Forging Ahead What To Do?

[Maddog3632]

Ok, so I have established 3 accounts and need some advice.

 

The accounts are below with the numbers but I am not entirely sure how to proceed moving forward and would like some advice.  I currently have 6 good DN 501/600E machines in my shop along with a crane 168 4 wide.  I am not sure if I want to proceed with expansion because I work a full time job but I see potential in the equipment that I have sitting in my shop.  

 

Does anyone have suggestions on how small of accounts would be "to small" for the remaining soda machines? Any thoughts?

 

I currently have an opportunity to put a machine in a metal fab shop with 22 people and a Pepsi owned machine directly next door currently selling for 1 dollar but am hesitant to put a new machine in because it is tough to compete with 20 oz drinks for 1 buck.  However I see opportunity as I can provide Rockstar, Coke, and other drinks in my own machine and I also have found from them that Mtn. Dew is always sold out at the next door location.  Any thoughts?

 

 

Current Accounts (all blue collar): 

 

1- 70 people, 2 bottler machines because they insist on coke products that I would otherwise not carry and 1 4 wide snack ( need a 5 but its all I had getting going).  Gross 110 per week

 

2-45 people, 1 501E, one Rowe 5900. Gross 80 per week

 

3-35 people 1 600E, one Rowe 5900. Gross 70 per week

 

In your estimation are these accounts performing up to par for those in full line for a while?  Also, these have been in place only during the last two months and have not had any hot weather.  Thoughts?

 

[hawksfan9325]

I think $100 a week gross is kind of the magic number. I think anything less is kind of a waste. I have only been doing vending for 1 year though. 

[moondog]

I think $100 a week gross is kind of the magic number. I think anything less is kind of a waste. I have only been doing vending for 1 year though. 

I agree, but you must consider where the guy's at - around here, in the land of million dollar outhouses, a hundred won't quite get it.  In a more rural area a little less might be fine

[hawksfan9325]

I agree, but you must consider where the guy's at - around here, in the land of million dollar outhouses, a hundred won't quite get it.  In a more rural area a little less might be fine

So true. Location, location, location! 

[RJT]

I think $100 a week gross is kind of the magic number. I think anything less is kind of a waste. I have only been doing vending for 1 year though. 

 

That is the magic starting number I don’t care where you are at in the country. I prefer to see more $125-$150 gross a week out of a drink and snack with that being about a 60% to 40% ratio in most cases.

 

Keep in mind most drink selections are chosen by the account and not you. I ask for a drink list when setting up an account and try to put in what they want. Then as things go I might make a few changes as needed. Snacks can be based on suggestion but you are more in control of that.

 

I have had people say that is hard in their area they live in because it is to rural, or whatever else. I tell them then vending may not be the business to start.

[Sparta_Automation]

Remember...a machine sitting in your garage is not making any money at all....so some money (within reason) is better then no money.

 

It would be hard to compete with $1 bottles, however there is room for a market of 12oz cans for .75  Even buying cans from Walmart as needed, most you are spending is .30/can.  That leave a potential profit of .45/can.  Throw in energy drinks for $2.50 a can and you will be fine.

 

People will notice the cheaper price and I would not be surprise if you didn't actually do ok there.

 

Travis

[Maddog3632]

Agreed that a machine in the garage is no good, however expanding into no good accounts sounds like a bad idea too.

As for less than 100 per week being a target I am hoping that I can get a bit more out of the two smaller accounts with better product selection.

I will probably give the can location a shot and will run rockstar, diet rockstar, Starbucks double shots, and water. Then I will have long shelf life products that Pepsi isn't carrying right now.

Thanks and please any further advice is appreciated.

[RJT]

Agreed that a machine in the garage is no good, however expanding into no good accounts sounds like a bad idea too.

As for less than 100 per week being a target I am hoping that I can get a bit more out of the two smaller accounts with better product selection.

I will probably give the can location a shot and will run rockstar, diet rockstar, Starbucks double shots, and water. Then I will have long shelf life products that Pepsi isn't carrying right now.

Thanks and please any further advice is appreciated.

It sounds like a bad idea because it is a bad idea to expand in "no good" accounts.

Here is the thing, it is near impossible to get numbers where you want with better product selection. What I mean is if you are running 40 select machines you can only have so many selections and variety. Unless the current vendor is a complete idiot they have tried multiple type varieties already. Yes, some get stick in their ways or don’t listen to the customers but most give an honest shot at pleasing the customer with what they want.

 

If you give your accounts an honest try at a good variety and selection that will work. These folks that complain at these accounts usually are the most vocal and eat the least. In other words you can’t please everyone all the time. Last week I had an account that had to have Lays brand potato chips. I was running another brand and they gave me a fit. I made an effort to take the brand out and restock with Lays chips. I went back this week and only one bag had sold out of the entire rows I had put the Lays.

 

 I have seen where things like Energy drinks and such just don’t sell. Then what? Long shelf life products are great but not to make accounts work. Especially high cost products like energy drinks that get into your cash flow that much deeper.

