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Bought a Route


tanntann

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Hey Everyone, I'm new here. I recently bought a route that has 4 locations with a total of 11 machines. In 3 locations there are combo machines.

Location 1: 2 combos

MP 12 snack machine/ BC 6 Satellite

Location 2:

BC 6 Satellite / MP 32 snack

Location 3:

MP 12 snack machine/ BC 6 Satellite

Location 4:

MP 32 Snack and a Royal 650 with Bill acceptor or validator

I Bought the route about 5 weeks ago and I paid a total of $6,000.

I've serviced them twice so far and have pulled out a total of $1500 out of machines. They are always practically empty. I might service them once a week now. I'm due to service them again this Monday coming up.

So my questions are, did I make a good buy?? The machines are in fair condition, not new but not beat because they are all indoors.

And 2nd question. The can sodas are being sold at $.75 how hard would it be to raise to $.85

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Welcome to the forum Tanntann! 

 

Yes, you got a good deal with those machines.  If you actually got 11 machines then you paid $545 each (though I only count 10 in your list).  They are all USI machines other than the Royal 650 and all of the soda machines are cans or bottles, which is very versatile.  The only snack you might find annoying is the 12 selection one due to it's feeble shelves and shelf runners. 

 

Based on the revenue you reported and if that is for 5 weeks, you are on track to do $15000+ in one year.  If you have already found that the machines are selling out of many selections then you must increase your inventory and/or your service frequency or you will find yourself out the door.  Don't give the accounts any reason to look for another vendor.  The main way you impress your locations is with top notch service.  Now by my math, $1500 divided by 5 weeks divided by 10 machines is only $30 per machine per week.  Do you have one location doing the bulk of your sales?  If you're only averaging $30 per machine per week and you run out of product then you are not filling the machines or you are waiting way too long to fill them, or your prices are too low (snacks) which increases your sales.

 

You can certainly raise your can prices to .85 by reprogramming your machines, but why do you want to?  First of all you will cause a different change payout scenario.  Where you now pay one quarter with each soda bought for .75 using a dollar, you will pay out one nickel and one dime with every can bought for .85 with a dollar.  Your customers don't usually use nickels and dimes as often as they do quarters so you will find yourself having to refill the nickel and dime tubes of the coin mechs with every service.  It can be a problem if your forget to do that because if dimes run out, the machine will pay nickels out and if you run out of nickels the bill acceptor won't work. 

 

Do you pay a commission on the soda?  What rate do you pay?  What is the average can soda cost for you?  All of that plays into your pricing decision.  I'm all for making as large a profit as you can but the ramifications of an .85 price can be a nuisance. 

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Thanks for the reply. The 11th machine is a bill changer. I don't know the exact name of the machine. Yes, the account with the Royal machine is where most of my sales are. I don't pay commission on anything to any of my accounts. I do pay I flat rate of $30 a month to one of my accounts. I just thought if I raised my sales to .85 I might make more money. I've seen most machines in this area Selling their sodas for .85. I just buy my sodas at SAMs club. 32 cans for $9.98. Yea I think I might have to service them more often.

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You may want to replace any combos with two full size machines if you find the machines are running out on a regular basis.  As I'm sure you've already found noticed, combos don't hold much and you can be much more profitable with the larger machines - see the COS pinned posts at the top of this subforum, it will explain in more detail the theory behind maximizing profits by the use of efficient service schedules.  Sounds like you've got a good set of accounts there for the money.

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You may want to replace any combos with two full size machines if you find the machines are running out on a regular basis.  As I'm sure you've already found noticed, combos don't hold much and you can be much more profitable with the larger machines - see the COS pinned posts at the top of this subforum, it will explain in more detail the theory behind maximizing profits by the use of efficient service schedules.  Sounds like you've got a good set of accounts there for the money.

 

I don't always agree with moondog, but when I do, it's about this very issue.

 

You don't want your accounts to run out that often.  If they do, you need to service them more often or upgrade the equipment.  If I were you, and I had no equipment to replace them with right now, I would simply increase my service schedule (if possible) and save up to replace the most urgent accounts with bigger equipment as soon as possible.  If you have an account that sells out in 3 days, that one needs to be upgraded.  If some of them are low but not sold out between service cycles, they can wait.  Keep in mine that sold-out selections = lost profit and only having 6 selections per soda machine means that you might be missing some sales from customers who want some other flavor in your soda machines.

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