Beverage and Food Vending Mistakes?

[HeyHavok]

I know getting into this business is all about learning. With a pool this deep of people who know what they're doing, it would be great for the newer members such as myself to pick the brains from veteran members who Know what they're doing.

I would love to hear from the veteran members about their 'learning experiences' or mistakes.

Anything from locating, comissions, buying machines, repairs, servicing, etc etc etc

[CajunCandy]

What I learned is:

 

1- start off small and grow when you can and with what you can afford to spend, do not fiance older machines, that you can't give away.

2- stay away from combo machines, snack and cold drink machine only.

3- you are your best locator, get out there and present yourself and your business and be honest.

4- this is hard work, it takes long hours and many days to get where you would like to be in this business!

5- listen to the older vendors on this forum and don't be afraid to ask questions,even if you think it is dumb, use the search button and read.

 

i'm sure other people will give there input, but this is what i learned so far.

 

mike

[AngryChris]

1- Buying used equipment that you don't know how to operate/repair.

2- Buying from a distributor that doesn't know how to work on the machine.

3- Not knowing how much repairs cost when buying used equipment (equipment that is sold as-is and could be a money pit)

4- Giving the customer EXACTLY what they want (ie. food, coffee, snack, pop machine to a location with 15 employees).  This is a MISTAKE.

5- Not repairing equipment in a timely manner.

6- Not watching expiration dates.

[HeyHavok]

@AngryChris

Question:

Why do you want to avoid giving a location exactly what they want?

[AngryChris]

@AngryChris

Question:

Why do you want to avoid giving a location exactly what they want?

 

Because sometimes what they want is not profitable.  An office with 30 lawyers might demand brand new soda, snack, food, and coffee machines for their break room.  Their office is a very high-end place and they all make lots of money so they want YOU to provide the best equipment to go along with what they are used to.  New snack, soda, coffee, and food machines could easily run you close to $20,000.  Assuming none of your product ever spoiled, they might spend $50/week into your machines which might generate $25 in profit (if you're lucky) every week, or about $1,300 in profit each year.  Assuming no wasted product and no repairs, it would take you 15 years to break even.  If they want vending service, they are going to have to settle for a used soda machine, used snack machine, and some OCS.

 

Does that explain why it can be a mistake to give the customer EXACTLY what they want?

[rmorris1953]

What I learned is:

 

1- start off small and grow when you can and with what you can afford to spend, do not fiance older machines, that you can't give away.

2- stay away from combo machines, snack and cold drink machine only.

3- you are your best locator, get out there and present yourself and your business and be honest.

4- this is hard work, it takes long hours and many days to get where you would like to be in this business!

5- listen to the older vendors on this forum and don't be afraid to ask questions,even if you think it is dumb, use the search button and read.

 

i'm sure other people will give there input, but this is what i learned so far.

 

mike

Could not have said it better........

 

There is a reason someone is selling their locations......... Most likely it is because it is crap......  I don't know anyone selling locations unless they are getting out who sells their best locations. In many cases you will get 1 or maybe 2 that are keepers when bundled together. I have seen people buy 10 stops and get 1 good one. 

 

Find someone who can provide you with good equipment at low cost. Stay away from bottlers and buy your own pop machines. Bottlers want quotas per machine. That means you have to buy from them. Some areas in the country won't let you cross brand products and some will allow maybe up to 3. It isn't worth the hassle.

 

When finding locations you have a chance to meet the people you are going to provide a service for. You also have an opportunity to keep your route close together so you are not driving all over the place to keep the overhead down. Keeping overhead down allows you to sell at a lower cost than the competition.  

 

Do not offer commissions. Go in and shoot your lowest cost you can do it for without commissions. If asked about commissions say. Commissions increase the prices by the amount of commision. 10% increases the prices by %10 percent.  That way you don't back yourself into a corner. 

 

Just remember you are the best sales person... Every time you go to an account. 

[HeyHavok]

@AngryChris

Noted! Thank you for your example.

Thanks for the awesome advice guys.

If anyone could offer any more advice that would be great.

Also question for you guys, is there anything online or on these forums to learn about the mechanical/electrical aspect of soda/snack machines?

