//// Need a Good Combo Machine for Home Goods Store //////

[andyinchville]

Hi,

I was contacted the other day my vending management company to see if I could place a combination machine at a recently opened Home Goods store here in Virginia.

I was told that the site would only work with a combination machine… I tried to convince the vending management company to allow me to use 2 separate machines (full sized) , but they said the contract they had with Home Goods called for a combination machine.

As fate would have it, I recently purchased a group of machines from a vendor with passed away, and in his collection of machines there was a 3 wide FSI machine along with it satellite drink machine.

Through discussion with the management company, I was allowed to bring that combination to the site.However, after setting up the 2 small machines. I was later told by the management at the store itself, that I would have to remove the machines and they would only accept a combination machine that consisted of a single box with snacks on the top and drinks on the bottom.

My question to you all is twofold:

1) I have narrowed down my 2 choices for a combination machine to either an Automatic Products LCM4 machine refurbished for $2000 or a Crane 474 refurbished for $1750......., which machine would you choose or is there another machine worth considering? (The space where the combo machine would go is a smallish 42" X 42" behind the employee break room door.

1) Does anybody out there have experience with Home Goods as a store? How is their business volume with that store?........ It's really a shame to be forced by contract has to have a small combination machine when the store itself is huge!...I am thinking that since I will be the exclusive snack and drink vendor at the site that the stop should do well.

Thanks in advance for any and all help.

Andrew

[moondog]

Geez Andrew,

While you have correctly chosen the right combo machines to consider, I'm wondering why you would still be considering this account. Most vendors will not provide a combo only machine for an account and these guys are getting picky?

I currently own two 474s and have no problem with them, nor would I be adverse to an AP Combo, but they're only satellite machines on larger accounts.

Your ROI on this account is going to be about 5 years unless you have to service it every other day. Are you really sure you want to do this?

[AZVendor]

Andrew,

I used to do a lot of business with small retail locations like this when I was hooked up with Best Vendors in the 90's and the sales volume isn't large, but for one combo machine you should do fine. In a sense, you should be glad that you don't have to invest in two machines to keep the account happy. Even though the store is large, they won't have more than maybe 50 employees and the majority of them will be part time. Remember that from October thru December they will hire lots of more employees. Sometimes you have to bite the bullet and do what the account wants as this could lead to more business from them down the road.

Both machines you're considering are good machines, though I prefer the AP LCM4 due to better parts availability and the fact that it's a simpler machine with only one circuit board in it. National had two or three in each machine depending on its options. This leads to more troubleshooting when you have a problem.

As far as the management company goes, do you have much experience yet with them? When I hooked up with Best Vendors after they contracted with a national retailer that I already had 7 locations of, they allowed me to live out my contract with the retailer including setting machines in four new stores for that retailer, and after I proved myself as a good vending operator, they began to give me much more business. That's primarily how I grew my routes in the 90's. It later bit me in the golpher when Best began to feed accounts of mine and other local guys to North County Vending because NCV wanted to grow a presence in Arizona, but I made money while I could. You see, NCV's owner was on the board of Best Vendors and could call the shots. Canteen also had members on the NCV board and a few years ago, Compass Group, the parent of Canteen, bought out Best Vendors and then Canteen later bought out NCV as well. So now Canteen is the only operator for Best Vendors accounts unless in an area that Canteen doesn't service (not many left as Canteen keeps buying up vendors, too).

To sum up more information than you asked for, Vending Management Companies can be both good and bad for vendors. Just remember that you will never own the rights to a managed account, can't change prices or commissions when you want and could lose that business at the drop of a hat. As long as you are prepared for that, use the management company for all the business you can get, and use them to negotiate future price increases for you. It's fun when they call you up and ask if you want a location, expecially when they've already negotiated high prices, and then you find out the account is pretty good sized, too.

[mission vending]

As far as the management company goes, do you have much experience yet with them. When I hooked up with Best Vendors after they contracted with a national retailer that I already had 7 locations of, they allowed me to live out my contract with the retailer including setting machines in any new stores for that retailer, and after I proved myself as a good vending operator, they began to give me much more business. That's primarily how I grew my routes in the 90's. It later bit me in the golpher when Best began to feed accounts of mine and other local guys to North County Vending because NCV wanted to grow a presence in Arizona. You see, NCV's owner was on the board of Best Vendors and could call the shots. Canteen also had members on the NCV board and a few years ago, Compass Group, the parent of Canteen, bought out Best Vendors and then Canteen later bought out NCV as well. So now Canteen is the only operator for Best Vendors accounts unless in an area that Canteen doesn't service (not many left as Canteen keeps buying up vendors, too).

You got "bit in the golpher", I got stung when this happened and a buddy of mine here locally got slaughtered when Canteen took over, he lost 400K of business overnight. It was the beginning of his death spiral and he was out of the business about 2 years later.

[AZVendor]

Yep, what Best Vendors did to their loyal operators was criminal, but I also knew going in that there was no way to avoid something like that. Luckily I had a huge amount of other business that kept me going as I began selling off idle equipment (at least my soda machines were bottler owned). At least I got out before they deployed their new requirement for us to start item level reporting with their preferred software that I don't think they were just going to give us. I didn't really want them spying on me. It was pretty funny how they presented it as a tool to keep their clients apprised of how good a job Best Vendors was doing. I just kept ignoring their requests for implementing it and I never had to do it. Good riddance to them.

[Walta]

Do yourself a favor and do the math.

