Are any of these locations good deals?

[Mike32110]

I know that I said I am going to try and hold off on buying new locations, however, I just wanted to get an idea of the market. This guy was listing several locations, the numbers are both the yearly gross sales AND the sales price for the machine in location. What do you guys think?

http://calgary.kijiji.ca/c-buy-and-sell-business-industrial-Vending-Machines-for-sale-location-included-W0QQAdIdZ425673107

Thanks!

[treadmill]

Technically when I buy a route I will ONLY pay 4 times the monthly gross. In this case I think it comes out to about 15,000, I would offer 6000 and no more because you can go out and buy used equipment and pay a locator about the same price as the offer of 6000. If you think about it he is asking you to put up a years gross if those numbers are even correct with used equipment before you make any of your money back. He is actually asking for the amount of money that would pay to replace that equipment brand new. If he doesn't accept your price be ready to walk away, he is way overpriced IMO. Hope this helps. Oh, if he does take the offer of 6000 be ready to replace all the locks immediatly because I'm sure he has an extra set lying around to rob you blind.

[dogcow]

id walk away from anything less than 50/wk per machines...

[Sparta_Automation]

I agree with the others. Asking for a full year of gross sales...is a little much.

Travis

[moondog]

Mike,

Don't dig your hole any deeper right now. What I'm seeing are too many combo machine locations all doing more than $200 a month - really??? You'd need to service these things 6 times a month to do that.

This is a much better lot of machines than that first batch you posted but I agree with everybody else in that the price is too high.

At least the guy is being honest in that these are his scrub accounts.

At all costs, try to avoid combo machine only accounts - nobody wants them and you won't want them either once you work the system for awhile.

I don't want any accounts that do less than $500 per month - some of the other guys here might have a slightly lower threshold, but when you start adding up all your expenses and hopefully pay yourself, you'll see that we're not just being greedy.

Ps. How are you doing with that first batch of locations?

[Mike32110]

Technically when I buy a route I will ONLY pay 4 times the monthly gross. In this case I think it comes out to about 15,000, I would offer 6000 and no more because you can go out and buy used equipment and pay a locator about the same price as the offer of 6000. If you think about it he is asking you to put up a years gross if those numbers are even correct with used equipment before you make any of your money back. He is actually asking for the amount of money that would pay to replace that equipment brand new. If he doesn't accept your price be ready to walk away, he is way overpriced IMO. Hope this helps. Oh, if he does take the offer of 6000 be ready to replace all the locks immediatly because I'm sure he has an extra set lying around to rob you blind.

Okay, so a good rule for buying machines on location is 4 times the monthly gross? I guess of course if the equoipment is really nice, it might be worth more? Honestly, I don't know what it's like the in the US, but in the last 4-5 months of constantly checking on kijiji, the absolute best deal I have seen out of at least 15 was one where you'd make your money back in 6-7 months. Most seem to be 1-3 years. Some people selling locations in my area seem to be ridicolously overpriced, for example:

http://calgary.kijiji.ca/c-buy-and-sell-business-industrial-Vending-Machine-Business-18-Machines-Excellent-Investment-W0QQAdIdZ425434576

1600-2400 gross per month sales for ALL machines, equalling: 6400-9600 total (buddy wants 39k)

http://calgary.kijiji.ca/c-buy-and-sell-business-industrial-Vending-Business-For-Sale-W0QQAdIdZ425351250

This doesn't list sales at all, but it has saega 2500's, which pretty much mean it couldn't possibly do enough sales to make it worthwhile.

http://calgary.kijiji.ca/c-buy-and-sell-business-industrial-3-in-1-Vending-Machine-located-North-of-Calgary-20mins-4500-OBO-W0QQAdIdZ423664575

This one has the Antares combo machine that I've seen people sell used for less than 2k, buddy wants 4500 in location w/ no mention of sales.

NOW, here is the only other offer that I am seriously considering, and wanted some advice.

http://calgary.kijiji.ca/c-buy-and-sell-other-Coffee-Vending-Machine-for-Sale-4900-monthly-Sale-450-500-m-W0QQAdIdZ426070500

Buddy said it's a Genesis coffee maker, and the sales seem pretty damn impressive (I believe i make 70-80% markup on coffee, so that's about $3-375 profit per month, which would pay for itself in just over a year. I figure for a coffee machine it might be better to use a longer time for gross sales since the markup is so high.

So I guess what I am saying is that I haven't seen anything close to the 4 month rule that you use. Another consideration is that I live in Calgary, which has a booming econemy and generally lots of money. It doesn't seem like anything is that good of a deal for locations.

