vendman0729 Posted January 19, 2013 Share Posted January 19, 2013 I have a USI 3155b combo machine at a nursing home that does $250 month. The machine has given me problems here and there due to it being the gf series and not the hr but at least their fixable. The location is descent and I can go there every 2 weeks. I have had the location now for a year with no commission. All of a sudden I went in a week ago and the head main manager in charge of the place said "I have bad news for you, you gotta starting paying me $50 every month". I was like wow that's a lot of money and eventually talked her down to $25/month commission. Afterwards I was kind of mad and thought why the heck am I giving her money. Even for $25 that means I would have to sell over 60 sodas just to make up that kind of money. Today after I filled up the machine she said you owe me $25. I said why do I owe you $25. She said because of electricity and that the company requests like $50 or $75 normally from the vendor and that she was still giving me a good deal. I bought the machine from a guy who had it there and this same head manager filled up the machine for him and even kept all the money except she would give him $20/month. I thought this was weird too I know. She said that I am not giving the $25 to her, but the company and that I can write a check in the company's name. I was still a little skeptical and I did not give her the $25. I said I would like to talk to someone above her like the owner. She was kind of mad and said shes in charge of the entire building and that if she wants she can even kick out my machine. I felt like this lady thought she was such a big shot or something. I didn't like her attitude either. At the same time I didn't want to go too crazy about it otherwise I can loose the location and its a descent location. At this point I am waiting for a call from someone above her. She said they will call me and then call the manager back. What should I do? Should I just give up the $25 every month or should I contact someone above her myself and talk to them. I feel like I should have some sort of proof, documentation or at least see someone above her who is rather higher up then answer to someone who just works there even though I know shes the main manager. I told my self to never pay commission but looks like I might not have a choice in this situation. The main things I am going to tell the bigger boss is that 1. I provide a great service and convenience for the people there 2. The people there are happy and like me 3. I don't make enough money to justify paying $25 every month 4. Also mention that the manager used to take all the money from the machine so maybe it can show that shes just being weird and greedy. I don't know if I will even get a call from someone above her because for all I know what if she's making all this up? Any help would be much appreciated for this weird unfortunate situation haha. Link to comment Share on other sites More sharing options...
reel Posted January 19, 2013 Share Posted January 19, 2013 Hi Vendman, Its a tough situation, and something i have experienced myself only just recently. Generally i find the biggest whingers and complainers often comes from the smaller locations, small locations often over inflate their value to you as a vending operator......sometimes you have to make the call whether its worth giving in to the location if you think its valuable to you, or otherwise make a stand and tell them you were unaware of a commission structure as you havent been made aware of it in the past. since you have been vending on the location............then say if you want to hold the location that as your an extremely valuable customer and in aid of fostering good relations im more than happy to pay you the requested $25 monthly in rebate, however in order to afford this and make servicing your business viable i will need to make some small adjustments to the product pricing which i trust you can understand....... From my point of view not being in the USA $250 per month in terms of monthly turnover is insignificant and i would only offer them the $25 per month in return for an increase in retail pricing to offset the requested rebate. If its a shared location you could use this to your advantage by agreeing to the increase in return for exclusitivity on the location?. I vend at quite a few nursing homes and hospitals and i have found the turnover varies greatly according to the nationality and ages of staff onsite, some are great and some very ordinary lol. Here theres a lot of asian nurses and on the whole they are poor spendors when it comes to snack vending machines. I have quite a few USI Combos mainly the VT5000 so i am not certain as to the particular type of vendor you have onsite in regards to vendor size and the cost of investment to provide a more detailed response. Does the vendor onsite has a note validator and what kind of products do you vend in the snack section of the vendor,?...........maybe you can place more profitable items in the vendor at the expense of lower margin product to try and increase profitability. Good luck!. Link to comment Share on other sites More sharing options...
dogcow Posted January 19, 2013 Share Posted January 19, 2013 With all due respect you really handled it poorly and I would not be surprised if you got kicked out. Link to comment Share on other sites More sharing options...
