PHX1 Posted June 29, 2014 Share Posted June 29, 2014 Thought everybody might enjoy seeing our competitions machine that is in a governemt contract. The great "C" company. Link to comment Share on other sites More sharing options...
moondog Posted June 29, 2014 Share Posted June 29, 2014 Thought everybody might enjoy seeing our competitions machine that is in a governemt contract. The great "C" company. Do they ever service it? I've bought machines with more stuff than that in them Link to comment Share on other sites More sharing options...
SchligVend Posted June 29, 2014 Share Posted June 29, 2014 That hurts my stomach to think of all that money they are losing... Link to comment Share on other sites More sharing options...
PHX1 Posted June 29, 2014 Author Share Posted June 29, 2014 It gets better, 2 other machines at same college. Link to comment Share on other sites More sharing options...
AZVendor Posted June 29, 2014 Share Posted June 29, 2014 That is the problem with contracts, the locations that get serviced this poorly are still under contract and you are running uphill trying to win it. You have to understand that the contract will have a cure clause in it and as long as the vendor cures the defect within the specified number of days there will be no end of the contract. All you can do is get your name on a bidders list with the organization so that if the contract is ever voided or just expires, you will be on the list of vendors invited to bid on it the next time. Link to comment Share on other sites More sharing options...
AngryChris Posted June 29, 2014 Share Posted June 29, 2014 To my knowledge, the big "C" company is just a collection of independent vendors. It's good for the operator with a good route because you can make big money if your pricing is good, commission is low, and your COGS is low (because you get canteen pricing). It can be bad for the operator because your route could be bad and you might be stuck in an area where you can't expand much. To my knowledge, the agreement that most vendors has is that you pretty much sell-out to canteen and they "hire" you as a contractor to fill machines up and give them a hefty commission. If I am right about what I have heard about them (or close), your service will depend on whether the driver wants to really do it or not. If the location calls and complains about the driver, they might just give the account to someone else. The big crappy part is that universities often tie together in one big contract and you can't get the place unless you have about 10-100 (depending on the size of the school) machines ready to go. I would pass on most colleges. I am aware of two colleges that I would like to have but one college would need about 40+ machines (pop and snack) even though it might gross roughly $65,000-$100,000/year (which isn't worth 40 machines in my opinion), and the other college might need 35+ machines and gross roughly $150,000-$200,000/year (which is worth 35 machines). Can I afford 35 machines? No. I could easily cancel about 5 accounts and pool about 15 machines out of everything and get a small university but I don't think my machines would be acceptable (lots of single price can vendors). Link to comment Share on other sites More sharing options...
AZVendor Posted June 30, 2014 Share Posted June 30, 2014 Large accounts like these will require you to go into debt by purchasing new machines. It can be a win if you get the contract for 3 years, allowing you to pay the machines off, but you are working for free for the time it takes to pay them off. The commission rates are usually very high because of the number of companies that bid up the commissions from contract to contract. This goes for Management Companies as well. My big break was a contract that required over 100 machines. I bought $100K of new snacks and coffee machines back in 1990 and then used Coke and Pepsi for all my soda machines. The new machines I bought were such an upgrade to what was there before (old AP Candyshops and Pastryshops) that I'm sure I doubled the previous vendors sales. Unfortunately the three years to pay the machines off meant there was no profit from that account for that period of time due to commissions, taxes, vehicle costs and driver costs, but it got me into the big time and our growth took off. It's doubtful that the kind of growth we had in the 90's can be achieved now which makes the acquisition of accounts of this size kind of a premium now. Link to comment Share on other sites More sharing options...
Golfdogs Posted June 30, 2014 Share Posted June 30, 2014 Large accounts like these will require you to go into debt by purchasing new machines. It can be a win if you get the contract for 3 years, allowing you to pay the machines off, but you are working for free for the time it takes to pay them off. The commission rates are usually very high because of the number of companies that bid up the commissions from contract to contract. This goes for Management Companies as well. My big break was a contract that required over 100 machines. I bought $100K of new snacks and coffee machines back in 1990 and then used Coke and Pepsi for all my soda machines. The new machines I bought were such an upgrade to what was there before (old AP Candyshops and Pastryshops) that I'm sure I doubled the previous vendors sales. Unfortunately the three years to pay the machines off meant there was no profit from that account for that period of time due to commissions, taxes, vehicle costs and driver costs, but it got me into the big time and our growth took off. It's doubtful that the kind of growth we had in the 90's can be achieved now which makes the acquisition of accounts of this size kind of a premium now. I wrote a proposal for a large account about 1.5 years ago. I wanted a two year agreement and they wouldn't budge on one year. I ended up pulling the proposal. I didn't want to get stuck with 125 grand worth of one year old machines. Link to comment Share on other sites More sharing options...
AngryChris Posted June 30, 2014 Share Posted June 30, 2014 I wrote a proposal for a large account about 1.5 years ago. I wanted a two year agreement and they wouldn't budge on one year. I ended up pulling the proposal. I didn't want to get stuck with 125 grand worth of one year old machines. I had this happen to an account that wanted 5 machines (2 snack, 2 soda, 1 coffee) for a location with 200 employees. Two of the machines were just for their white-collar people who didn't want to have to walk an additional 20 feet to the blue-collar break room. I told them I would do it with a 2-year contract OR I would give them 1 pop, 1 snack, and a coffee on a 1-year contract and add 2 more machines if they made enough revenue. We hit a stalemate and I called my fellow vendor and he swallowed the account up. He said it barely does $200/week and he pulled all of their coffee equipment after about 6 months due to non-use. I'm glad I stuck to my guns. Link to comment Share on other sites More sharing options...
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