxes has no impact on whether or not you will also fail at honor box vending.

Businesses fail daily.

That is rarely (if ever) a knock on a whole industry.

There are too many factors involved in the success (or failure) of any business venture.

One shouldn't paint an entire industry with such a broad brush.

[BobTHJ]

BobTHJ,

I also own 2,000 comercial jet airliners and 100 airports around the world. I gross annually 750,000,000,000,000.00, 99% of which goes straight into my pocket as net profit for me. I own a 200 story building in Dubai, a whole city block of condos in Paris worth $850 million dollars each. I'm also the proud leader of a 3rd world country.

I guess I can be anybody I want to be as long as I'm online and no one has ANY WAY of proving otherwise about me. FOR ANYONE WHO HAS READ WHAT THIS GUY (BobTHJ) HAS SAID ABOUT HIS SUPPOSED NUMBERS, AND IS BRAND NEW TO THIS BUSINESS, WHEN YOU ARE OUT LOCATING BOXES NEXT TIME PAY ATTENTION TO HOW MANY PEOPLE SAY "WE TRIED THAT BEFORE BUT IT DIDN'T WORK HERE". BELIEVE IT OR NOT THERE WILL BE OTHER PEOPLE WHO HAVE TRIED THIS BUSINESS BEFORE YOU AND IF YOU PAY ATTENTION, YOU WILL SEE REMNANTS OF WHAT SOMEONE ELSE HAS TRIED ALREADY. THERE MAY BE A VERY FEW NUMBER OF SCATTERED ACCOUNTS THAT SOMEONE HAS OUT THERE BUT IF YOU STOP TO THINK ABOUT HOW MUCH IT WILL TAKE TO SERVICE THOSE ACCOUNTS (food cost, fuel cost, insurance, taxes,etc, etc) IT WON'T ADD UP.

If someone else before you has tried this and failed and there's apparently no one else to step in and fill that void, how is what you're doing going to be any different? If it were then how come more people aren't doing it and you're not seeing honor boxes everywhere?

I'd be willing to bet everything I own that these people that are responding to me in contrast are doing so because they have "another log in the fire" so-to-speak. They have businesses of SELLING HONOR BOXES TO PEOPLE WHO DON'T KNOW ANY BETTER. Otherwise (and just think about this now) why would someone who is in business of doing whatever, be trying to quell something or someone (me) who would be saying things that would bring about less competition for them?

I come to vendiscuss both to glean ideas from other vendors and to share my own ideas for others to use. I can assure you I have no other hidden motive. Perhaps my viewpoint is different than yours, but I enjoy seeing others succeed, even others in my industry. I have the same types of discussions with local vendors in my area, even though they are my direct competition - I think we all benefit from working together rather than working against each other. Plus, when I'm expanding I'd much rather my competitor have a thriving business for me to buy out than a sickly one

I'm really sorry that honor box vending didn't work for you. It sounds like you researched things and put in significant effort to make it work - so I realize how frustrating that must be. I wish you the best in lawn care or whatever other business you choose to pursue.

[thevendingbutler1]

Once again I will go back to The Law of Diminishing Returns. If something is left unattended beyond you or your companies control it is left up to the natural order of things. The natural order of things is for things to break down (in this case people start increasingly stealing more and more from you and your accounts fall apart).

PerformaVending explain to me then how you're going to actually stop people from stealing from you when you leave something like this that's unattended? THAT IS BEYOND YOUR CONTROL AND IT'S NOT THAT YOU DID SOMETHING WRONG, IT'S THAT THE WHOLE BUSINESS MODEL DOESN'T WORK IN THIS SOCIETY TO BEGIN WITH. You said that SOMEHOW this can be overcome by using "a dynamic sales strategy and some exceptional sales skills". Would you consider on average 15 new accounts per day (my best day being 24 new accounts) exceptional sales skills?

