Full Line Averages?

[G-man422]

     Well, with all the talk about full line lately, I was wondering what the averages are.  I know with bulk it is about $7 per head per month.  I know there are a few more variables with full line, but lets keep it simple.

     What is the average for a pop machine with an "average" location and a snack w an average location?  Maybe throwing out some of your mid range numbers would help me see some of the gross and net #s here so I can get a feel.  Are COGs still about 30%?

Thanks!

[alyssamma]

Gabe, it has been my experience that the full line numbers vary wildly. I guess bulk do too, tho

Overall the average is $140/mo. I've only been doing this for a few weeks, tho, but the numbers seem steady from week to week.

For COGS, if you are only counting product, it is 40-50% for soda and about 30% for snacks.

We will probably be able to adjust these numbers down somewhat in the coming months as we become better at managing the inventory.

Kevin

[caserri]

Gabe,

So far I'm looking at $163.00/mo from my combo in a minimal location. By minimal I mean 15 employees and no foot traffic. So far it has greatly exceeded my expectations.

As for COGs, I double cost then round up to next $0.25. I'm still less than any of my competitors. I heard that formula from another member here, can't remember who. Tedk maybe?

Steve

 

[Outlander]

Hey Steve,

How often do you service your combo?

[caserri]

I service it once per week. I was hoping for $100 in sales each month. I'm sure once the novelty wears off, the numbers will pull back but hopefully it will stay around $100.

Steve

[Outlander]

caserri wrote:

I service it once per week. I was hoping for $100 in sales each month. I'm sure once the novelty wears off, the numbers will pull back but hopefully it will stay around $100.

Steve

Is that your net or gross?

Is there any kind of published national avg., as with bulk. I would think it would be considerably higher, more in the neighborhood of $100 per week.

If your shooting for $100 mth gross, that is approx $23 each visit, with COG @ 50%, would be $11.50 net per visit not figuring for other expenses. For the past year my net avg per stop on bulk has been $16.91 and is moving up. The last 8 collection periods have netted 21.46 on average.

Just seems like a lot of work for returns that can be had from bulk, not to mention the costs involved for equipment, potential breakdown service requirements and such.

Maybe I'm just missing something.

[alyssamma]

Outlander, it is really six of one and a half dozen of the other

The avg for full line is not $100/wk. Very good locations will do that, tho. I don't have any at that level, but have a few that are close (in the $70's/week). However, I also have some that only do about $20/week.

COGS isn't quite 50%. For soda it is close, but on snacks you have a pretty good markup.

There are a lot of headaches with full line - machines breaking, storage areas, larger vehicle to service and the need to service more often.

However, there are "rewards" too. You get kicked out much less and you do make more money.

I believe it is the $ that pulls people in.

Now, I see from your sig that you have 500 triples. So, for you, you are pulling in good $ already. But many people would find managing that many machines a nightmare. So, they turn to full line.

I would say on average a full line machine will make the equivalent of 10 bulk machines. And, the time to service is the same - if you look at *total* hours spent per month.

We originally wanted to do all bulk and get to about 200 machines (triples). We figured that would gross us about $4K/mo (assuming a $20 avg).

Based on how we service, that would have taken us 8 days/mo to service - I know others can do it quicker.

Instead it looks like we'll end of with about 50 triples and 15 full line machines. We'll make a little less - about $3K/mo, but only work 6 days/mo.

The $'s come out the same - $500/day.

The profit is a little less on the full line, but factoring in *all* costs - gas, taxes, maintenance, etc., the COGS on both machines come close. We *will* make a little less profit the way we have things set up, but will be working less, so...

Others might get better numbers, but these are ours

Also, doing both bulk and full line creates a synergy. We've already been able to place one full line at a location we had a bulk machine at. I think we can do more of that in the future.

Lastly, I like eating candy bars, chips, and danishes...so the full line is great for me

Kevin

[guile]

I would say on average a full line machine will make the equivalent of 10 bulk machines. And, the time to service is the same - if you look at *total* hours spent per month.