[Golfdogs]

Stay away from fresh food. It is break even, at best.

[AngryChris]

I have heard about a book from RJT?  I have never seen it.  I worked for a vending company before I started my own, so I gained valuable experience regarding vending machines before hand.  I also had an interest in learning how to fix them because I was a very business-minded person anyway, so I would have the repair guys show me how to do things like install a coin mech (SUPER EASY) or a validator so that I could SAVE MONEY by REPAIRING the machine during a regular delivery!  Because I was such a good employee, the owners often explained the business to me as well.  However, these are all things that I learned as I went.  It's way too hard for someone to write a paragraph giving you tips that apply to every piece of equipment.

 

You need refrigeration knowledge, basic electrical knowledge, some electronics knowledge, some common sense, and lots of random luck.  Ninety percent of your problems are going to be stupid things that take 30 minutes to figure out and 5 seconds to fix, but that experience is what will make the next repair take you 5 minutes instead of 30 minutes.

 

Machine manuals are very helpful though.

[CajunCandy]

HeyHavok

 

I turned down a two hundred plus people account for the simple reason they wanted brand new machines, and I did not want to put that kind of money out there. They wanted a new cold drink, ice cream, chip, and sandwich machine for there new building they was moving into. Sounds good, less than two weeks after the move, one big lay off and guess who would be stuck paying for machines.

 

True story!

 

I'm glad I did not have the money for that account!

 

mike

[HeyHavok]

Does anyone know where to pick that RJT book?

I suppose those things are blessings in disguise.

Thanks for your input guys, this is all awesome and I would love to keep hearing more experiences from all of you.

[moondog]

@AngryChris

Noted! Thank you for your example.

Thanks for the awesome advice guys.

If anyone could offer any more advice that would be great.

Also question for you guys, is there anything online or on these forums to learn about the mechanical/electrical aspect of soda/snack machines?

To expand a little on what others have posted here,  doing your own locating is the best way to grow but with one caveat.  When I first started out, going on four years ago now,  I was like a kid in a candy shop when it came to locating.  Everybody wanted vending services and I placed thirty machines in my first six months.  After awhile, the downside of this practice really started to bite me in the butt.  Had I continued at this rate I would end up working 160 hours a month and clearing $3,000 (not where you want to be).  Finding locations is never a problem - FINDING GOOD ONES separates the winners from the losers.

[jerry1973]

Along with what others have said, I would say to stay away from all equipment except quality american made proven brands. Don't buy foreign made machines that will break down regularly and hard to find part for. Also be careful about machines that are too old, they sometimes are not upgradeable and not worth any investment. Research machine models on this forum, and ASK FOR ADVISE before you thrown down your hard earned money on a machine that you are not 100% familiar with. I took recommendations from this forum and have been buying mostly AP snack machines, and mostly Dixie Narco soda machines and have had great luck so far. They are dependable and parts are available if you need something. 

[Uv77mc]

I'm only a year in, but what you've read so far is good advice. Here's my contribution.

 

1.Stay away from energy drinks/shots. The profit margins are way too low, and when I put Monster drinks in one of my locations, all I did was effectively shoot myself in the foot because the Mt Dew sales were cut in half.

2. Treat you locations right, but don't give them everything they ask for. It's difficult, but you have to stick to items that will be generally popular.

3. Try new things. For better or for worse, shake things up a bit. Not a lot, but a bit. Sometimes I buy something new and put it in rotation. The last one was Cherry Nibs licorice and people are loving it. Just remember to try things you like, because you may end up eating a lot of it. Surprisingly enough, I had to eat WAY too many chewy granola bars when I tried those because they didn't sell.

4. Invest in your business and take care of your equipment. I've upgraded all of my bill validators with new belts and sent them in to be upgraded to the new $5. Every 3 months, I check and vacuum my cooling decks.

5. Keep spare parts on hand. I have 2 spare Coin Mechs and 2 spare bill validators, and I rotate them into locations so I can thoroughly clean the ones I took out. I even have spare circuit breakers.