moondog Posted January 19, 2013 Share Posted January 19, 2013 Let's see, You're doing $250 a month (pretty good for a combo) so you're netting $125 and you're servicing it twice a month. Now they want 20% of your gross profits? This account was no winner in the first place - you'd need to be in the $500 + a month range for it to be considered a good account (impossible with a combo). 20% commission on an account that a lot of guys (like me) wouldn't want is outrageous. Pull that machine and get yourself a decent account - and don't feel bad because you're not really losing much here. Link to comment Share on other sites More sharing options...
mission vending Posted January 19, 2013 Share Posted January 19, 2013 With all due respect you really handled it poorly and I would not be surprised if you got kicked out. Yep, that phone call you are waiting for is the call to come pick up your equipment. About the only way you could have pissed her off more was to go tell her to F off, if it was me standing there you would have had you machines unplugged and a weeks notice to get them out. Let's see, You're doing $250 a month (pretty good for a combo) so you're netting $125 and you're servicing it twice a month. Now they want 20% of your gross profits? This account was no winner in the first place - you'd need to be in the $500 + a month range for it to be considered a good account (impossible with a combo). 20% commission on an account that a lot of guys (like me) wouldn't want is outrageous. Pull that machine and get yourself a decent account - and don't feel bad because you're not really losing much here. @moondog, if you look at the OP he negotiated the commission from 50 per month (20%) down to 25 per month (approx 10%) which is kinda the norm around here at least. I also agree with the comment that its not a very good account doing 250 a month. That said, as a small vendor it is sometimes better to have a small account than no account which is what is about to happen here. Vendman, you've got to remember that this is a service business and you are providing the service at their request and permission. Paying a commission or flat rate is a normal course of doing business in the vending world. You will at some point need to look at your pricing and increase prices, but right now if you want to keep the account its out of the question. If I were in your shoes I would be back there Monday morning and apologize to the manager, tell her you reacted badly because you weren't feeling well, had a bad day or whatever and hand her a check. Leave the "pay to the order" line blank and put on the "memo" line "Dec 2012 commission to ____". Now you have a record of paying the commission, who cashes it does not matter and frankly its none of your business. All the matters is that you will be able to prove at any time that you have paid the commissions as agreed. If the manager is keeping it for herself that's between her and her boss when/if it is discovered. Good luck and let us know how things work out on this. Link to comment Share on other sites More sharing options...
moondog Posted January 19, 2013 Share Posted January 19, 2013 Yep, that phone call you are waiting for is the call to come pick up your equipment. About the only way you could have pissed her off more was to go tell her to F off, if it was me standing there you would have had you machines unplugged and a weeks notice to get them out. @moondog, if you look at the OP he negotiated the commission from 50 per month (20%) down to 25 per month (approx 10%) which is kinda the norm around here at least. I also agree with the comment that its not a very good account doing 250 a month. That said, as a small vendor it is sometimes better to have a small account than no account which is what is about to happen here. Vendman, you've got to remember that this is a service business and you are providing the service at their request and permission. Paying a commission or flat rate is a normal course of doing business in the vending world. You will at some point need to look at your pricing and increase prices, but right now if you want to keep the account its out of the question. If I were in your shoes I would be back there Monday morning and apologize to the manager, tell her you reacted badly because you weren't feeling well, had a bad day or whatever and hand her a check. Leave the "pay to the order" line blank and put on the "memo" line "Dec 2012 commission to ____". Now you have a record of paying the commission, who cashes it does not matter and frankly its none of your business. All the matters is that you will be able to prove at any time that you have paid the commissions as agreed. If the manager is keeping it for herself that's between her and her boss when/if it is discovered. Good luck and let us know how things work out on this. Yep Mission, Vendman could have handled that situation more tactfully. It's always better to bow out gracefully than burn bridges. In regard to paying a commission on this account, I hate to see small vendors in this situation as I've been there myself. When I first started I wasn't too picky about the accounts I picked up - it took me the better part of last year to clean up that mess. One thing that I noticed real quick was that the marginal accounts always wanted a commission while the better accounts just wanted good service. You know the margins better than me - this guys pulling in $125 a month ($100 with commission) minus his COS. What happens when he needs another BA or coin mech, not to mention that compressor 2 or 3 years down the road? Obviously, the questions rhetorical - I just hate to see him spin his wheels Link to comment Share on other sites More sharing options...
