stevo59 Posted February 1, 2015 Share Posted February 1, 2015 My fellow vending operators, I'm curious as to how you manage your day-to-day operations in full line vending. I have a couple of friends in the business and we sometimes get together and discuss our issues and problems that occur in our course of business. This forum provides an opportunity to gather opinions and suggestions from one another from around the country as not all challenges to our businesses are exactly the same given our different geographical locations. We have issues that are common to the industry and I am always looking for new ideas. I started out 17 years ago as a snack and soda vendor then added food and coffee as I gathered experience and garnered larger accounts. As time went on, I discovered that coffee and food didn't give me as much of a profit given the time and effort needed to service. Cleaning and maintaining the coffee machines took a lot of time and the amount of turns didn't justify continuing the coffee service. Food machines are a break-even AT BEST and the equipment is hugely expensive so I down sized and eliminated the larger accounts that required coffee and food machines. Besides, the competition for these accounts is overwhelming. Fifteen years ago I bought a software package from VendMaster called VendMaster Navigator. It is Windows based and cost only $2500 back then and it included a program for a Casio handheld unit that allows for data collection via a Dex cable or manual entry from the device screen. The company has since then been bought and sold and I now believe is owned by Streamware/Crane. The system now costs in the neighborhood of $35,000 to get the same features as I'm using now. At least that is what I was told 5 or 6 years ago when they dropped support for VendMaster. Long story short, when my current computer dies, I will no longer be able to use the program as it is dependent on a new password to reinstall and they no longer supply passwords. Because of the software package's reporting functions, I can pre-kit all my accounts and that allows me to service up to 18 machines in a half ton van in an 8 hour day and that includes the time it takes to load the van with crates and sodas. I get 16 mpg and during the high gasoline prices, it helped to keep me profitable. I rent climate controlled storage and hire family members and friends to fill the snack crates. After a little practice, most accounts snacks can be pulled in as little as 8 minutes. Two of the biggest challenges with this system is that if there is a sudden up tick in usage, I might not have enough product to fill the machine and to the contrary, if the machine didn't use as much product, I have items coming back that need to be returned to inventory. I started out working out of a truck in the usual manner but soon discovered that this way of doing business is inefficient so I began pre-kitting. I bought sodas on sale where I could find it but discovered that signing up with Coke and Pepsi on a third party program saved me a lot of time and not dropping $1500 to $2000 every time I needed a soda machine to be a MAJOR advantage. They install, remove and repair the machines and yes, I realize that I pay more for soda but getting it delivered and rotated without me touching it, in addition the machine usage is a HUGE time saver. My snack supplier delivers to my storage unit and also puts away my orders and rotates the stock. The only thing I now pick up are chocolates from Sam's Club. No one can come close to selling candies at the price they do but if anybody ever does, I will drop them like a hot potato. DON'T EVER UNDERESTIMATE THE VALUE OF YOUR TIME!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Operating in the above described manner allows me to service my route of 90 machines without the need to hire expensive route drivers. Currently, I am in need of replacing my software program as I realize I am operating on borrowed time. My van has nearly 400,000 miles on it and I have plans to replace it this year as I will have a loan payed off and will be freeing up the money for a monthly payment on another van. I am not sure what to do with the software issue. I have done a lot of research and the only software package that can do what I need it to do is VendSys. The last time I talked with them, they charged $2.00 per machine/month and had a $600 up front training fee. I can use certain types of Symbol handhelds. they can be bought in good used condition on Ebay for $200 to $300 and it is Microsoft based. Other than the up front cost for the training and handheld, it would cost me around $180 to $200 month. I could operate for many years before I would break even for the cost of Streamware system. I've experimented with a lot of the cloud based systems and they are very deficient when comes to the quality of reports and flexibility of a Microsoft based product. I looked at Vagabond and like what they have to offer but to have 90 machines operating through their system is about $375/month. Anyway, I thought I would share this with the rest of the Vendiscuss forum and maybe this can be useful to some of you. I hope to learn a few things from this forum that can help me be more efficient, profitable and add value to my current company. Link to comment Share on other sites More sharing options...
Russ Posted February 2, 2015 Share Posted February 2, 2015 If you could reinstall your current software system would you continue to use it? I would be beating down the doors to get a password to reinstall it with, or to find a former employee of the company who would help you out. From what you say it sounds like you PURCHASED that program and with it the right to use it as long as you want to. "Because we can" is not a good enough reason for them to put you over a barrel and refuse to let you continue using what you paid for. I would look at the purchase agreement and see if you purchased the right to use the software for a certain period, or if you OWN the software. Given the cost to replace that system if you don't really need to, I wouldn't take this sitting down. Software companies will stick you every which way if they think they can get away with it, and just because they kept the password to install the software does not mean they have the right to keep you from using it and make you buy something else. Definitely pursue this if you would rather avoid spending the money on a new system! It really irks me to have someone say 'sorry, you can't do that, BECAUSE' and expect you to give them some more money. I might say 'you will be hearing from my lawyer because you have no right to deprive me of what I've purchased.' Link to comment Share on other sites More sharing options...
stevo59 Posted February 2, 2015 Author Share Posted February 2, 2015 I tried calling them 3 years ago to get a password when my computer fell victim to a virus and was told that the mainframe that generated the passwords had been scapped and no longer existed. Sounded like bs to me. A computer tech at a company I provide vending services said that most likely the passwords are hidden somewhere inside my copy of the software because an internet connection isn't required to retrieve the password. Once the virus was eliminated, the software started to work without a new password. Short answer is yes I would continue to use it. I don't think I even have the original purchase documents. Link to comment Share on other sites More sharing options...