Now regarding the original ad, what about the Vendstar pop machine with 2800 sales. If the machine was good, what would be the highest you guys would offer him?

[dogcow]

Heres the thing with buying locations. Its very unusual to find good routes/locations for sale in the classifieds

a lot of deals are made between vending companies. Also don't be afraid to offer "insulting" offers. One guy

had advertised a solid location, but it had a junky old machine and no contract. He wanted a few thousand bucks

I sent him an e-mail explaining the bottom line is, the machine is only worth $500 and on location maybe $800 since

he admitted he lived too far to service it regularly, I had no idea how close he was to just being kicked out. I told him he will find most people who respond to craigslist ads are "tire kickers" and that I am a serious buyer with cash. Of course he was not receptive to the offer. As the months went by I saw the ad listed for less and less money. Every month or so I would respond and

reiterate my offer.

Finally after about 6 months he called me and admitted he was tired of dealing with "tire kickers" and people who would come by, check it out and then tell him they would be back as soon as the bank approved a loan lol, and that my price was probably about what it was worth.

When you're looking to buy locations you have to say no a lot. You will say no 99% of the time. I know how it is to start out and get excited about the business and you want revenue coming in, but if you want to be

involved in vending for the long haul you have to be more picky about what accounts you take. This is true for accounts you solicit but ESPECIALLY accounts you buy.

[Mike32110]

Mike,

Don't dig your hole any deeper right now. What I'm seeing are too many combo machine locations all doing more than $200 a month - really??? You'd need to service these things 6 times a month to do that.

This is a much better lot of machines than that first batch you posted but I agree with everybody else in that the price is too high.

At least the guy is being honest in that these are his scrub accounts.

At all costs, try to avoid combo machine only accounts - nobody wants them and you won't want them either once you work the system for awhile.

I don't want any accounts that do less than $500 per month - some of the other guys here might have a slightly lower threshold, but when you start adding up all your expenses and hopefully pay yourself, you'll see that we're not just being greedy.

Ps. How are you doing with that first batch of locations?

Thanks dogcow and sparta for your helpful comments.

Moondog, i am having some difficulty understanding your comment regarding 6 visits per month for a combo machine. Why would you visit a combo machine more often? I visit two of my combo machines biweekly, and 2 monthly, and this seems fine so far.

Thanks for the input on the machine quality too.

To me, 500$ worth of sales per month is a pretty large account. I guess since I have not tried getting my own accounts, i really don't know the system well yet. Do you think it would be worthwhile for me to possibly hire someone to try and get accounts for me? I'd raher pay someone a few hundred to do it instead of spending hours doing it myself, especially since I don't think I'm a good salesman .

My other locations are doing alright, actually I have good news that many of the sales have increased a bit since what I reported last. Thanks for all your help!

[mission vending]

Industry averages are about 50% of annual DOCUMENTED cashflow. A little less if the machines are old and/or no contract and a little more if newer equipment and/or contract.

[Mike32110]

Heres the thing with buying locations. Its very unusual to find good routes/locations for sale in the classifieds

a lot of deals are made between vending companies. Also don't be afraid to offer "insulting" offers. One guy

had advertised a solid location, but it had a junky old machine and no contract. He wanted a few thousand bucks

I sent him an e-mail explaining the bottom line is, the machine is only worth $500 and on location maybe $800 since

he admitted he lived too far to service it regularly, I had no idea how close he was to just being kicked out. I told him he will find most people who respond to craigslist ads are "tire kickers" and that I am a serious buyer with cash. Of course he was not receptive to the offer. As the months went by I saw the ad listed for less and less money. Every month or so I would respond and

reiterate my offer.

Finally after about 6 months he called me and admitted he was tired of dealing with "tire kickers" and people who would come by, check it out and then tell him they would be back as soon as the bank approved a loan lol, and that my price was probably about what it was worth.

When you're looking to buy locations you have to say no a lot. You will say no 99% of the time. I know how it is to start out and get excited about the business and you want revenue coming in, but if you want to be

involved in vending for the long haul you have to be more picky about what accounts you take. This is true for accounts you solicit but ESPECIALLY accounts you buy.

That's good advice again, i really appreciate it. I think that I am okay with a few less than desirable deals, however, since I just wanted to get my feet in the water. I am in no rush to expand anymore, as I am estimated a little side cash of ~10k per year profit (minus labour and gas) right now.

