Potential New Locations... Good Deal?

[ayden55]

Hello all!

 

I have been vending full-line for a  little while now, and I feel like I have the hang of things. I currently have an older (Early 1990's) soda machine (VENDO), and a Seaga CA-9 snack machine, on location at a small car-detailing/cleaning busijness. They have 4-7 workers, depending on the day. However, I am looking to expand. The same guy who sold me my current machines is looking to down-size a little bit.

 

Anyway, he is offering me 5 machines, which I will explain, between 2 locations. From what I understand, There are roughly 60-65 employees per location.

The machines are 2 energy-drink machines/soda machines (Sorry, I don't know the model),1  Soda machine without energy drinks, and 2 Rowe snack machines. He hasn't decided an exact price, as he isn't looking to sell for another 5-7 months. But, he did mention around $1,000 per machine (location included.)

 

He claims the energy-drink/soda machines fetch about 200.00 in profit per month.

 

If anyone on here has any further questions, please let me know.

 

Locations are free (No Comission)

 

Thanks and sorry if this was a Boring post,

 

 Ayden

 

[AZVendor]

Not a boring post at all, we're here to help. This seller didn't do you any favors with selling you a Seaga machine, or any location with only 7 employees, so don't expect any good deals down the road. What he may try to sell to you in a few months isn't going to be much better except for the 60 employees per location. Remember though that 60 employees doesn't guarantee anything if they all work offsite. Each location must be evaluated on its own merits. Don't believe everything he tells you - the "energy drink" machine profitting 200 per month is questionable unless that's the total for both machines. If those two machines are Red Bull machines they won't do well, but if they instead are multiprice 8 select soda machines, that would be much better. The Rowe snacks are 20+ years old and Rowe is no longer in business. That doesn't mean the Rowes aren't useable but they may need to have the validators upgraded if he's still using Rowe CBA validators in them.

His price of $1000 is definitely too high for the Rowe snacks alone, but if you get more info on the sales by machine, by location and details about the accounts and the machine models, we will be better able to advise you. Why isn't he selling now? Is he wanting to reap sales from the best part of the year then sell it to you in the part of the year that the sales drop off? Food for thought.

[moondog]

Not a boring post at all, we're here to help. This seller didn't do you any favors with selling you a Seaga machine, or any location with only 7 employees, so don't expect any good deals down the road. What he may try to sell to you in a few months isn't going to be much better except for the 60 employees per location. Remember though that 60 employees doesn't guarantee anything if they all work offsite. Each location must be evaluated on its own merits. Don't believe everything he tells you - the "energy drink" machine profitting 200 per month is questionable unless that's the total for both machines. If those two machines are Red Bull machines they won't do well, but if they instead are multiprice 8 select soda machines, that would be much better. The Rowe snacks are 20+ years old and Rowe is no longer in business. That doesn't mean the Rowes aren't useable but they may need to have the validators upgraded if he's still using Rowe CBA validators in them.

His price of $1000 is definitely too high for the Rowe snacks alone, but if you get more info on the sales by machine, by location and details about the accounts and the machine models, we will be better able to advise you. Why isn't he selling now? Is he wanting to reap sales from the best part of the year then sell it to you in the part of the year that the sales drop off? Food for thought.

I concur.  A Redbull machine doing $200 a month with only 7 people sounds very fishy - if they are Redbull machines, they're well built but will only vend Redbull (how convenient).  Rowe made great snack machines back in the day but they're dinosaurs now.

 

The 60 people per location is usually a good sign but it just depends on the people - I've got an auto body shop with 25 people that just blows away a building full of 200 secretaries I used to have.

 

I'm not giving this one a pass just yet but it may have some significant problems - don't get too excited.

 

Ps. The fact that he's downsizing "a little bit" probably means that he's dumping his dregs

[AngryChris]

I concur.  A Redbull machine doing $200 a month with only 7 people sounds very fishy - if they are Redbull machines, they're well built but will only vend Redbull (how convenient).  Rowe made great snack machines back in the day but they're dinosaurs now.

 

The 60 people per location is usually a good sign but it just depends on the people - I've got an auto body shop with 25 people that just blows away a building full of 200 secretaries I used to have.

 

I'm not giving this one a pass just yet but it may have some significant problems - don't get too excited.

 

Ps. The fact that he's downsizing "a little bit" probably means that he's dumping his dregs

 

I don't think he said the location with 7 people profits $200/month from the energy drink machine, I think he said that the same guy sold him an account with 7 employees but there are some 60+ employee locations that do $200/month in profit from the soda machines in general.

 

That aside, here is my 5 cents (no pennies, please):

 

First of all, a SOLID location with 60 employees (meaning there are 60 employees on-site in a location that is half office/half labor) can easily fetch an average of $100/week in sales from snack/soda machines.  With that said, assuming that your profit is roughly 35% of your gross, you should be able to collect $140 in PROFIT every 4 weeks from the ENTIRE account.  If both of these locations can pull those numbers, you can net $280 every 4 weeks from both accounts.  Since the soda machines are probably responsible for 2/3 of that profit, you can expect close to $200/month in profit from the soda machines (all of them) and about $80 from the snacks (both of them).

 

All I am saying is that the numbers sound possible.  Here is another thing:  If the location can definitely profit over $250/month, you can expect to collect $3,000 in a year.  If these numbers are somewhat accurate and his information is true, then this could be a decent investment from a pure numbers point of view.

 

Here is the problem:  As moondog mentioned, if any of the vending machines are Redbull machines (usually with only 3 selections), those machines aren't worth more than a few hundred dollars.  Why?  Because they are ONLY set up to vend redbull and you will ABSOLUTELY NOT profit $200/month from REDBULL ALONE.  You will also never find a location to install it if you need to.  Also, those Rowe snack machines are dinosaurs as others have mentioned.  Not only can parts be difficult to find, it can be hard to find people who have fresh knowledge on how to repair them since many vendors don't have any more of those in their business.  You NEED to find out the model numbers of all of these machines.  We need to know what he's trying to sell you.  You also need to know if they have upgraded bill acceptors or if they used old metal validators.  Pretty much any validator that is PLASTIC will be modern and that's a really good sign.  Anything METAL is bad.

 

Here is another issue that bothers me.  If I were trying to buy an entire account and the owner only gave me the estimated profit from the soda machines alone (and when I say soda machines, I mean machines that vend any kind of beverage), I would be skeptical of everything else.  I would expect him to not only know accurate numbers, but I would expect him/her to give me the GROSS figures for BOTH ACCOUNTS individually.  The gross numbers are important because you can look at his prices and roughly determine his profit based off of the cost of the products.  A lot of vendors have had old equipment at locations for a long time and haven't increased prices in MANY years.  It's possible that he only sees 20 cents out of every dollar but doesn't really pay attention and would rather just sell the location for a decent price (for him) and let someone else deal with a customer who has insanely cheap products.

 

Find out the prices, find out the model numbers of the equipment, find out exactly what type of products he is selling, find out if the locations really do have 60-65 employees on each location, and find out if the equipment is in good shape (upgraded bill acceptors, everything works, etc..).

 

Once you can give us these numbers, we can tell you whether this is worth it or not.  $5,000 is not a bad deal for two locations that COULD net $250/month in profit (combined), as you would break even in about 18 months, but it's very possible that you could end up with someone else's junk in a location that isn't going to make you any money.