Russ Posted February 2, 2015 Share Posted February 2, 2015 If you have the original disks, a way to install it on another computer, I'd start trying beforehand and possibly get a new machine ready to go as a spare. That way you'll be ready when the time comes, and you'll have time to address the password issue at leisure. Working in I.T. I've seen companies pull that 'you can't do it because we said so' stuff. Really the software industry is like a government program, and it exists to make sure it will continue to exist. Good luck with that! Link to comment Share on other sites More sharing options...
AngryChris Posted February 2, 2015 Share Posted February 2, 2015 Going back to the main topic here... I do believe that pre-kitting is a great way to operate a business but I also believe that it can be quite expensive depending on how profitable your business is, how much revenue per machine you have, and distance is a factor as well. My mentality has always been quite simple. Really good accounts need everything and pre-kitting may be "too late" considering that you might need MORE than you thought by the time you get there. Really slow accounts don't make enough money to afford pre-kitting nor do they need enough product (and you probably shouldn't have them on your route). Medium-size accounts can benefit from pre-kitting as they meet the goldilocks zone (not too big, not too small; just right). Also, accounts that are way out of the way can benefit from pre-kitting if you can save on fuel. Accounts that are close-buy may not benefit as much. Another factor is that pre-kitting seems to be the most beneficial when used with snack machines. Pre-kitting for soda machines can be quite complicated considering that it is difficult to only bring exactly 30 cans of soda (which is more than one case). I'm sure this can be resolved with some neat pre-kitting but the only other option is to only bring 24 cans or bottles to create a case (just as an example) and ACCOUNT for that. The other thing I have against pre-kitting is that you have to account for everything. If a selection used 10 items... which was the maximum amount, you need to adjust your planogram or whatever software you use so that you either have 2 rows of that selection or go more often if it is a good account. If you didn't account for a change in the product in that selection, you might bring the wrong product (ie. you brought 6 lays when you forgot that you had changed that selection to doritos). I suppose that the time saved by pre-kitting will make up for the time spent adjusting your planogram but again.... this all comes at a cost. I think most of us will agree that snacks take up WAY more space than soda does from the beginning of the route to the end of the route... but soda initially takes up a lot of room. With that said, pre-kitting definitely has a learning curve to it and it could slow you down at the beginning. I am also sure that if I started pre-kitting properly, I would be able to potentially save a lot of time and money as I would be able to do far more out of my car than my stepvan. The major downside is that the cost of the equipment would probably cost more than the money OR time saved.... but that is because I am not currently maxed out on time. In conclusion, if you have solid accounts worth putting credit card readers in them (whether you actually utilize readers or not), then they are worth using telemetry to pre-kit them. If you cannot pre-kit the entire route though... and you wind up only pre-kitting maybe half of your route, you will still end up overstocking or understocking your vehicle and you will hardly see any benefit. Link to comment Share on other sites More sharing options...
AZVendor Posted February 2, 2015 Share Posted February 2, 2015 Vendmaster Software was, I believe, started here in the 90's in Scottsdale, AZ by David Hirschfeld. The company was acquired by DSD Solutions in Canada in 2000 and you can find them at Vendmaster.ca, if that's not who you've been contacting. The vending software company that Crane purchased was Glenn Butler's Streamware out of Boston which they then turned into their own software package. You're smart to use the pre-kitting functions because that will give you the ability to be much more efficient. I never implemented a system like that as software providers were just coming out with it shortly before I sold my vending business. We ran three routes totalling 300 machines and ran them with three Isuzu 14' chilled box trucks. It wasn't the most efficient way to do vending but we did it as efficiently as possible with that method of delivery. We chilled the trucks so that even in the Arizona summer we could have candy boxes out in the open as well as racks of pastry (Hostess and Dolly Madison still delivered to us in those days). Each truck was set up the same and each was configured so that the snack products were pulled in an assembly line fashion. The drivers walked in to the account with route cards showing each item in the machine and used to record several weeks of services. They recorded the item counts they needed for each machine and returned to the truck one time to load everything into crates. The bottom crate was always pre-loaded with gum and mints and a bag of change for the coin mechs. The crates were filled from the bottom of the machine to the top so that they could fill the machine from the top down. The soda was pulled in the reverse order of the route card so that they could fill the machines from the right to the left. We had similar methods for all the food and coffee machines we had as well as for the cup soda machines we ran. We never turned down an account that required food or coffee unless they just demanded more than they needed. We were averaging at the top of the industry scale back then with about $7000 per week per truck. This took drivers about 10-12 hours each day and we could have saved a lot of time by pre-kitting but we didn't plan to use it. We extensively used Coke and Pepsi equipment as well because back then there weren't any lease fees to be paid, just the requirement to purchase 14 cases per month, per machine. This was very easy for us as we owned about 1/3 of our soda machine which padded the soda sales very well. We had a loading dock and storage space for full truckloads of soda as well as the snack delivery we got once per week, though we didn't get the shelf restocking service you are getting. That's pretty much unheard of and you should be glad they do that for you. We also had a commercial freezer and refrigerator for our food and milk items. I did know of one local vendor who used pre-kitting on his routes. He ran all his routes from cargo vans but I could never tell if he did it well because all I ever saw (as a vending repair tech by that time) was virtually empty vans running around with hardly anything in them, leading me to believe that he didn't know how to run the system. He had some of the sloppiest drivers who caused the guy way too many service calls so I'm certain he wasn't using pre-kitting to it's potential. Link to comment Share on other sites More sharing options...