BTW because of The Law of Diminishing Returns, WHICH IS BEYOND MY CONTROL IN THIS BUSINESS, those accounts were almost all burned up - SIMPLY BECAUSE THIS WHOLE BUSINESS ON A WHOLE DOESN'T WORK NOT BECAUSE SOMETHING THAT ID DID WRONG. HOW AM I SUPPOSED TO KEEP PEOPLE FROM STEALING FROM ME IF I'M NOT EVEN THERE TO OVERSEE EVERYTHING???

The Law of Diminishing Returns is also as much of a law as the Law of Gravity is a law. So if what you're trying to say is that this works and some people would not be subject to The law of Diminishing Returns then there would be people who would not be subject to The Law of Gravity.

Outside of the movies has anyone ever seen Superman flying around in every day life?

[thevendingbutler1]

This is for BobTHJ,

Since there is no way anyone can find out exactly how much money your business makes with your honor boxes (unless it were a publicly traded company...LOL) I would like you to do something here: I would like you to give a listing of the names of all the businesses with their addresses and telephone numbers that you claim that you serve within a 10 mile radius of your office. That way we can call those places and find out for ourselves whether what you are saying is true or not. You say that you service 75% of your 130 honor boxes within that range. That means that you should have around 98 total honor boxes that (according to you) run close to perfection on a perpetual basis.

Let's put that to a test and find out if what you are saying is really true or not. Just list those businesses and I'll start calling each one of them and ask them how long they've had their box for. How about I just pose as a customer service rep for your company and ask them if they are satisfied with their service? I'll also use Google Maps and determine the exact range in mileage for those stops in particular that you have claimed you have locations with. Let's go ahead and do this today. Start listing each one and I'll start calling.

[rdendy]

This is for BobTHJ,

Since there is no way anyone can find out exactly how much money your business makes with your honor boxes (unless it were a publicly traded company...LOL) I would like you to do something here: I would like you to give a listing of the names of all the businesses with their addresses and telephone numbers that you claim that you serve within a 10 mile radius of your office. That way we can call those places and find out for ourselves whether what you are saying is true or not. You say that you service 75% of your 130 honor boxes within that range. That means that you should have around 98 total honor boxes that (according to you) run close to perfection on a perpetual basis.

Let's put that to a test and find out if what you are saying is really true or not. Just list those businesses and I'll start calling each one of them and ask them how long they've had their box for. How about I just pose as a customer service rep for your company and ask them if they are satisfied with their service? I'll also use Google Maps and determine the exact range in mileage for those stops in particular that you have claimed you have locations with. Let's go ahead and do this today. Start listing each one and I'll start calling.

He has nothing to prove to you, why would he even think about doing that?!?

From Wiki "The law of diminishing returns (also law of diminishing marginal returns or law of increasing relative cost) states that in all productive processes, adding more of one factor of production, while holding all others constant, will at some point yield lower per-unit returns.^[1] The law of diminishing returns does not imply that adding more of a factor will decrease the total production, a condition known as negative returns, though in fact this is common."

I thought I would post so you can actually read WHAT the law of diminishing returns. Please note the "adding more of one factor of production, while holding all others constant," you can't apply this law to your business because you cannot hold all variable consistent because you do not control them. Also your analogy of "people start to steal more and more" doesn't hold up to logic, so let's say you have one thief at one location, according to your very simple explanation if he started out stealing 1 bag of chips a day he would steadily progress to 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, etc... bags of chips everyday, which is ridiculous. The issues you ran into are not going to be that simple, my guess is maybe you had locations with high turnover rates, very little if any supervision and probably locations that might prefer employees with criminal backgrounds so they can pick them up far cheaper than a normal employee. I am also curious what was your COG? How many did you place per box and at what price? where did you buy your supplies? What type of locations did you have and where are you located? Let's break down why your business failed.

I can honestly try and help you figure out what went wrong or I can keep pointing out your flawed logic. I'm at a computer 14 hours or more a day so i have all the time in the world.

