Honor Box Update

[AngryChris]

I have been managing my honor box route for over 6 months now.  It has gotten much easier and much less stressful after taking care of several accounts.

 

I started with roughly 60 accounts.  Out of those, 5 were quickly pulled due to various reasons.  In the first 3 months, I probably pulled 4 boxes due to shortages.  In the past 3 months, I may have pulled another 8 boxes or so due to shortages, slow sales, or other issues such as mice problems.

 

On my last count, I am left with 42 accounts.  Oddly enough, my gross revenue figures seem to be very similar to what they were when I had about 60 accounts.  This is probably due to providing a better service than the previous guy did.  I have learned that honor boxes are like vending machines in regards to increasing sales via better service.  The difference is that honor boxes can take way longer to increase sales.

 

Over the past 6 months, I was having issues with 3 problems.  The first problem was obvious -- shortages.  By shortage, I am talking about not having enough money to account for the products that are missing.  The second problem was stale product.  This didn't mean a slow account necessarily... rather, it often meant that I was putting the wrong product in the location or the dates weren't that good when I put it into the account.  The third problem was slow sales.

 

The first thing I did was I found my accounts with slow sales and I simply pulled the boxes.  We are talking about accounts that do less than $5 per month.  Some of these locations would have 0% shortages but many of them were out of the way, causing time constraints, unnecessary fuel expense, and downright frustration for being so slow (and requiring so much work to service... ie. removing most of the remaining items and replacing them with items with good dates).

 

The next thing I did was I figured which accounts often had stale products and I devised a simple plan.  The plan was to do two things.... First, I made notes on my cards of what products sold and what products did not sell.  Secondly, I learned that the easiest way to manage the stale products was simply to REMOVE the products BEFORE they expired.  Instead of leaving a product in there that would expire by the next service cycle, even if it was just one item, I pulled it and put it into a separate box.  That box was to be used for accounts that would sell the product quickly.

 

The third thing I did was I mentally divided my boxes into two different types.  There are the profit makers and the loss-prevention boxes.  After pulling most of the boxes due to shortages and slow sales, I still had a handful of accounts that had shortage problems but were very high-volume locations.  One of these locations has a shortage of about 40% but they buy everything I put in their box.  The profit-makers are my typical boxes that might sell 20-30 pieces per month with an average shortage of about 10%.  The loss-prevention boxes don't make much profit but they prevent me from simply throwing product away.

 

In the end, I am left with a "route" of honor boxes that has an average shortage of about 10% but I have very little stale product anymore.  I have also reduced my product selection down.  I only carry Oreos, Famous Amos cookies, fruit snacks, variety pack of Grandma's cookies, and 2 different types of LSS variety packs.  Because of that, I need very little space in my vehicle and that allows me to carry excess supplies that sell.  I might have two boxes of Famous Amos and 6 boxes of chips to make sure that I finish my route without running out.  The 40+ boxes that I have left are good accounts where I simply walk in with a couple of boxes of product, do all of my accounting and restocking on the spot, collect my money and whatever is left in my boxes and take it back out to my vehicle for the next spot.  On average, I probably spend 10 minutes driving and 10 minutes from the time I leave my car to the time I get back into my car.  I can easily do 3 boxes per hour, so those 42 boxes take 14 hours every 2 weeks (7 hours per week for 21 boxes).

 

Honor boxes are profitable but it really does take a lot of honor boxes.  I can imagine being a full-time honor box service.  I think you would max out at maybe $400/day in gross revenue per day which would be nice but unlikely to happen.  Once my full-line vending gets about 50% bigger, I will consider selling off the honor box route.

[treadmill]

Thanks for the update Chris. Sounds like you have it under control now with the system that works for you. Are you planing to expand anymore or are you just happy with it the way it is?

[AngryChris]

Thanks for the update Chris. Sounds like you have it under control now with the system that works for you. Are you planing to expand anymore or are you just happy with it the way it is?

I'm happy with what I have. I am a full line vendor so it feels as though the honor boxes get in the way at times. I'm already full time so I may just sell them off when I get more full line accounts.