Poplady1 Posted January 19, 2013 Share Posted January 19, 2013 A combo unit earning $250 a month is good and worth keeping. You didn't tell us what your current pricing is on the products. My response to her would have been "OK I will be happy to do the commission but this is our base rate pricing and we will need to adjust the pricing to cover the commission." Then let her decide what she wants to do. Give her an example that a base rate can is .75 with a dime per can its .85 with .25 per can it would be 1.00. But it is probably too late. Once you treat the "head main manager" that way, expect to lose the account. Commission is part of this business. Be prepared to handle this better in the future. If you keep this account be sure to apologize the this manager. Link to comment Share on other sites More sharing options...
Sparta_Automation Posted January 19, 2013 Share Posted January 19, 2013 If I were in your shoes I would be back there Monday morning and apologize to the manager, tell her you reacted badly because you weren't feeling well, had a bad day or whatever and hand her a check. Leave the "pay to the order" line blank and put on the "memo" line "Dec 2012 commission to ____". Now you have a record of paying the commission, who cashes it does not matter and frankly its none of your business. All the matters is that you will be able to prove at any time that you have paid the commissions as agreed. If the manager is keeping it for herself that's between her and her boss when/if it is discovered. Good luck and let us know how things work out on this. I agree....return monday with a check, however I would NEVER leave the pay to the order section blank. The commission is not for the manager, but the owner of the business. Make it payable to the business and move on. If she balks at this, then you know that she is being dishonest...and then you have to decide if it's worth continuing a business relationship with them. In all reality, $125 is not worth your integrity! But then again, that is just my opinion, take it for what it's worth! Travis Link to comment Share on other sites More sharing options...
vendman0729 Posted January 19, 2013 Author Share Posted January 19, 2013 Wow thanks a lot guys for your help. So many responses. You guys made some really great points. I am surprised I forgot I can increase my prices to maybe makeup for the $25 commission. The prices have stayed fixed for a year now. I hate increasing prices but I guess I now have no choice. My prices are All drink cans and 20 oz mineral springs water- .70 (maybe increase to even .85) 1oz Normal Chips- .60 (increase to .75) Chex, cookies e.t.c- .75 (increase to .85) Crackers- .50 (increase to .65) Candy bars- .80 (increase to $1) Pastries (Texas Buns e.t.c)- .80 (increase to $1) Plus this way I won't have to keep running out of nickels haha. Can't stand it (eyes rolling). Maybe I somewhat handled it poorly but I am pretty sure I won't get kicked out unless I just don't pay any commission in a month or so. I have a gut feeling after being there for a year and somewhat knowing her (we have always been nice to each other) that I can keep the account. As long as I pay the $25 I am certain that I am ok and plus she never told the person above her that I don't want to pay the commision (she made the phone call in front of me). Now I just gotta figure out after I write her the check this week if I should increase my prices now or wait a little. Kind of confused. Also is it okay to give her cash of $25 in all 1's or this kind of rude? Just wondering cause it's kind of convenient for me. I have a $500 account with no commission and I don't think I will ever have to pay a commission. I can understand the small and big account relationships and hopefully it will only be a matter of time that I won't even depend on this little account. I love vendiscuss. And yes maybe I will say sorry as well to her. Link to comment Share on other sites More sharing options...
mission vending Posted January 19, 2013 Share Posted January 19, 2013 I wouldn't try to increase prices for at least a month or two, you need to rebuild some goodwill. ALWAYS pay with a check so if there is ever any question about if you paid and how much you have proof that you did. Link to comment Share on other sites More sharing options...
mission vending Posted January 19, 2013 Share Posted January 19, 2013 I agree....return monday with a check, however I would NEVER leave the pay to the order section blank. The commission is not for the manager, but the owner of the business. Make it payable to the business and move on. If she balks at this, then you know that she is being dishonest...and then you have to decide if it's worth continuing a business relationship with them. In all reality, $125 is not worth your integrity! But then again, that is just my opinion, take it for what it's worth! Travis Over the years I have had many different situations arise. Checks going to the business, to the manager for monthly lunches to managers or owners taking the commission for themselves. I currently have a situation where the manager is running a local operation for a company based in Canada and I know he is taking the money for himself. If anyone ever comes asking I can show that commissions have been paid as agreed and can prove it, the local manager OTOH will have some explaining to do. I don't see that it is my responsibility to report him and cause myself a lot of headaches. Link to comment Share on other sites More sharing options...