[dogcow]

all i can say i i do not sell honor boxes. i stumbled into the business by accident looking

to increase my volume for snacks from a route i bought. i have had boxes on location since

2010 many of my boxes are still in the same location my theft #s are close to poplady1's sister

a little higher than bob claims but his #s are easily believable. i dont sell anything to anyone. i gave you

howie goldstein's number, he can refer you to places that do full time honor boxes with big routes (seminole snacks in NJ

and other places hes worked). sorry it didnt work out for you. i think doing any vending full time it is easier

with someone who is locating full time because the process is very time consuming i agree with that. wish i could

offer some advice that could help. i advocate this business because it can be started with very little money

unlike most vending which requires huge amounts of capital until you get to a point where you have

positive cash flow.

[thevendingbutler1]

Hey Nick,

I believe you you. You don't need to try and explain yourself to me. I think you're a good guy and you've helped me a lot with this. I know you've always been real with me and I appreciate you for that.

[thevendingbutler1]

OK Rdendy,

My COGS is the same as BobTHJ's with .35-.40 Cents

I went business to business (almost entirely down the main highway (called Kingston Pike) that goes through West Knoxville.

I sell all of my items at $1.00 each

I buy my supplies at Sam's Club

I have all kinds of different locations located in the West Knoxville area, anywhere from doctors offices to mechanic shops to beauty salons.

[thevendingbutler1]

I can tell you that unless Knoxville, TN is somehow a straight piece of S#$% town and somehow the people here are just COMPLETE AS%%H*^$& and different than the people in Western Colorado where BobTHJ is, there's NO WAY that he could have numbers like that ever. I have spoken with local vendors in Sam's Club in Knoxville and when I told them what I'm doing they looked at me like I was crazy. I asked one guy if he knew of anyone who was doing honor boxes and he said he only knew of one person in Knoxville but that they had given up on the business.I've been out going to every single business down Kingston Pike for about a 30 mile stretch (which is a LOT) of businesses and seen remnants of what one guy did before me. He still has honor boxes out there but they are so scattered out (I think on average of about 7-8 miles) that it would have to be impractical to go out and service those boxes if he only did that for a living.

[rdendy]

I went business to business (almost entirely down the main highway (called Kingston Pike) that goes through West Knoxville.

OK you are not going to like this but one possible issue, and something you have no control over, is that Knoxville has a crime index of 1 out of a hundred. In comparison there are (per 1k) 72.19 property crimes in knoxville, for the state of Tennessee it's 36.58 and the national median 29.4. You just live in a crime ridden part of the state and yes you are going to have more thefts in your honor boxes because of it. http://www.neighborhoodscout.com/tn/knoxville/crime/

Everything else looks inline, you are just in a really crappy area, sorry.

[Donovon]

Cog's a little high imo... Im running 30-33% I''m finding that not all the best deals are from sams or costco... For exp. 50 bag of lays 1oz chips at costco is 13.00$ at foodmax it 8.00...

[thevendingbutler1]

Actually I don't have a problem with that rdendy. There's a part of me that would feel a lot better to think of this town as a straight piece of S*** and that the people here basically suck A$#. It just doesn't in anyway seem intelligent to do that because then I would be, like many of you all have said (including yourself rdendy) , blaming other people for my problems. I think that would then put me into the frame of mind that if I move somewhere else that somehow the people in another place are going to be incredibly different than they are here. Then once I get there I discover that people are people wherever you go and then what would be the point in thinking that way and running away from here to begin with?

[rdendy]

Actually I don't have a problem with that rdendy. There's a part of me that would feel a lot better to think of this town as a straight piece of S*** and that the people here basically suck A$#. It just doesn't in anyway seem intelligent to do that because then I would be, like many of you all have said (including yourself rdendy) , blaming other people for my problems. I think that would then put me into the frame of mind that if I move somewhere else that somehow the people in another place are going to be incredibly different than they are here. Then once I get there I discover that people are people wherever you go and then what would be the point in thinking that way and running away from here to begin with?

To use an analogy it would be like me setting up a pork stand in a Muslim country. Sure I can try to make a go of it but the environment will have some impact on my business. I am just saying that is one variable that could be the problem, not it's the variable.

