Typical Commission Rate For An Apartment Complex

[Randy 805]

What is the typical commssion rate for an apartment complex?

[AZVendor]

There is no such thing as a typical commission rate.  It will be either what you are comfortable paying or what the location demands and you agree to.  Your product pricing should be a primary bargaining tool when discussing commission.  Determine what you need from every unit sold to make a good profit, then if a commission is required, the price goes up.

 

Sometimes a particular market is very competitive for apartment complexes and commissions are unfortunately the main selling tool.  You might find yourself bidding against someone who claims they are paying the moon, or speaking with a complex that believes there's so much money to be made in vending that they can get a large chunk of the cash for themselves.  Commissions are also the most abused part of any vending agreement if meter readings and account viewing of the meters isn't performed.

 

Why don't you tell us what price you will be selling at, what your cogs are, if it's can or bottle and what commissions rates you're considering so we can guide you in this.

[spdydre]

none! the rob you at apartments! well at least here they have the biggest breakins, vendors want to get rid of them all the time

[Randy 805]

There is no such thing as a typical commission rate.  It will be either what you are comfortable paying or what the location demands and you agree to.  Your product pricing should be a primary bargaining tool when discussing commission.  Determine what you need from every unit sold to make a good profit, then if a commission is required, the price goes up.

 

Sometimes a particular market is very competitive for apartment complexes and commissions are unfortunately the main selling tool.  You might find yourself bidding against someone who claims they are paying the moon, or speaking with a complex that believes there's so much money to be made in vending that they can get a large chunk of the cash for themselves.  Commissions are also the most abused part of any vending agreement if meter readings and account viewing of the meters isn't performed.

 

Why don't you tell us what price you will be selling at, what your cogs are, if it's can or bottle and what commissions rates you're considering so we can guide you in this.

Thanks for the input.  My wife really does all the purchasing so she knows more about what we pay for things but I think cans are usually around 32-35 cents each so we sell them for 75-85 cents each, we only do 1.5 oz. bags of chips and higher so those typically go for 90 cents to $1, candy is usually between 90 cents and $1 as well, the ocassional pastries and cakes also go for $1.  As a general rule we try to set the sell price for double what we pay per unit unless the location specifically requests that we set them lower which is not typical but does ocassionally happen.  In the initial meeting today with the Property Manager I mentioned that commsions when given are typically 5-7% of sales, because that's what I had heard previously from another vendor, they were pretty unsatisfied with their previous provider and he had some really out dated machines and poor service from what she was saying.

 

I should mention that I didn't bring up the commission provision, she mentioned as one of their complaints from the previous vendor that they weren't receiving any income, in response I mentioned that though it's not the norm, I do offer commssions on higher volume locations, and when offered are usually around 5-7%.

[AZVendor]

In an apartment complex where you will have vandalism, charge higher prices than you normally charge.  This is a convenience and they should be prepared to pay for it.  You also need to pad the prices to pay for the aforesaid vandalism.  I would consider cans at $1, and even consider everything in the snack machine at $1 or better yet, $1.25 for simplicities sake.  These prices are very common in our area.  If you have broached the subject of commissions and they are truly most interested in better machines and better service, then you can get away with the 5-7% you mentioned.  I would try to stick to 5% on soda only and not give any on the snacks.  There are more stales and easier vandalism on snack machines.  Pay honest commissions and see how you compare to the previous vendor.  You and the manager might be surprised how much more they get from an honest vendor.  Use the stance too, of higher prices equal more commission for them.

 

Plan on putting hockey puck locks on all of your machines and consider expanded metal over the glass on the snacks.  You could even put the machines in cages to protect them.  This is very common in apartment complexes.  Don't buy anything new for these accounts as they will get beat up.