Please forgive my newbness:) but that seems a little off to me. Obviously, that depends on how spread out the bulk route is but you would have to service the full line route (I would think) at least 1x a week. I would think (even with 10 stops) at 4x a month, it would take more time on the full line machine.

g

[Outlander]

alyssamma wrote:

Lastly, I like eating candy bars, chips, and danishes...so the full line is great for me

Kevin

I hear you there Kevin.

I only have one snack and pop and it is in a poor location, only have to service it once every 2-3 weeks. I have been thinking of expanding the full line, but not sure at this point if it will be a good match for me. I am pushing 60 and my plan does not include having to work every day or even every week.

Although with the full line I could have someone that would run the route and I think that I would feel more comfortable that it would be harder for them to skim than with bulk.

Currently I am working toward establishing my route to work 3 days on, 6 off, 3 on and 2 off, then repeat the cycle. If I want to take a vacation I can just double up before and after returning and there should be no visible interruption in service.

Guess I will have to give it some serious consideration though.

[alyssamma]

Darrin, yes, it does depend on where the locations are And you might be right about the full line taking a little more time.

You can service a full line machine in about 30min. Assume you are doing that 4x/mo and that gives you 2hrs.

Doing 10 bulks would take about 1.5hrs.

Depending on where everything was located, you might do the bulks faster.

However, as things scale, I think it will even out. More bulks will spread you over a larger area, whereas you typically have multiple full lines in the same location. Or, at least, it is easier to clump them.

So, factoring in driving time I think it will be close.

Outlander, I hear you about working every week. To be honest, we "fell" into vending by accident. And moved into full line by accident too. I'm not sure if I like full or bulk better.

Really, what I would love is to have about 50 bulk locations doing $100/mo. and nothing else

Kevin

[guile]

Darrin, yes, it does depend on where the locations are And you might be right about the full line taking a little more time.

You can service a full line machine in about 30min. Assume you are doing that 4x/mo and that gives you 2hrs.

Doing 10 bulks would take about 1.5hrs.

Depending on where everything was located, you might do the bulks faster.

However, as things scale, I think it will even out. More bulks will spread you over a larger area, whereas you typically have multiple full lines in the same location. Or, at least, it is easier to clump them.

So, factoring in driving time I think it will be close.

Outlander, I hear you about working every week. To be honest, we "fell" into vending by accident. And moved into full line by accident too. I'm not sure if I like full or bulk better.

Really, what I would love is to have about 50 bulk locations doing $100/mo. and nothing else

Kevin

True and hoestly, (as you said) it's sort of 6 of 1 and 1/2 dozen of the other. I can see arguments for BOTH sides (bulk vs full line) and while I continue to put my plan together, I am still open to ideas. While the allure of more money (and less machines) is attractive, my biggest reason for bulk is the flexibility of work schedule.

g

[Bravo Duck]

I would say on average a full line machine will make the equivalent of 10 bulk machines. And, the time to service is the same - if you look at *total* hours spent per month.

I reached a similar conclusion some time back.

[G-man422]

This is great info guys, keep it comin'

Thanks!

[caserri]

caserri wrote:

I service it once per week. I was hoping for $100 in sales each month. I'm sure once the novelty wears off, the numbers will pull back but hopefully it will stay around $100.

Steve

Is that your net or gross?

Is there any kind of published national avg., as with bulk. I would think it would be considerably higher, more in the neighborhood of $100 per week.

If your shooting for $100 mth gross, that is approx $23 each visit, with COG @ 50%, would be $11.50 net per visit not figuring for other expenses. For the past year my net avg per stop on bulk has been $16.91 and is moving up. The last 8 collection periods have netted 21.46 on average.

Just seems like a lot of work for returns that can be had from bulk, not to mention the costs involved for equipment, potential breakdown service requirements and such.

Maybe I'm just missing something.

No. You are not missing anything.