[thevendingbutler1]

Well I guess I've found that (like other people before me in this town have found) that the environment here has enough impact on the business to put me out of business. How can I possibly do anything about someone stealing from me, when I'm not even there and I don't even know that person?

[thevendingbutler1]

And I also certainly think that whomever is selling honor boxes should be taking a good look at the crime indexes (like you looked at) and not selling honor boxes to people who live in S$#$@ HOLE towns like this one.

I really don't like big government at all but I almost feel that there should be some type of restriction or regulation on this type of thing so that other people don't get ripped off this way.

Also that is something that I think you guys as an honor box community should be doing in warning newbies about. If all you're doing in here is trying to promote "good vibes" and "positivity" and the feeling that everybody can do this then people like me and other people just get F%$#& over. Granted though like I said before, it was not you all who originally got me to believe in the idea it was that Dennis guy.

That dude in Iowa makes money off of selling his boxes and I know he's a member on this website.

[rdendy]

And I also certainly think that whomever is selling honor boxes should be taking a good look at the crime indexes (like you looked at) and not selling honor boxes to people who live in S$#$@ HOLE towns like this one.

I really don't like big government at all but I almost feel that there should be some type of restriction or regulation on this type of thing so that other people don't get ripped off this way.

Also that is something that I think you guys as an honor box community should be doing in warning newbies about. If all you're doing in here is trying to promote "good vibes" and "positivity" and the feeling that everybody can do this then people like me and other people just get F%$#& over. Granted though like I said before, it was not you all who originally got me to believe in the idea it was that Dennis guy.

That dude in Iowa makes money off of selling his boxes and I know he's a member on this website.

I don't doubt he is a member and yes you got a very bad situation and I really do feel for you, you got some bad advice. Believe it or not I almost got sucked into a Biz-Op style opportunity right after finding this place. I was lucky enough that I asked the guys here and they gave me the heads up, they even knew this guy and his M.O.. You stated a few posts back that you didn't find this place until after you were into it, which could have saved you some heart ache. There are many posts where the members here all agree to start off small and test the waters, I wish you could have found them in time.

[thevendingbutler1]

O.K. (not trying to get smart with you but just trying to understand things better) you're saying that none of this is my fault and that it's everybody else's fault? All I want to do is create a better life for myself and I think that's why all of you got into honor boxes. I guess I find that ultimately depressing because if it's not something that I can change then there's nothing I can do about it. I can't control the way other people are.

It's time like this when I wish there would be an apocalyptic event (like religions talk about) that would happen.

[rdendy]

O.K. (not trying to get smart with you but just trying to understand things better) you're saying that none of this is my fault and that it's everybody else's fault? All I want to do is create a better life for myself and I think that's why all of you got into honor boxes. I guess I find that ultimately depressing because if it's not something that I can change then there's nothing I can do about it. I can't control the way other people are.

It's time like this when I wish there would be an apocalyptic event (like religions talk about) that would happen.

No not saying it's not your fault. There are environmental factors and there are human error factors. What I have been trying to say this entire time is to learn from the mistake and push forward either in Lawn Care or in this business. From what you have told me, if it were me I would push ahead in vending because you already have some foundation BUT I would change your business plan. You are obviously good at locating, pull all of your honor boxes that you aren't making money on and sell them boxes, or sell those locations as a separate route, then use all of of the money you make from the sale and that you have coming from your honor boxes that are making you money to invest in GB machine single head w/ stands, since you want/need this to be a stand alone business quick. Then use your superb locating skills to locate these while you run whats left of your honor box route. Repeat until you are back on track. Look for used and cheap machines to start off so you can get more out there faster.

[BobTHJ]

For the record:

It appears I did overstate my numbers as far as distance goes. I went to my database and looked up the exact figure because I was curious:

I have 78 honor boxes within the Grand Junction metro area (the entire area is within 10 miles of my home). I have 136 boxes total counting those in neighboring cities and towns. So that's 57% within 10 miles. I'd guess though that 3 out of 4 business within 10 miles of my home I haven't yet visited to attempt and place a box. Most of my sales calls thus far have been to businesses neighboring my existing locations. There's whole sections of the city I haven't located in yet.