[mission vending]

All the previous advice given is sound. I would like to add to one that has only been lightly touched. DEBT. I won't say don't do it but be very careful if you do, things never quite work out as planned or expected and you can put yourself in a world of hurt in a hurry if you leverage yourself up to your golpher. Coming from someone that has been there done that, it took my 5 years of working for free to dig out of the hole I put myself into.

[Feral Vending Mechanic]

Try as hard as you can to ensure your machines look as good as possible. Remember a customer's first impression of you is your machines. NO HANDS WRITTEN LABLES! Microsoft Paint comes with every copy of Windows. Learn how to us it to make labels.

[rmorris1953]

Try as hard as you can to ensure your machines look as good as possible. Remember a customer's first impression of you is your machines. NO HANDS WRITTEN LABLES! Microsoft Paint comes with every copy of Windows. Learn how to us it to make labels.

 

Something to keep in mind. When someone is walking up to your machine the very first thing they are thinking is AM I GOING TO GET RIPPED OFF. Then they look at the machine and if it looks like a piece of crap they will walk away. Empty rows, dirty glass, sticky notes are a dead give away. Product placement is also important.

You should put your highest profit margin products at eye level. You want them to see the products you make the most money on first. Try new things when possible. For myself if I have been to a machine several times I already know what is in it. So I may not go. If you are changing things at times then they might go more often, 

 

The big guys they use planograms for every machine. Most of there machines are all setup the same way and the drivers are not allowed to stray away from it. If a customer asks for something else they are told it isn't carried.

That works to the small guys advantage because he can and does give the customer what he wants.

 

The big guys profit is from rebates. So they push the ones that give them the most rebates. 

Do not double up on columns. Like put a chili fritos and then a plain frito then another chili frito. Nothing more aggravating then see that chili frito in the front all the time just waiting for the plain one.

 

You will almost never loose a location from good service. But you will loose all your locations from bad service.......  

[moondog]

I'm only a year in, but what you've read so far is good advice. Here's my contribution.

 

1.Stay away from energy drinks/shots. The profit margins are way too low, and when I put Monster drinks in one of my locations, all I did was effectively shoot myself in the foot because the Mt Dew sales were cut in half.

2. Treat you locations right, but don't give them everything they ask for. It's difficult, but you have to stick to items that will be generally popular.

3. Try new things. For better or for worse, shake things up a bit. Not a lot, but a bit. Sometimes I buy something new and put it in rotation. The last one was Cherry Nibs licorice and people are loving it. Just remember to try things you like, because you may end up eating a lot of it. Surprisingly enough, I had to eat WAY too many chewy granola bars when I tried those because they didn't sell.

4. Invest in your business and take care of your equipment. I've upgraded all of my bill validators with new belts and sent them in to be upgraded to the new $5. Every 3 months, I check and vacuum my cooling decks.

5. Keep spare parts on hand. I have 2 spare Coin Mechs and 2 spare bill validators, and I rotate them into locations so I can thoroughly clean the ones I took out. I even have spare circuit breakers.

Can you believe how bad those granola bars are?  Made the same mistake myself and the dog wouldn't even eat them 

[mission vending]

Something to keep in mind. When someone is walking up to your machine the very first thing they are thinking is AM I GOING TO GET RIPPED OFF. Then they look at the machine and if it looks like a piece of crap they will walk away. Empty rows, dirty glass, sticky notes are a dead give away. Product placement is also important.

You should put your highest profit margin products at eye level. You want them to see the products you make the most money on first. Try new things when possible. For myself if I have been to a machine several times I already know what is in it. So I may not go. If you are changing things at times then they might go more often, 

 

The big guys they use planograms for every machine. Most of there machines are all setup the same way and the drivers are not allowed to stray away from it. If a customer asks for something else they are told it isn't carried.

That works to the small guys advantage because he can and does give the customer what he wants.

 

The big guys profit is from rebates. So they push the ones that give them the most rebates. 

Do not double up on columns. Like put a chili fritos and then a plain frito then another chili frito. Nothing more aggravating then see that chili frito in the front all the time just waiting for the plain one.

 

You will almost never loose a location from good service. But you will loose all your locations from bad service.......  