I should update you a little more on my plan here. I have a busy full time job, and generally do not have a huge amount of time. I make good cash at my job and am always getting more money to invest, so my plan is to ultimately get a self sufficient business going with the plan to eventually hire an employee to take up most of the work. My initial idea of starting a business was half to earn some side cash, and half for tax advantages (since I'm already in a decent bracket, I estimated the tax deductions will probably exceed my income from the machines right now). I am generally looking to expand by either buying locations, or hiring someone to find locations for me- I am not aware of any locators where I am from (it;s only a medium city with a population around 1 million).

I guess my long term plan would be to:

1. get initial base of machines, learn the ropes, get feet wet (doing this right now)

2. Get all licensing sorted out, and get proper understanding of the legal side of things (this is much more important when sales exceed 30k annually in Canada) (in progress, seems to be lots of conflicting information on this)

3.build very detailed website, get high rank on google, and do lots of advertising (in progress)

4. Constantly observe for good deals on equipment, or people going out of business/retiring, etc. , buy only if price is right (considering starting this step, but advice seems to contradcit things)

6. Design lots of marketing tools (brochures, etc.)

5. Hire an employee (hopefully on commision only) to go and find locations for me

6. Grow business until work is 16 hours per week, then hire an employee to stock the machines (I would do all admin stuff, and collect cash monthly from lockboxes).

This would essentially be my very summarized one year business plan. What do you think? Maybe I should start this reply as a thread of its own?

[dogcow]

Moondog, i am having some difficulty understanding your comment regarding 6 visits per month for a combo machine. Why would you visit a combo machine more often? I visit two of my combo machines biweekly, and 2 monthly, and this seems fine so far.

look at it this way in any machine especially drinks , you have a certain % of product thats going to sell really well, and the rest of it is just sort of like gravy. so lets say in a 7 select machine you might have 3 products that are staple sellers like coke, mt dew, and root beer (just ex.) everything else is kinda slow. So you want the most capacity on the big sellers. With a combo machine you have very limited capacity, so if you have high sales it means most likely the best selections are running out very often, therefore you have to service it a lot, and in that case ur losing money if u have to show up 6 times a month just to fill up the coke but nothing else. I have some smaller drink machines like DN 276 and i deal with this by simply running 2 of the high capacity cols with the best selling product BUT this has down sides too since that limits the # of options you can have and you WILL absolutely lose sales from that practice too.

To me, 500$ worth of sales per month is a pretty large account. I guess since I have not tried getting my own accounts, i really don't know the system well yet. Do you think it would be worthwhile for me to possibly hire someone to try and get accounts for me? I'd raher pay someone a few hundred to do it instead of spending hours doing it myself, especially since I don't think I'm a good salesman .

it will cost more than a few hundred, probably a few hundred a week plus commissions at the low end. vending sales is a long slow sales cycle, its not a slam dunk (usually). you have to put in a lot of work + follow ups to get something closed. It is best to do it yourself as you dont want someone representing your company if you do they need to be trained really well. it might be a good idea for you to get a "fronter" which is someone who goes and cold calls to get appointments , this person would try to set a time where you can talk with the decision maker (DM) about vending. The reason being you need to be experienced IN vending sales to do it correctly. Vending sales is not hard it just takes practice and quick thinking

[moondog]

Mike,

1. Combo machunes don't hold enough product to gross $500 a month unless you're servicing them constantly

2. Stay away from "locators". You can find enough bad accounts on your own if that's what you want

3. Small vendors have one huge advantage over the larger guys - PERSONALIZED SERVICE - don't underestimate this!!! Once you hire somebody to service your machines you'll lose much of that. You'll also find that one employee requires just as much paper work as fifty (payroll taxes etc)

4. You seem to know where you want go with this, which is a good thing, but be patient and learn the ropes before trying to sell your program.

5. Machines - It's not that I dislike the machines that are posted on Kiijii, it's that I HATE them (coffee machine excepted). Soda: multiprice Dixie, Vendo and Royal (my favorite). Snack machines: AP, AMS, Crane/national (maybe GPL) and Wittern (USI, FSI etc). Don't buy any machines not on this list.

Glad to hear your sales are picking up - got any soda machines going yet?

Ps. Dogcow is correct re: buying good accounts - they're few and far between. I work at this almost everyday and have sorted through probably 25 for every good one I've found. Your not going to build a good vending route overnight.