Count the item that combo holds, add up the revenue if it sold out let’s say it is 200.00 but you will need to restock way before it is empty If you are lucky there is 100 bucks in the cash box before the first selection is sold out. 60 % of the 100 is product cost leaving you 40 bucks. Doesn’t Best get 15% of that 100 now you have 25 left. You bid drive 20 miles there and back 20 X .565 = 11.30 now you are up 8.30. Is you find the combo they want for 2000.00 you will need to service the machine 240 time to pay off the machine at one a week that 20 years before you put a dime in your pocket. But don’t forget to buy your city licenses, pay your liability insurance and pay a few repair bills.

I don’t think you can make the math work for a combo unless it is in the office and you have a bank of machines in the lunch room to carry it.

Walta

[andyinchville]

Hi Guys,

Thanks for all the replies and valuable information....

I have not had a lot of personal experience with management companies…

The 1st time I had a management company to contact me, It was to place a machine in a laundromat . I did so and it turned out to be a pretty decent account. Later that same management company helped me place another machine at another laundromat… Long story short on this particular instance, it turns out the management company was not paying commissions to the store owner and was later was found to have gone out of business… Only because I had my business cards taped on the inside of my machines was the actual business owner able to contact me directly and he wanted me to do a number of his other stores as well !..... I had pretty much lucked out into that one.

My next experience with vending management companies happened here just recently… within the last week or so.

In our city, there is a shopping center that is being remodeled and new tenants are going in... By pure luck ( I guess) I had gotten contacted by a vending management company to supply machines to the new Discount Shoe Warehouse....I accepted the offer ( Since the shopping center is located right across the street from the mall where we service ).

By luck again(?), I was contacted by yet another management company to supply a combo machine to the Home Goods Store , which is located in the same shopping center as the shoe warehouse..

Also, by coincidence, both management companies wanted me to set up their respective stores on the same day!... Since I already had the machines deemed acceptable by the management companies, I couldn't resist taking the 2 locations.

It was unfortunate, however, that I will have to buy a machine for the home goods store since the location did not like my separate combo machine… I really didn't relish the idea of spending upwards of $2000 for a single machine when recently I had purchased 15+ relatively new Wittern snack machines for $3000 (I typically scour craigslist and eBay for vending machine deals… I very seldom if ever pay more than $500-$600 for a full size bill validator equipped vending machine… Drink or snack . So it really does break my heart to spend so much on just one machine, but hopefully the long run it'll be okay).

For what it's worth, the vending machine management companies I am working with are probably a smaller companies (Definitely not a Canteen sized company) -- Universal Vending is one company that I am working with because they found me and I can't even recall the name of the other company… I'll have to look them up in my phone call log.

Of all my current stops, only these 2 stops will be through a vending management company… I am hoping that maybe by doing a good job for them, I get more locations from them.

On the flip side, I do realize the dangers of putting a lot of eggs in one basket… For instance, the one laundromat "chain" that I currently have vending machines in owns 6 stores (actually a lot more but due to distances, I only service 6 of them...They would give me more but I turned them down because of distances...Luckily they were understanding of that)… I would hate to lose this account for whatever reason, because it would mean that I would have to pull 6 machines… That would be a true pain, not to mention the loss of these and income as well so I really understand the dangers of being too tied in with any one business or management company… You just never know what the future holds.

I am leaning towards the AP machine even though it costs a little bit more… The fact that parts availability is greater, and that it only has one circuit board to mess with was probably enough extra information to make spending the little extra okay.

As a side note, there is a vending machine refurbishing company in Maryland that has a Crane 474 combo vending machine that they may be interested in doing trades for… I recently picked up a number of Wittern machine (mostly 2 and 3 wide smaller snack machines with bill validators) and I might actually try to negotiate a trade instead of having to pay cash for the combo machine… Does anybody have a guess as to the value of a smaller Wittern machine and how many I should offer in trade for the combo machine?..... if I can strike a deal that way I would take the Crane 474 just because it would be no extra money out of my pocket other than fuel and time to get to Maryland.

In terms of payback time and return on investment, the prices the management companies want me to charge for products are somewhat above what I would normally charge, otherwise…

Interestingly, even though Universal wants 12.5% commission and the other company wants 10% on the snacks only (drink machine is 0% commission), I'll still be making more on the products that if I would've price them my "normal" way.

As far as service time, driving is nominal since both stops are in the same shopping center and I'm hoping that because I have 2 stops in the same shopping center as exclusives (I. E. No other Coke or Pepsi machines in the building), that the sales should be okay drink wise.

Thanks again for all your input and help.

Andrew

PS- How does one edit posts after entering them?... I noticed I had a few typos in my original post and want to correct them..... This Dragon naturally speaking works pretty well, but is not 100% perfect.

[AZVendor]

Andy,

I'm glad you understand the relationship with management companies and have some experience with them. You also have a good understanding of how losing one chain of related stops can affect your business. To determine what kind of trade you might be able to make for the Nat.474, see if they are advertising any of the USI machines you have and for what price to determine how they value those models. I doubt they will give you much for a 2 wide and maybe not much for a 3 wide snack, but if you don't really use the 2 wides toss 4 or 5 to them in trade. The difficult thing is that snacks narrower than 4 wide can be hard to sell.

You have one hour to edit your posts after they are posted. At the bottom of your post, greyed out until your mouse is over it, is an Edit button next to MultiQuote. Just click it and you can begin editing.

[moondog]

Well Andrew,

The combo machine in this case would actually be more of a satellite machine as your servicing that general location anyway. I only place a combo machine when I have to which seems to be your situation.

I think your plan to swap some machines for that 474 is a good idea even though I'd probably opt for the AP LCM, if I had to buy one, as it's a much newer machine and I prefer AP to National.

The Wittern 3 wides are interesting in that you can never find one when you need it and, at least around here, they go for about half again as much as the 4 and 5 wides.