The number I quoted is gross. I am at a bit less than 50% COGs. (probably closer to 45%) I pull roughly $33.00 out of the machine each week. Even at 50% COGs, thats $66.00 per month net. Far better than any of my bulk locations. It even slightly beats my rack locations lately. Maybe I just have lousy bulk locations!

Also keep in mind that this is a minimal location. (15 employees) If nothing else, it has proven the earning potential of full line to me. If a minimal full line location beats my best bulk location, imagine what a mediocre or good location will do. Obviously I'll do much better once I get into better locations.

Steve

[coinvestor]

I think we are trying to quantify something that is different for everyone. Wholesale cost and retail retail prices for full line products will differ depending on where you live. The industy "standard" goal is for a 50% COGS. It doesn't mean that you always hit that, but this is a goal. According to NAMA the lowest COGS is seen in the $10 million plus size vending companies and is 49%. The smallest size vending company that they had on there chart (going from memory) was the "under 1 million" which still leaves alot of room, but they were at 51%.

The amount of income per machine will vary alot. I think BVI and other forum vendors agreed (in a different post) that $100 per machine per week was a good average to shoot for. Some of your machines will do a good bit more than this and some will do a good bit less. Right now, I'm running at $67 per machine per week.

In the end I think it all comes down to what kind of return you are willing to except on your money. Some people like to count there ROI months on one hand, and others don't mind using two hands and a foot.

For me, I like to see a minimum of 10% of the investment in gross sales monthly. So if I spend $2000 for a machine it has to produce at least $200 a month in sales or its getting moved quickly. I use this to buy equipment by estimating the gross sales then I know the max I can spend on equipment for the account and if I need to go with refurb's or can buy new. Keep in mind this is what I use. This is my bare minimum not my target. Many vendors think that this return would be way too slow. This method works out to a 20 month ROI at 50% gross profit.

JD

 

 

[alyssamma]

Another thing to keep in mind is how you define COGS. Many just look at the cost of the product, but that is not the true cost.

For example, where I live sales tax is paid on soda, but not snacks. Local taxes (approx. 2%) is paid on everything. There is gas, maintenance, etc.

All of this can raise a COGS that just looks at product about 10%. Also, much of it is hard to define - exactly how do you spread out gas, especially if you service some locations more than others?

Suppose you have a broken machine and need to return money?

Spoilage counts against you too.

Some things count "against" you, but are actually good. For example, my wife services the machines and she is reimbursed $0.585 per mile. This drives up our COGS a lot...but it is also way more than she spends for gas. If you have a corp, it is a good, legal, way to take $ out tax free. So, even though this drives the COGS way up, financially it is a good thing.

For full line machines I try to gross 1/6 of the cost of the machines every month. I've only bought 2 routes, but in each case this was my metric and it has so far worked out well.

Kevin

[caserri]

For me, I like to see a minimum of 10% of the investment in gross sales monthly. So if I spend $2000 for a machine it has to produce at least $200 a month in sales or its getting moved quickly. I use this to buy equipment by estimating the gross sales then I know the max I can spend on equipment for the account and if I need to go with refurb's or can buy new. Keep in mind this is what I use. This is my bare minimum not my target. Many vendors think that this return would be way too slow. This method works out to a 20 month ROI at 50% gross profit.

JD,

Thanks for your input. By your standards I am doing just fine. Since I have less than $1,000 worth of equipment at this location, my $33 per week gross is in line with your strategy. That makes me feel much better.

Also, do you remember who mentioned doubling your cost and rounding up to next 0.25? I can't for the life of me remember who said that. In any event, doing this has ensured that I remain below 50% COGs on every product. Most are right around 45% and as low as 34% on some items. Even doing that, I am at least a quarter below all other vendors in my area.