[dogcow]

2. Stay away from "locators". You can find enough bad accounts on your own if that's what you want

one thing i want to say here, theres a big diff between locators, fronters and sales in vending

a locator is a guy who calls thru the phone book and asks everyone they talk to "do you want a vending machine". when they get a yes they send you a location. avoid THESE type of locators for full line. its a waste of money. theres in-person locators who do the same thing, come in to town for a few days and secure locations. you can be 100% assured these locations will suck

theres also a fronter, or appointment setters, as i explained earlier this is someone with minimal training in vending sales who will do the "busy work" of sales basically making cold calls, and follow ups and setting up appointments with you to meet with the decision maker and sell your services. These guys can be a big asset, my father worked in sales for 30yrs every job he had they used fronters. I use one currently and he is great, he also provides me with intelligence so when i go in , i know what kind of business it is, what machines they have (if any) what they are looking for most in a vending company (commission, entertain customers, service) and basic information about the DM and how to handle them.

theres also vending sales, these are EXPERIENCED sales people who will do the full sales cycle from cold calls to closing, tho some in a bigger co will work with a fronting dept. these guys make a lot of money and its well earnered, they are experience in closing big accts. anyone whos talked to RJT has talked to a very good vending sales guy. coinvester on here has seen him in action. these guys can build your business BUT they do not come cheap they expect a good full time salary and it will take weeks or months to get a pipline going where accts are getting closed.

my advice is , if u expect to be in this business any length of time you NEED to learn about sales, vending sales is easy than most sales because you arent asking the customer to spend money, in most case you are putting money in the customers pocket.

i suggest picking up the book "the accidental salesperson" from amazon or half.com and reading it, its a good introduction to becoming a sales person .

if you are a shy type (i am too) its going to be a tough road BUT it can be done, i worked hard, i joined toast masters and now i am comfortable with sales and an accomplished public speaker. I cannot emphasies enough what a great group toastmasters is, if you are not comfortable with sales or speaking in public you will learn so much if you work the program.

[moondog]

Yep,

RJT and probably a few. others would be the exception to the rule. He did have a program where for $600 you'd get X amount of phone consultation but I have'nt talked with hum in a couple of years so I don't know if he still does that. I do believe that any money you spent with him would be a solid deal.

RJT will work with anybody of any size - he just loves the vending business. I'm just not big enough to handle the larger "machine bank" accounts that he can get you.

[Mike32110]

look at it this way in any machine especially drinks , you have a certain % of product thats going to sell really well, and the rest of it is just sort of like gravy. so lets say in a 7 select machine you might have 3 products that are staple sellers like coke, mt dew, and root beer (just ex.) everything else is kinda slow. So you want the most capacity on the big sellers. With a combo machine you have very limited capacity, so if you have high sales it means most likely the best selections are running out very often, therefore you have to service it a lot, and in that case ur losing money if u have to show up 6 times a month just to fill up the coke but nothing else. I have some smaller drink machines like DN 276 and i deal with this by simply running 2 of the high capacity cols with the best selling product BUT this has down sides too since that limits the # of options you can have and you WILL absolutely lose sales from that practice too.

it will cost more than a few hundred, probably a few hundred a week plus commissions at the low end. vending sales is a long slow sales cycle, its not a slam dunk (usually). you have to put in a lot of work + follow ups to get something closed. It is best to do it yourself as you dont want someone representing your company if you do they need to be trained really well. it might be a good idea for you to get a "fronter" which is someone who goes and cold calls to get appointments , this person would try to set a time where you can talk with the decision maker (DM) about vending. The reason being you need to be experienced IN vending sales to do it correctly. Vending sales is not hard it just takes practice and quick thinking

Fair enough, that all makes sense. My logic would be for the quiter combo machines, if they happen to run out of one or two selections, I would just have to let them stay empty until i went in to service it. I guess that it looks unprofessional though.

Mike,

1. Combo machunes don't hold enough product to gross $500 a month unless you're servicing them constantly

2. Stay away from "locators". You can find enough bad accounts on your own if that's what you want

3. Small vendors have one huge advantage over the larger guys - PERSONALIZED SERVICE - don't underestimate this!!! Once you hire somebody to service your machines you'll lose much of that. You'll also find that one employee requires just as much paper work as fifty (payroll taxes etc)

4. You seem to know where you want go with this, which is a good thing, but be patient and learn the ropes before trying to sell your program.

5. Machines - It's not that I dislike the machines that are posted on Kiijii, it's that I HATE them (coffee machine excepted). Soda: multiprice Dixie, Vendo and Royal (my favorite). Snack machines: AP, AMS, Crane/national (maybe GPL) and Wittern (USI, FSI etc). Don't buy any machines not on this list.

Glad to hear your sales are picking up - got any soda machines going yet?

Ps. Dogcow is correct re: buying good accounts - they're few and far between. I work at this almost everyday and have sorted through probably 25 for every good one I've found. Your not going to build a good vending route overnight.

Once again, thanks!

1 & 2. Thanks, and good to know.

3. I understand that I would have a slight decrease, but with me working F/T in order to really make money I figured this step is necessary eventually.

