spdydre Posted March 27, 2013 Share Posted March 27, 2013 What is the rule of thumb you guys use for delivery only pricing? I havent had any experience in this and landed a university account to just deliver sodas and snacks but the rejected my pricing saying it was too high. Then I saw the previous competitor vendors pricing at .44 a can etc so I lowered my pricing to around these rates to make them happy. I set my profits to be around .13-.15c per item. Is this too low or about right? Even having it set at this pricing I should still see a good return profit for how much they order. What percentage should I set my prices at? Link to comment Share on other sites More sharing options...
TKK Posted March 27, 2013 Share Posted March 27, 2013 You mean they are paying you to just take them sodas? There's a guy I know locally the dealership pays him $50 a week flat to deliver them with cokes and chips from sams he has a soda machine there that does decent but if it wasn't for that $200 a month he wouldn't Link to comment Share on other sites More sharing options...
Gamvend Posted March 28, 2013 Share Posted March 28, 2013 How did you land an account that rejected your pricing? Do they order a lot at once? Do they own their own machines? Can you verify volumes? It's tough, it really comes down to how much you are getting for your time and effort and how you value that. I know one thing that would be a concern to me is how fast they pay. It would make me nervous to have $1000 in cogs out there that I was only making $100 on. I But, if it were a situation where you can deliver 1000 or more units at a time by the case and it didn't take too much more than a couple hours or so, it could be worth it. Link to comment Share on other sites More sharing options...
snack dude Posted March 28, 2013 Share Posted March 28, 2013 I have several accounts where I do this for corporate and employee meetings and such. And I give them a good price break because I already have the vending and I got to go there anyway and I do not have to load the machines and wait for them to sell. Plus it is great PR. I will also bring in barrels when requested to do so on the day of a meeting and ice down the drinks and provide snacks. Again great PR. I actually got an account because a guy from another company came to one of my customers meetings where I provided drinks and snacks Link to comment Share on other sites More sharing options...
AZVendor Posted March 28, 2013 Share Posted March 28, 2013 Spdydre, Congratulations on the university account. This is a great way to make money without having to invest in equipment. It sounds like you already have won the account with your adjustment in soda prices, so can you make some of the lower profit back on the snacks you sell them? If this is a fixed-price contract you are locked in on prices for items specified in the contract, but you should be able to put a higher markup on items that are outside the scope of the contract. If you are going to concentrate on this type of distribution method, then you will probably have to give in until you get enough business where you can then pass on non-profitable accounts. This is when you can begin to dictate the terms yourself (kind of if you want our exemplary service, this is what it costs). For now you should do a P & L for each delivery account to determine your bottom line after all expenses such as a proportionate share of time, gas, insurance, cost of goods sold, sales tax, income tax, etc. This will tell you how much profit you are currently making in dollars and by percent of sales. Once you know these numbers you can determine if it's worth doing at the current prices or if you need to adjust your pricing in later in this contract and in future account acquisitions. You could set a minimum order amount, apply a delivery charge expecially for smaller orders or emergency orders, give price breaks when the account meets a certain purchase threshold in a given time frame, etc. Good luck with this venture. Link to comment Share on other sites More sharing options...
spdydre Posted March 28, 2013 Author Share Posted March 28, 2013 I sponsored one of their school events by giving them ten cases of can soda for free and they gave me the offer to take over because they are not happy with the current vendor but wanted to look at my pricing. I had everything set at almost vend rate myabe ten cents less and they said it was too high so I resent them a counter offer. No right now from what I see Canteen machines are on the main campus. They say they pay the same day as delivery or send a check within 30 days. They do order alot at once maybe 100+ cases a month. They sent me a list of snacks and sodas they order every month. How did you land an account that rejected your pricing? Do they order a lot at once? Do they own their own machines? Can you verify volumes? It's tough, it really comes down to how much you are getting for your time and effort and how you value that. I know one thing that would be a concern to me is how fast they pay. It would make me nervous to have $1000 in cogs out there that I was only making $100 on. I But, if it were a situation where you can deliver 1000 or more units at a time by the case and it didn't take too much more than a couple hours or so, it could be worth it. Link to comment Share on other sites More sharing options...
Gamvend Posted March 28, 2013 Share Posted March 28, 2013 So that's pretty cool. So even if it takes you a full day to load their stuff, deliver and reload with your regular inventory, once a month and you make 10-15 cents a unit that's a pretty nice days work. Link to comment Share on other sites More sharing options...
mission vending Posted March 30, 2013 Share Posted March 30, 2013 Just set your pricing to cover your time to buy, load, drive and unload as well as mileage for the vehicle. Link to comment Share on other sites More sharing options...
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