kiwi Posted January 20, 2013 Share Posted January 20, 2013 Hi Vendman, I wouldn't be to hard on yourself for how you reacted as I have made the same mistakes myself once or twice in the past.. as long as you learn from them & try to have solutions to customer demands you will be able to handle it better the next time around. The first thing I would do would be to apologise to her & I would pay the $25 commission she is requesting even though I think this is a little too high myself. I wouldn't look at rising prices until the dust settles & you have a chance to rebuild your relationship with her. I am not in favour of paying set amounts of commission each month. I prefer to pay a percentage of turnover or a fixed amount per vend & adjust my pricing to match the amount I give. The reason I do this is because if you are paying a set amount each month & your turnover drops for some reason you will still have to pay $25. The only time I would pay a set amount is when I am sure it is working in my favour. It kind of made it hard for you from the start because of how the site operated before you took it over. Link to comment Share on other sites More sharing options...
Walta Posted January 20, 2013 Share Posted January 20, 2013 Be aware if you do a 10% price increase you will likely sell 15% less product and see a 5% loss in gross revenue for at least a few weeks. If you really want to get thrown out of the this location Post a sign inside the glass that the price increase is due to a change in the commission paid to XYZ corporation. Walta Link to comment Share on other sites More sharing options...
vendman0729 Posted January 20, 2013 Author Share Posted January 20, 2013 Yes kiwi I agree that it was okay to be upset but just maybe not act about it like the way I did. I guess I acted like that because I have always been bullied my whole life and I told myself not to put up with any ones golpher. What makes me mad is when these head managers make these out of nowhere crazy decisions such as commission. How the heck do I even know what their saying is right. For all I know it can be crap that their just making up. Such as wanting commission and then maybe even keeping it for themselves. I fully believe it is okay for a vendor to go above the person in charge of the manager onsite to make sure that what their saying is true. We vendors need to look out for ourselves. However for a small account like this I will just suck it up and give up the $25 every month. When things like this occurs, its probably not a one time thing though. Maybe in a few months the same manager will instead want $50. This can go on forever. At least in a worse case scenario, the location is better off then the vendor. Vendors need locations more then locations need vendors. A vendor who increases his prices can be kicked out and the location can get a new vendor. But it is harder for a vendor to leave themselves and find a new location. Another words I feel like vendors go through more crap and have a less say in things then locations themselves. This is the biggest risk in this business I believe. It's reasons like these that made me fight this commission situation rather then just say sure that's fine. At least she now knows that I will put up a fight and I think this goes a long way in this business. I knew I wasn't gonna get kicked out otherwise I wouldn't have acted like that. I think it's okay to pay a set amount commission as long as your sales figures are conservative. I know I probably average more like $300/month at this location but I still say $250 anyways just because it has happened to me a few times. Having the manager on site previously collecting all the money and now wanting money would only naturally make a vendor think that they are trying to get something for themselves. Walta you made a good point about revenue going down for a few weeks and I don't mind having to suck it up at first. For smaller accounts, I feel like higher net profits become more important then gross revenue even though I know for this situation the commission off sets the higher prices. And yes nothing would make me more happy then placing a sticker inside the window saying prices increased due to your head manager and the xyz corporation. If only I can do this now because I didn't care about the account haha. One day I will be able to do this. One day . Link to comment Share on other sites More sharing options...