4. It's more just geetting a second opinion on my current business plan, I'm learning alot from this website!

5. I am writing down that list and it is my new bible. What are the acceptable list of coffee machine brands?

Thanks, no pop machines yet as I have not been trying to find any locations yet. I have just got a website that I'm advertising on google, and so far I get abuot one lead per week. Just got a lead for 200 employee store, see my other thread .

one thing i want to say here, theres a big diff between locators, fronters and sales in vending

a locator is a guy who calls thru the phone book and asks everyone they talk to "do you want a vending machine". when they get a yes they send you a location. avoid THESE type of locators for full line. its a waste of money. theres in-person locators who do the same thing, come in to town for a few days and secure locations. you can be 100% assured these locations will suck

theres also a fronter, or appointment setters, as i explained earlier this is someone with minimal training in vending sales who will do the "busy work" of sales basically making cold calls, and follow ups and setting up appointments with you to meet with the decision maker and sell your services. These guys can be a big asset, my father worked in sales for 30yrs every job he had they used fronters. I use one currently and he is great, he also provides me with intelligence so when i go in , i know what kind of business it is, what machines they have (if any) what they are looking for most in a vending company (commission, entertain customers, service) and basic information about the DM and how to handle them.

theres also vending sales, these are EXPERIENCED sales people who will do the full sales cycle from cold calls to closing, tho some in a bigger co will work with a fronting dept. these guys make a lot of money and its well earnered, they are experience in closing big accts. anyone whos talked to RJT has talked to a very good vending sales guy. coinvester on here has seen him in action. these guys can build your business BUT they do not come cheap they expect a good full time salary and it will take weeks or months to get a pipline going where accts are getting closed.

my advice is , if u expect to be in this business any length of time you NEED to learn about sales, vending sales is easy than most sales because you arent asking the customer to spend money, in most case you are putting money in the customers pocket.

i suggest picking up the book "the accidental salesperson" from amazon or half.com and reading it, its a good introduction to becoming a sales person .

if you are a shy type (i am too) its going to be a tough road BUT it can be done, i worked hard, i joined toast masters and now i am comfortable with sales and an accomplished public speaker. I cannot emphasies enough what a great group toastmasters is, if you are not comfortable with sales or speaking in public you will learn so much if you work the program.

Awesome info, thanks! So it seems that locators are totally useless. Fronters might be a good idea for someone like me for the time being, while I get more experienced and comfortable with sales. Eventually, i would like to get a vending sales person.

I am very confused by who is "RJT" and "coinvester"? They're people that do this stuff long distance?

Regarding the sales, I think the big issue is more time.

Yep,

RJT and probably a few. others would be the exception to the rule. He did have a program where for $600 you'd get X amount of phone consultation but I have'nt talked with hum in a couple of years so I don't know if he still does that. I do believe that any money you spent with him would be a solid deal.

RJT will work with anybody of any size - he just loves the vending business. I'm just not big enough to handle the larger "machine bank" accounts that he can get you.

If you guys could fill me in as to what RJT is, it would be appreciated! Thanks.

[dogcow]

Fair enough, that all makes sense. My logic would be for the quiter combo machines, if they happen to run out of one or two selections, I would just have to let them stay empty until i went in to service it. I guess that it looks unprofessional though.

every time someone walks up to the machine with an empty selection that is costing YOU money, empty selection = lost sales. selections should be low BUT NOT EMPTY when u go to service.

RJT is a member on here lookin the member directory he used to post a lot but not late.y

[moondog]

Yep, Pay attention to your empties - that's whats selling.

RJT is pretty much a vending Guru and has worked with a lot of people, both big and small, in vending for many years. You might PM him with your situation and see what he can do for you.

[kiwi]

"Genesis Coffee Machine"

Just wondering how you worked out your markup/margin on your coffee? Did you work it out yourself or did the person selling you the machine tell you that you would make 70-80% markup/margin?

How much are you charging per cup & what are you paying for product & how much product is going into each cup & how often you are servicing machine is the only true way of working out your costs.

Genesis machines are good machines but you would need to look into how much the machine is worth secondhand. Seems a little bit high to me but I don't know what the vending market is like where you live.

[mission vending]

Coinvester is a member that has used RJT's services personally. Here are a couple of threads about his experience.

http://vendiscuss.net/index.php?/topic/9517-my-experience-with-pro-vending-consultants-rjt/

http://vendiscuss.net/index.php?/topic/11276-round-2-with-pro-vending-cousultants-rjt/

I personally have not used his services but we have traded parts and spoken on the phone a few times, he is a really stright up guy which is really rare in this industry.