Steve

[coinvestor]

COGS should be your "Cost Of Goods Sold" only. The only thing that should be added is delivery fees and if you use the cash accounting method then you would also add expired and wasted product in that number. If you have to pay taxes when you buy your product then that would also be included, but not your sales tax thats paid when you sell. To keep it simple: all receipts from buying your product / all collections from your machines = COGS %

When you take out gas and maint and other expenses what you have left is your profit. I would estimate that my profit margin is about 25-28% (this is mostly a guess based on what I pay myself). This would be the maximum that I could pull out of my business and still pay all expenses with out growing. I run only one gas drinking step van and have only myself on payroll. If you start hiring people and adding trucks this would probably drop to about 18-20%.

JD

[Outlander]

coinvestor wrote:

I think we are trying to quantify something that is different for everyone.

JD

JD,

I agree. Most everyone is comparing monthly revenue for either gross or net but I look at it by way of stops. I compare what I pull in gross and net for each time I visit a location. With the cost of fuel being what it is now I can't justify making any stop for a net return of under $20 on the average with a negative variance of no more than 15% for any one stop. If a location can't support those figures the time between service is adjusted out. If it has to be adjusted out to far then it is time to relocate the machine.

Granted there are a number of other factors that help in my decision to keep or relocate a machine but for revenue that is my key. This is not to say that all my locations net $20 a month, just every time I stop to service. They may be on a 4, 6, 8 or 12 week schedule, but a stop is a stop whether it has lipstick or not.

I am older than some of you young "Whippersnappers":D and not as fast so I try to set a minimum of 10 calls a day, wish I could do 20 or more like some of you. With these minimums I know that I can pull $200 net or more per day.

BTW, don't you also run some Gourmet Butlers?

[coinvestor]

For me, I like to see a minimum of 10% of the investment in gross sales monthly. So if I spend $2000 for a machine it has to produce at least $200 a month in sales or its getting moved quickly. I use this to buy equipment by estimating the gross sales then I know the max I can spend on equipment for the account and if I need to go with refurb's or can buy new. Keep in mind this is what I use. This is my bare minimum not my target. Many vendors think that this return would be way too slow. This method works out to a 20 month ROI at 50% gross profit.

JD,

Thanks for your input. By your standards I am doing just fine. Since I have less than $1,000 worth of equipment at this location, my $33 per week gross is in line with your strategy. That makes me feel much better.

Also, do you remember who mentioned doubling your cost and rounding up to next 0.25? I can't for the life of me remember who said that. In any event, doing this has ensured that I remain below 50% COGs on every product. Most are right around 45% and as low as 34% on some items. Even doing that, I am at least a quarter below all other vendors in my area.

Steve

 

Sorry Steve, I was typing while you were posting.

Like I said many vendors will not accept a slow return like me. Kevins 1/6th number is a healthier place to be. I also try not to stop the truck for less than $75 regardless of the equipment cost, but I didn't start doing that until time became more precious.

I don't remember who said X2+.25. I would guess that was probably Tedk? This varies alot depending on where you are (Ted is in Canada). This would never work around where I am when there are morons (aaahhh I mean vendors) selling pastry and chocolate at .60 still.

 

JD

 

[caserri]

Wow. They price gouge in my region. I am the only vendor that I know of that sells anything chocolate for less than $1.00. My competitors also get $1.00 for a 12oz can of Coke that costs 0.25!:shock:

Steve

[coinvestor]

Outlander,

Yes, I did have butlers. I sold my last Butler in July. It was in an account with 230 employees and usage had dropped to about $18 a week. I sold off this location with the Drink and snack and butler machines because it was 55 miles one way.

 

JD

[G-man422]

JD, what caused sales to drop to $18 a week?  Was it competition?  With that many employees I would expect it to Produce well over that.

[alyssamma]

JD, in general I agree with your definition of COGS. However, it seems that lots of people use "COGS" as a synonym for "profit". I was just trying to make it clear that there are lots of "hidden" expenses. So when someone says they have a COGS of 50%, it doesn't mean they keep $0.50 for every $1.00

Kevin

[Outlander]

JD, thought I remembered you from the Butler Quarters, good to know you are here.