[Randy 805]

In an apartment complex where you will have vandalism, charge higher prices than you normally charge.  This is a convenience and they should be prepared to pay for it.  You also need to pad the prices to pay for the aforesaid vandalism.  I would consider cans at $1, and even consider everything in the snack machine at $1 or better yet, $1.25 for simplicities sake.  These prices are very common in our area.  If you have broached the subject of commissions and they are truly most interested in better machines and better service, then you can get away with the 5-7% you mentioned.  I would try to stick to 5% on soda only and not give any on the snacks.  There are more stales and easier vandalism on snack machines.  Pay honest commissions and see how you compare to the previous vendor.  You and the manager might be surprised how much more they get from an honest vendor.  Use the stance too, of higher prices equal more commission for them.

 

Plan on putting hockey puck locks on all of your machines and consider expanded metal over the glass on the snacks.  You could even put the machines in cages to protect them.  This is very common in apartment complexes.  Don't buy anything new for these accounts as they will get beat up.

 

The drink machine will be going outside int he pool area, and be partially covered by a roof overhang though not completetly, this brings up another issue, I've not had any machines outside yet and I'm not sure how they'll take to the weather...it's a Vendo 480...suggestions?  The current machine they have their has been there for a number of years and has no visible damage / obvious break-in marks than I can see, it's just old & weathered.

 

The snack machine will be going inside the laundry room.  By expanded metal, do you mean some kind of mesh grating over the glass?

[AZVendor]

The Vendo 480 is outdoor rated and it's even better that it will be under a cover to keep most rain off of it.  Every little bit helps.  Regardless of whether the last machine was vandalized, you need to protect your own assets.  You never know when the hit will happen.  Expanded metal is the mesh grating.  You would weld a frame that fits just outside of the glass edge so you can run carriage bolts through the door to secure the frame and the mesh is welded to the back of the frame.  It looks ugly and puts holes in the front of your door, but it deters some vandals.  This also prevents most smash and grabs, but you could always get the glass broken and then have the perps fish your products out to fall into the delivery bin.  If they want into your machines they will find a way or damage the machines while trying.  Basically don't put machines there that you are very fond of, as you might have to junk them and replace them down the road.  It's just the reality of the business.  You might get lucky and never have a problem, but I wouldn't bet on it.  When I was a vendor, I dabbled in apartments until I started getting hit.  I finally pulled all my apartments and gave them to a friend who specialized in apartments by building asthetically pleasing enclosures for the machines - and getting 5 year contracts to pay for the construction.  But he also only does apartments that have 150 units or more, of which we have hundreds around here.

[Randy 805]

The Vendo 480 is outdoor rated and it's even better that it will be under a cover to keep most rain off of it.  Every little bit helps.  Regardless of whether the last machine was vandalized, you need to protect your own assets.  You never know when the hit will happen.  Expanded metal is the mesh grating.  You would weld a frame that fits just outside of the glass edge so you can run carriage bolts through the door to secure the frame and the mesh is welded to the back of the frame.  It looks ugly and puts holes in the front of your door, but it deters some vandals.  This also prevents most smash and grabs, but you could always get the glass broken and then have the perps fish your products out to fall into the delivery bin.  If they want into your machines they will find a way or damage the machines while trying.  Basically don't put machines there that you are very fond of, as you might have to junk them and replace them down the road.  It's just the reality of the business.  You might get lucky and never have a problem, but I wouldn't bet on it.  When I was a vendor, I dabbled in apartments until I started getting hit.  I finally pulled all my apartments and gave them to a friend who specialized in apartments by building asthetically pleasing enclosures for the machines - and getting 5 year contracts to pay for the construction.  But he also only does apartments that have 150 units or more, of which we have hundreds around here.

 

 

Interesting...ya, i kind of felt bad being that most of my machines are old Snacktron's & Vendo's, but now not so much...So, what qualifies a machine as "Outdoor Rated" as you say?  Are the smaller Pepsi

Dixie Narco 276E's Outdoor Rated?

[AZVendor]

All of the stack machines from DN, Royal and Vendo are outdoor rated.  There may be a model here and there that isn't, but you're unlikely to come across any.

[orsd]

Just look on the tag where the model number is