TKK Posted January 20, 2013 Share Posted January 20, 2013 Man ur prices are pretty low. Jack em up. Your cogs are high. I sell almost everything at $1 $1.25 .75 don't like the .85 .65 stuff like quarters and dollars lol. You did handle it poorly a $250 a month place for a combo isn't bad in my book. Where will u place that machine now? Just raise everything 10% and there's your comission. Easy. If employees ask tell them everything is going up and you pay commissions now. How can you sell candy bars at .80? That's like a 75% cog I've had similar problems with my bulk. A dude saying to leave half the cash. He was just an employee. Then said to take it away that he's incharge. Talked to the owner telling her I had a bottle of wine for her for Xmas and then told her about it she said to ignore that guy as he was getting fired again. Last time he said he was gonna hide my machine. It happens. Link to comment Share on other sites More sharing options...
vendman0729 Posted January 20, 2013 Author Share Posted January 20, 2013 Thanks TKK. Can you tell me what I should be selling my items for though in a machine which is in a nursing home. It's obviously a small nursing home and the majority of the people are african american. I mainly want to know how much I should sell my drinks for. I haven't been up to date on the current prices for items in vending machines but now days I am even seeing candy bars for $1. I feel like .85 for a can is also starting to become standard. I don't want to make cans .75 cause that won't help with commission much but at the same time I feel like $1 just for a can is too high. Maybe before I raise the prices I will get the head manager a gift card to her favorite restaurant or a fruit gift basket. Link to comment Share on other sites More sharing options...
dogcow Posted January 20, 2013 Share Posted January 20, 2013 Vendman ur posts are making me pull my hair out,you have such the wrong attitude its unreal. You could have easily defused the situation and possibly even got away with no commission if u had handed it properly. I'm on my cellphone so I can't type everything I want to say but in my business the person in charge of the vending is treated like god,jesus,moses,mohammed and buhdda all rolled in to one. Sometimes its the owner,sometimes his son or wife,sometimes the manager or just the HR lady but I treat them all with respect like a big shot because they make your life wonderful or miserable. Many times vending is the only thing where they really have some power at work and if you respect that you can get away with a lot,if you don't they can turn a $250/mo asset into a giant paperweight in your garage. Link to comment Share on other sites More sharing options...
mission vending Posted January 20, 2013 Share Posted January 20, 2013 Well said dogcow. Vendman for pricing a good rule of thumb is to double your cost and round up. Link to comment Share on other sites More sharing options...
snack dude Posted January 20, 2013 Share Posted January 20, 2013 Vendman, I am not going to pile on you, I believe you realize your mistake and you have gotten some great advise here. Dogcow is correct in the fact that you should treat your contacts with respect. But its ok to stand up for yourself and ask that you be treated with respect also. Theres just better ways of doing that. Some people are just nasty at their core and they believe the way to do buisness and to validate that they are important is to treat people like garbage. I gave up the largest account I ever had, 9 machines averaged 800 to 1000 a week, the people there were so nasty that it got to the point that I did not want to go there. It was just one impossible request after another.till finally I had found a couple of other locations to move all the machines to. Now they are all placed and I do not have to put up with them. Talked to a friend of mine in the business a while back and he told me they are on their 3rd different vendor since I left. Theres just no dealing with some people and life is too short for that. Just my .02 Link to comment Share on other sites More sharing options...
moondog Posted January 20, 2013 Share Posted January 20, 2013 Vendman, I am not going to pile on you, I believe you realize your mistake and you have gotten some great advise here. Dogcow is correct in the fact that you should treat your contacts with respect. But its ok to stand up for yourself and ask that you be treated with respect also. Theres just better ways of doing that. Some people are just nasty at their core and they believe the way to do buisness and to validate that they are important is to treat people like garbage. I gave up the largest account I ever had, 9 machines averaged 800 to 1000 a week, the people there were so nasty that it got to the point that I did not want to go there. It was just one impossible request after another.till finally I had found a couple of other locations to move all the machines to. Now they are all placed and I do not have to put up with them. Talked to a friend of mine in the business a while back and he told me they are on their 3rd different vendor since I left. Theres just no dealing with some people and life is too short for that. Just my .02 Amen Snack Dude, I couldn't have said it better myself. Like all businesses it's a matter of give and take. A good business relationship should be a "win, win" for both parties -short of that you need to know when to pull the plug. Link to comment Share on other sites More sharing options...
