How to compensate route driver?

[Priusjames]

Hello, knowledgable ones-

I may find myself in the position to need a route driver. I thought I'd ask how that's normally handled, so I can hit the ground running.

I'm interested to know if people with paid route drivers (who care to share, even if by pm) about the best approach to take in regard to compensation.

Is the pay an hourly rate? (Via something like consultant agreements)

Salary?

Is pay tied to performance (some small percentage of sales)?

I would want to make sure to take care of this person, if you know what I mean.

Thanks

James

[indiana]

I'll send you a PM.

[Rick]

I sure would appreciate a copy of that PM.

[Poplady1]

Once you think about adding a route driver, you will need to find a good way to audit your income and product. As far as paying them, we paid hourly with a bonus. Looking back I think hourly would have been easier on all of us. I am some of the others will have good suggestions for you too.

[moondog]

The biggest down side to hiring employees is all the reporting to State and Federal agencies. When I had 50 employees, we did it in house. But after I sold that business and shrank back to 2 employees, I used a payroll service. They technically hire the people and do all the reporting and cut the payroll checks where you just pick the people and pay the service a lump sum each payroll period. This sum includes their fee but, at least in my situation, the fee was less than what I had paying for Workman's Comp (which was included in the lump sum).

They're usually so big that they can negotiate much better insurance rates than I ever could so that in the end, my payroll expenses actually went down while I didn't have to deal with all that paperwork anymore.

[mission vending]

Hello, knowledgable ones-

I may find myself in the position to need a route driver. I thought I'd ask how that's normally handled, so I can hit the ground running.

I'm interested to know if people with paid route drivers (who care to share, even if by pm) about the best approach to take in regard to compensation.

Is the pay an hourly rate? (Via something like consultant agreements)

Salary?

Is pay tied to performance (some small percentage of sales)?

I would want to make sure to take care of this person, if you know what I mean.

Thanks

James

Here is a good discussion on this topic, there are other older threads that discuss as well if you want to look back into the archives.

http://vendiscuss.net/index.php?/topic/14352-how-much-do-you-pay/

[dapoopta]

Can you 'contract' a drive and avoid insurance and other benefits required by the state? Then you can give them a 1099misc at the end

[moondog]

Can you 'contract' a drive and avoid insurance and other benefits required by the state? Then you can give them a 1099misc at the end

No,

If they look like an employee and act like an employee then they're an employee. To simply list them as independent contractors is a one way ticket to a war with the Labor Board - something you don't even want to think about .

[indiana]

I sure would appreciate a copy of that PM.

I cannot publish personal information about my driver or how much I pay him on an open-to-the-world forum. Here's essentially all the information from my PM:

A route driver--finding the right person, trusting someone to operate your business, handle your cash and personally represent your company to your locations (potentially harming or losing those relationships)--is such a tricky balancing act.

I currently have a regular, 8-5 job, so servicing the route during the week is tough (and certainly cannot be done regularly). Several of my accounts are not open on weekends, either.

So, I employ a driver that basically does everything--he picks up my van, keeps track of inventory, purchases inventory (he's on my sams business account), stocks the machines, collects money and deposits cash into a bank account.

In regard to what I pay him--I pay him as much as I can. A happy, well-paid employee is better motivated, more likely to have your best interests in mind, and less likely to steal. Of course--having a route driver requires a great deal of trust and taking on additional liabilities--so creative cash controls, wherever possible, and insurance are good for business.

[AZVendor]

First of all, there is no route driver in the world who will care about your accounts as much as you do. You can train them, audit them, question them, correct them and they still won't do it like you do. The best you can hope for is a concientious person who likes and cares about people, who is a self starter and is polite and responsible. When you find this person (and before, actually) you must pay them a living wage or better. Even a moral person may be tempted to steal if they don't feel they are respected or appreciated.

Before you hire a route driver, you must know the business yourself - what your accounts should be doing, where all the locations are and how to get to them, who the contact people are, how your machines work - basically how to run your business. Just as important, you must have cash and inventory controls in place. It is easiest to do this with your first employee than after you have hired 2 or 3. Planning this carefully before the first hire would be very smart.

Cash controls are having meters on every machine, no exceptions. Single price machines need can counters and snack machines need cash meters. Some older snack machines may not have a meter and then you might be able to wire in a cash meter, update the electronics or you have to do inventory control methods. All of this is called "Route Accountability" and is the reason so many vending software companies exist. Meters are read and recorded each time money is collected. Each machine is counted seperately, not aggregated together, and the new meter minus the old meter times the vend price is the cash you should collect. Cash meters are the new meter minus the old equals the collection. Account for adding change to the coin mech by refilling c/m to a pre-determined level from the cash box as much as possible then filling with coins from a change fund carried by the driver. Any money added to the machine that is not from sales is recorded and later deducted from the collection. You won't deduct cash box coin added to the c/m. Collect your money at the time you inventory the machine and read the meter. This is the only time your cash can balance to the product you count.

The accountablilty formulas:

Single price machine: New meter - old meter x vend price = cash bag less coin added.

Cash meter machine: New meter - old meter = cash bag less coin added.

Driver held changer fund: End of week driver coin + coin reported added to c/ms = coin given to driver at start of week.

Coin bag should not be short.

Variances in meter cash could range from $3 short to $3 over and is rarely 0. An overage or shortage should be offset the next collection if a mistake was made in this collection.

A recurring variance needs to be investigated to see if a selection or selections are priced incorrectly.

If the machine takes $5's, a miscounted bill can be cause of a variance and won't correct itself next collection.

If you have a machine without a meter then that is the machine likely to be stolen from. This will happen by the driver over-reporting the product added to the machine, then stealing money equal to the difference in product added. Or they will just flat-out steal and claim they don't know why the machine appears to be short, knowing that you can't prove otherwise.

Product inventory is just as important as cash because it is supposed to be converted to cash in your machines. Therefore you must require drivers to record the amount of product they add to their truck, put into machines, put back in the warehouse and end the week with still on their truck. You must do inventory reconciliation by warehouse, by truck and by machine if you want to eliminate theft. This is where the myriad of software inventions can be used to track all this data .

Or you can run the route yourself and know that no one is stealing from you, except when your snack is shaken and some product falls out for free.

[Sparta_Automation]

AZVendor.....That was a well written and VERY informative post!

Travis

[AZVendor]

Thank you Sparta, and this is just the tip of the iceberg!

[Poplady1]

Great read on the topic AZVendor...can I copy to send to some of my group?

[AZVendor]

Great read on the topic AZVendor...can I copy to send to some of my group?

Absolutely! Everything here is out in the public domain. Let me know if there are any questions about the details of route accountability. It can be complicated.