 

Three basic rules, keep the machines full, keep them clean and keep them working

[AngryChris]

All the previous advice given is sound. I would like to add to one that has only been lightly touched. DEBT. I won't say don't do it but be very careful if you do, things never quite work out as planned or expected and you can put yourself in a world of hurt in a hurry if you leverage yourself up to your golpher. Coming from someone that has been there done that, it took my 5 years of working for free to dig out of the hole I put myself into.

 

Excellent advice.  I think it is good advice for people to start out small and try to do everything with cash only.  It makes it IMPOSSIBLE to spend more than you bring in, but it also limits your ability to expand quickly.  I chose to finance my own equipment but I have always had full confidence in my ability to manage finances.  I have the same amount of debt [today] that I did 2 years ago, but my revenue has nearly tripled since then.  I tell myself each year that I am going to pay off my debt but I keep getting new customers!!

[HeyHavok]

Thanks a ton guys seriously, this is going to help me tremendously when I start my business. And I'm sure lurkers will benefit as well.

I promise I'll avoid chewy bars like the plague.

Again, any input is appreciated and gives all of us a way to share experiences anyway.

[Uv77mc]

All the previous advice given is sound. I would like to add to one that has only been lightly touched. DEBT. I won't say don't do it but be very careful if you do, things never quite work out as planned or expected and you can put yourself in a world of hurt in a hurry if you leverage yourself up to your golpher. Coming from someone that has been there done that, it took my 5 years of working for free to dig out of the hole I put myself into.

 

This post is very important. Do the math for sure. I had the cash to buy my route, but financed it at 0% for a year so I wouldn't be cash poor. Valuation is also part of this equation. I'm sure we've all seen some CRAZY asking prices for routes/equipment. Personally, I bought my route for one year's net proceeds and I just paid it off 11 months in. I've seen locations listed for 3-5 years worth of net proceeds and I think they're crazy.

[QualitySelectionsJ]

Not sure if Pricing was mentioned.  In vending you want to turn a Profit on what you sell, so make sure you price your products accordingly.  Keep up with inflation.  " Don't rip people off, but definitely don't give the products away even if the manager wants good pricing".

[bcron]

Thought this would be a good place to share this story...the moral being, be prepared to be surprised.  I have moved into locations with the expectation that going by all of the vending rules...blue collar, several employees, etc, that the location would be a good one and they turned out to be a bust.

 

On with the story.  A while back I had the owner of my best location at the time (an auto repair/customizing shop) approach me and say that he had purchased a second location just down the road and wanted to know if I would put machines in there also.  It was an extension of his current business doing the same type of business.  I asked him how many people he had working there, he said....wait for it......2.

 

Yeah, I had the same reaction.  But he added that there were 2-3 other similar small shops in this strip that there was no service for and he thought they would all come over and use the machines.  I was very hesitant but agreed and put in a snack and soda.  To be honest, I was still pretty new to the game and really didn't want to take the chance on losing my best customer to someone else who might accomodate his request.  To my surprise, that location alone has turned out to be one of my top performers to this day.  Unbelievable.

[AngryChris]

Thought this would be a good place to share this story...the moral being, be prepared to be surprised.  I have moved into locations with the expectation that going by all of the vending rules...blue collar, several employees, etc, that the location would be a good one and they turned out to be a bust.

 

On with the story.  A while back I had the owner of my best location at the time (an auto repair/customizing shop) approach me and say that he had purchased a second location just down the road and wanted to know if I would put machines in there also.  It was an extension of his current business doing the same type of business.  I asked him how many people he had working there, he said....wait for it......2.

 

Yeah, I had the same reaction.  But he added that there were 2-3 other similar small shops in this strip that there was no service for and he thought they would all come over and use the machines.  I was very hesitant but agreed and put in a snack and soda.  To be honest, I was still pretty new to the game and really didn't want to take the chance on losing my best customer to someone else who might accomodate his request.  To my surprise, that location alone has turned out to be one of my top performers to this day.  Unbelievable.

I have a location with 10 employees that averages $45/week.  This comes primarily from about 5 people!