Chocolate Bar W / Nuts Posted January 20, 2013 Share Posted January 20, 2013 I feel your pain, Vendman! It's just one of those unfortunate moments where you were blindsided & not expecting a right hook like that and unfortunately you didn't have a chance to explain things in a thoughtful & measured way, being caught off guard like that. She obviously doesn't understand our industry anymore than she probably understands american football! A lot of times it's also about educating our contacts about how commission percentages & payments are calculated in the vending business. If she was filling the machine herself and had her hands on the cash, then she's probably under the mistaken idea that very little of the money goes towards cogs & cos and most of the money in the BA and coin box is going into your pocket! She probably has no idea about what's all involved $$$wise with running a vending operation. Sit down with her & explain how our commission structure is set up. There are lots of great bullet points in this thread to think about. Personally, I hate paying commission. I pay no commissions to my current accounts & I let prospective accounts know right up front that I don't charge them to have my equipment and that I don't pay them to have my equipment. You're right in saying that vending operators are kicked around & treated with total disregard even more so than the janitor, but we as professionals have to take the high road & treat our contacts & patrons with the upmost respect & courtesy, including the janitor too! I kill 'em with kindness, I kill 'em with awesome equipment, I kill 'em with great service, I kill 'em with a good variety of products and competitive pricing & if that's not good enough and they demand a commission, I kill the account!! That's just my personal approach Work with her to the best of your professional ability & don't let her get you down, soldier! Link to comment Share on other sites More sharing options...
TKK Posted January 21, 2013 Share Posted January 21, 2013 Pastries like honey buns cinnamon buns zingers cupcakes etc $1.25 Cans .75 Corn nuts $1 All chips $1 don't sell the small bags I've compared them at the sane time with the 30 bag bigger ones at $1 they sell way more Gardettos $1 Knotts cookies $1 Chex mix $1 Nutty bars $1 Oreo 6 pack $1 Japanese peanuts .60 Peanut butter crackers .60 Pmnm cookies $1 Famous famous cookies $1 Grandma chocolate chip cookies $1 Etc My biggest cog product is combos I sell for $1 and you pay .44c I do not sell chocolates or skittles or pmms starbursts etc. These prices work great for me and I wouldn't price any lower. People know things are higher and for me personally before vending I wouldn't not buy a bag of chips for $1 because I saw .85 chips somewhere else..15 c more is nothing plus who wants to Cary change On my bad accounts I feel like I'm doing them a favor and on my great accounts I feel like they are my managers Link to comment Share on other sites More sharing options...
QualitySelectionsJ Posted February 10, 2013 Share Posted February 10, 2013 I agree with them. Let things cool off and then raise the prices. You're in the biz to make $. Always be polite to the bosses, it's strictly business. These guys know there stuff. I appreciate Vend Discuss. Link to comment Share on other sites More sharing options...
AngryChris Posted February 12, 2013 Share Posted February 12, 2013 Everyone has given you stellar feedback here. The consensus is clearly that you should NOT handle a situation like this with an attitude of "Oh yeah? Why should I?" Look, in this business, you need to act on a few key principles (at least I do it this way): 1) It's better to make some profits than to make NO profits 2) It's better to make $0 profits than to LOSE profits. 3) You gotta kiss the feet of the person who is in charge of the account. It's amazing what a free product or two can do in a location when given to the right person(s). 4) People forgive you when they like you so make yourself worth-liking. 5) Nursing homes are often part of HUGE conglomerates that are under contract with national vending management services. Some nursing home managers may be doing you a FAVOR by demanding a commission and then offering to negotiate down. 6) My final lesson here is this: it takes some economics to figure things out but raising prices does not necessarily mean higher profits. Sensitive locations will stop buying your products and bring in their own if your prices are too high. The only time I raise my prices significantly like you proposed (and they were significant increases) is when I have a location that I have little interest in and they WANT me to stay. In this kind of an account, I will negotiate to stay if prices increase; the ball is in my court because people LIKE ME and my prices are REASONABLE. Link to comment Share on other sites More sharing options...
mission vending Posted February 12, 2013 Share Posted February 12, 2013 Hey, Chris been awhile since you've been around, still angry? Link to comment Share on other sites More sharing options...
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