Also to set the record straight: In the 7 months I've owned the business I've placed 40 honor box accounts and lost 11 accounts. Of the 11 accounts I lost 6 were new ones I placed and the other 5 were older accounts I purchased from the previous owner. That means I've retained 85% of the new accounts I've placed (though to be fair, some of them I have placed more recently than others and I may get a kickout or two from these more recent placements).

Of the 11 honor boxes I lost: 5 were due to stores closing or moving, 1 didn't have the manager's approval, 3 were due to service related issues (angry owner, stale product, disliked the trash), 1 the owners purchased their own vending machines, and only 1 was due to frustrations over payment.

If the 136 accounts I have, factoring in COGS and taxes (but not fuel) only 2 have not been historically profitable (though admittedly another dozen or so have net me less than $50 each in 7 months either due to slow sales or low payrates). Yes, I have noticed the trend thevendingbutler speaks of: The first couple of services on a new account tend to pay well and then the theft creeps up over the course of the next few months. However, in my experience the theft levels off at around 3-4 months and usually holds within a tolerable level (under 25%). My historic theft across all services since I purchased the business is 18.9%. I have a dozen or so accounts that will alternate between high and low theft levels as a result of reminder notes. On one service theft will be at 40-50% and I'll leave a shortage note. On the next service theft will be less than 10% as a result of the note, so I won't leave a second note. Then on the next service it's back up to 40-50%.

[thevendingbutler1]

This is what I've done in Knoxville, TN:

(I don't have the exact numbers but this is the rough ballpark estimate)

Of around 200 locations that I have placed within the last 6 months, when all is said, about 125-150 of them will have to be pulled. About 50% of those pulled will be because of theft, 35% because of lack of product turnover and 15% because other reasons. Also considering what I've seen I'm expecting over the next 6 months to have to pull around another 20-25% of those because of theft in the future.

This is also in the "good" area of Knoxville, TN where I've been working in too. This is not around the projects

Have you been going business to business with doing your locating Bob? What is your success rate percentage with locating boxes?

[BobTHJ]

Yes - when I locate I'll just go from one door to the next. I usually take in a bag of freebie snacks (5 per bag of stuff that I'm overstocked on or is about to date) and ask to speak to the manager. My success rate thus far has been fairly low (10%?) but I'm not the world's best salesman either. I'm getting more comfortable with my pitch though and am seeing better responses of late.

Have you considered becoming a locator? It seems you've got the skills for it. I know I for one would love to have someone come place new accounts for me.

It sounds like you may just be in a really crappy area theft-wise, though I suspect you can still make a go of it. If you decide to stay in the honor box business I guess I'd make four suggestions:

1) See what you can do to improve low-paying accounts and don't be hasty pulling boxes for theft. Get creative. One thing I'm trying is putting a sign on the box: "Help support XYZ local charity and drop in an extra buck! All money collected beyond the cost of snacks will be donated at month's end". The guy who owned the business previously bought free donuts for the business who had the most improved payrate at the end of each month. Offer some sort of incentive to the manger if the box stays paid up. Deputize an employee to "watch the box" for you - and throw them a free snack now and then for the trouble. A lady I know of baked a pie for each of her accounts once every six months or so and kept theft to 14%.

2) Keep placing new accounts. It seems you are an expert at this. If you really can only profit from 25% of the accounts you place then just build that into your plan. Target businesses you may have overlooked in your first sweep and don't be afraid to go back and hit up places that turned you down every six months or so. Watch for new businesses (local papers often list these) and plan to stop by before or shortly after their opening.