 

 

Most these type accounts are a pain to make any better and you end up chasing your tail and still have a dog account. That is why good account assessment is so important from the start. Some of this can be decided from advice from people on this forum, experience, etc. Some accounts will even fool the most experienced vendors. Some will do much better than expected and some will not do what was projected.

 

It is getting harder and harder to operate your own business with high gas prices, taxes, regulations, cost of goods, consumer pricing demands, etc. I don’t need pain in the rear accounts that don’t make money.

 

 I had a guy ask me one time how many accounts and how many machines I had. It isn’t about how many accounts its how much money you are making. Target the better accounts and grow slow and PROFITABLE and stay away from the dog accounts. Let others deal with those headaches and you stick with the better accounts. One of the top reasons people get out of vending before they see any real profits is because they get dog accounts that don’t make any money. Some people like to give the advice “well you have to start somewhere” well that true but you may end up getting no where in the end because you didn’t start out the right way from the start.  

[hawksfan9325]

So damn true. Besides people say, "I just wanna learn with this first account". Why would you want to learn with an account that is going to be needy, lose you money, and cause unneeded stress? Shoot for those 3, 4, and 5 star accounts. I got caught up at first trying to land the small ones to "learn the business". Screw that, I am gonna find the best accounts I can, If I am spending my time and money in this biz. 

It sounds like a bad idea because it is a bad idea to expand in "no good" accounts.

Here is the thing, it is near impossible to get numbers where you want with better product selection. What I mean is if you are running 40 select machines you can only have so many selections and variety. Unless the current vendor is a complete idiot they have tried multiple type varieties already. Yes, some get stick in their ways or don’t listen to the customers but most give an honest shot at pleasing the customer with what they want.

 

If you give your accounts an honest try at a good variety and selection that will work. These folks that complain at these accounts usually are the most vocal and eat the least. In other words you can’t please everyone all the time. Last week I had an account that had to have Lays brand potato chips. I was running another brand and they gave me a fit. I made an effort to take the brand out and restock with Lays chips. I went back this week and only one bag had sold out of the entire rows I had put the Lays.

 

 I have seen where things like Energy drinks and such just don’t sell. Then what? Long shelf life products are great but not to make accounts work. Especially high cost products like energy drinks that get into your cash flow that much deeper.

 

 

Most these type accounts are a pain to make any better and you end up chasing your tail and still have a dog account. That is why good account assessment is so important from the start. Some of this can be decided from advice from people on this forum, experience, etc. Some accounts will even fool the most experienced vendors. Some will do much better than expected and some will not do what was projected.

 

It is getting harder and harder to operate your own business with high gas prices, taxes, regulations, cost of goods, consumer pricing demands, etc. I don’t need pain in the rear accounts that don’t make money.

 

 I had a guy ask me one time how many accounts and how many machines I had. It isn’t about how many accounts its how much money you are making. Target the better accounts and grow slow and PROFITABLE and stay away from the dog accounts. Let others deal with those headaches and you stick with the better accounts. One of the top reasons people get out of vending before they see any real profits is because they get dog accounts that don’t make any money. Some people like to give the advice “well you have to start somewhere” well that true but you may end up getting no where in the end because you didn’t start out the right way from the start.  

[moondog]

Agreed that a machine in the garage is no good, however expanding into no good accounts sounds like a bad idea too.

As for less than 100 per week being a target I am hoping that I can get a bit more out of the two smaller accounts with better product selection.

I will probably give the can location a shot and will run rockstar, diet rockstar, Starbucks double shots, and water. Then I will have long shelf life products that Pepsi isn't carrying right now.

Thanks and please any further advice is appreciated.

 

Just remember that a machine in your garage, while not making anything. is not costing anything either like validator and mech replacements you'll end up doing in marginal accounts - not to mention your time and waste factor.  Look for quality accounts and let your competition waste their time and assets on the dog accounts.

[RJT]

Just remember that a machine in your garage, while not making anything. is not costing anything either like validator and mech replacements you'll end up doing in marginal accounts - not to mention your time and waste factor.  Look for quality accounts and let your competition waste their time and assets on the dog accounts.

 

^^^^^^ what he said^^^^^

Thats the long of the short of it!!!!

[mission vending]

^^^^^^ what he said^^^^^

Thats the long of the short of it!!!!

More like the Cliff notes version if you ask me....

[RJT]

More like the Cliff notes version if you ask me....

LOL or the short of the long of it.

[jerry1973]

I agree with whats being said, but I also think that an account that is too good can also kill you. If your first account is a huge factory who is requesting all new equipment and food, it will absolutely destroy a vendor with no experience. The cash outlay for the equipment is huge and then the time spent is also a huge factor. Classic all eggs in one basket scenario. I think just concentrate on medium income accounts that will settle for used equipment and build slowly. If you lose one, oh well you have 20 others to help keep things afloat, but if you lose the whale its game over, at least for a while.

 

After you get a good base of accounts and cash flow, then go after the beast accounts!!

[RJT]

jerry,

 

I agree 100% with you and maybe I should have made that more clear. New vendors need to get good solid drink/snack accounts first then go after the big accounts once they get things organized. Glad you brought up that point.