3) Don't pull slow accounts. Make up separate boxes for the slower accounts that don't contain short-dated items and put them on long service cycles. I don't go service a box until there is about $35-40 in it (well, until there should be based on past sales history) - that way its worth my time to drive there and service it. Three slow accounts on a long service cycle is roughly equal to one good account and doesn't take up any more of my time or effort

4) Consider branching into other lines of vending. Once you've got your foot in the door it is easy to cross sell other products - particularly beverages. I've gotten a number of good soda machine placements from my existing honor box locations. Another strategy I've tried is drink honor boxes. I got wire trays from Home Depot and filled them with sodas, tea, etc. and place them inside or beside my customer's fridges. The profit margin is better on drinks overall - and while they are a bit bulky and heavy to haul around my drink honor boxes have done well.

[Rick]

That is a GREAT post Bob. #3 especially. TVB, your statement estimating that you'll have to pull 35% of your remaining boxes because of lack of product turnover made me cringe. If it's not losing money at least try to adapt before you yank it entirely. Like Bob said, make up a small box and switch out product. If you can squeeze even 3-5 bucks out of a location that you drive past on your route anyway I'd encourage you to try everything under the sun before you pull it.

Also, regarding #4 - I think Bob touched upon why we see very VERY few examples of people doing straight honor boxes for a living. Honor boxes are a foot in the door and naturally leads you into different types of vending as well.

Also, regarding theft - have you tried anything other than throwing your hands up in the air and saying "Welp, can win with these stealing snakes in the grass! Better leave another nasty-gram for the owner about it!" As the old saying goes, you catch more flies with honey than vinegar. Here's something you may wanna try - and I'll admit, I've only tried this one ONE box that had a 43% theft rate so it might not work as well for you but it's worth a shot. It dropped my theft rate for that box to 23% and 19% over the next two services cycles. Pick up a 360 ct. of Dum-Dums ($8.52 here in Loveland, CO. - 2.3 cents per item) and notch about 10 small holes across the front of the box and put a sucker in each one. Then add a little sticky note that says, "Take a sucker for free and have a nice day!"

Again, your mileage may vary - but it worked wonders on that one box for me. I can't be certain why it worked and who knows, maybe in a couple of months it'll be right back up to that 43% theft rate or worse. We'll see. But I'd like to think that people are responding with more honestly because I've extended an olive branch so to speak and it's only 23 cents out of my pocket per service cycle.

[dperry]

ANYONE READING THIS ASK YOURSELF HOW MANY LAWN CARE BUSINESS OWNERS DO YOU SEE DRIVING AROUND EVERY DAY AND DO YOU EVER SEE ANYONE OUT THERE RUNNING AN HONOR BOX BUSINESS?

In the great state of Texas, and in a little suburb of Houston, I can tell you that there are loads and loads of lawn care businesses out there. There is one lawn care owner that lives two doors down from me. One third of the houses on my street get their lawns done professionally. You can't drive down the street in my neighborhood without being blocked by their trailers every few blocks. During lunch hour, all the day-worker work crews congregate around the local gas station convenience mart to have lunch. You have to navigate around all the trucks and trailers in order to get your gas.

If you operated in Houston, you would have SERIOUS competition. But then, the demand is very high so there's always room for another slice of the pie.

Whether or not they have an honor box business is unknown, but not likely.

[rdendy]

In the great state of Texas, and in a little suburb of Houston, I can tell you that there are loads and loads of lawn care businesses out there. There is one lawn care owner that lives two doors down from me. One third of the houses on my street get their lawns done professionally. You can't drive down the street in my neighborhood without being blocked by their trailers every few blocks. During lunch hour, all the day-worker work crews congregate around the local gas station convenience mart to have lunch. You have to navigate around all the trucks and trailers in order to get your gas.

If you operated in Houston, you would have SERIOUS competition. But then, the demand is very high so there's always room for another slice of the pie.

Whether or not they have an honor box business is unknown, but not likely.

Holy crap that's a lot of hungry lawn workers, put a honor box on every trailer and a GB head for the neighborhood children of course

[thevendingbutler1]

Hey rdendy I've heard that bulk candy really doesn't net much profit at all. That's what that guy in Remington, IN told me who's got that 2,500 honor box business