AngryChris Posted February 2, 2015 Share Posted February 2, 2015 *** As for using 3rd party equipment.. I don't believe that things are as viable in some regions, such as mine. In my region, you CAN get 3rd party leases from Pepsi and 7up but not from Coke (From what I understand, they stopped leasing out equipment several years ago). There are still coke leases out there but you won't get any more. The problem with Coke and Pepsi are with what you already addressed -- their prices are higher than grocery stores. This isn't so bad with cans as their prices aren't terribly higher than Sam's Club, but the 20oz bottles are going up anywhere from 5-8% every year.... going up much higher than what the national inflation rate. I can get 20oz bottles from Vistar for about $21/case right now. That's just not profitable in my area because people don't want to pay more than about $1.40 per bottle without switching vendors... and there are some decent sized vendors out there that will underbid the other vendors just to get their equipment on-location. From the math I have done... given a decent location, it is much more profitable to buy equipment outright and buy the cheapest product you can find from any source. You have greater control over your profit that way. Yes, I have to hire a mover but Pepsi usually just delivers to your warehouse around here and not to the actual location. Another problem is that Pepsi tends to be a little slow at getting parts out when you need them for one of their leased machines. I work well with 7up and I buy all of my 7up products through them directly, but they are the only exception to this. Link to comment Share on other sites More sharing options...
Lake Cities Vending Posted February 2, 2015 Share Posted February 2, 2015 I've been trying to decide if I want to keep my 3rd party Coke machines or not. Here you can still get them and they don't enforce the 10 case per month policy. I just don't like paying over $10.00 a case for product. I have been looking at software also trying to decide on that. Link to comment Share on other sites More sharing options...
stevo59 Posted February 3, 2015 Author Share Posted February 3, 2015 Thanks for all the replies! Since I've been pre-kitting for so many years, I don't have it down to a science but have worked out a lot of the kinks. I limit the sodas to delivery minimums of half a case of cans and 6 bottles PER ITEM/PER MACHINE. If an account only used say 7 or 8 cans of a certain flavor and there are still more than 16 cans available, I will not replace the used items. Same for bottles. It saves a lot of time, space and of course helps with the cash flow. The biggest asset in pre-kitting is the software used to predict refills. VendMaster is o.k. but the algirythm could use some tweeking. It might serve me well if I just bite the bullet and buy a new system. Link to comment Share on other sites More sharing options...
WhiteRoom Posted February 3, 2015 Share Posted February 3, 2015 While it may be obvious, I just want to point out that when most people around here talk about pre-kitting, they are talking about using sales data generated by credit card readers on the machines to know exactly how much of each item in each machine was sold since last service, and building the pre-kit from there. Stevo is using past sales (I assume entered by hand or by dex cable) to predict what is needed by machine. I do that as well, but without the fancy software, so my pre-kitting is fairly inefficient. I have a small enough operation that it works for me and I don't mind returning items to inventory at the end of the day. It keeps me from having a huge truck which I don't want. Stevo, I think the big thing you need to consider in the event you actually buy a software program, is if you want to continue predicting based off of past sales or if you want to switch to real time data from card readers. Seems like you prefer to stick with one system for a long time, which is great, but might lead you to want to explore the card reader based approach, as they will become more and more common over the next 15 years. Good luck with the software/password issue! Link to comment Share on other sites More sharing options...
bkyleclark91 Posted March 25, 2016 Share Posted March 25, 2016 Yes, bumping an old thread. Having a hard time using the search here. Do you only "pre-Kit" only machines that bring in over a certain amount? Or all of your machines? You need a merchant account for this I assume. If this is not a "live" process of the transaction; instead offline (which Ive heard of a little) then the numbers get processed later? Trying to wrap my head around it. Here in California Im sure you can get away with charging $1 a soda opposed to $0.75 in some other places; means then were using bill validators lot more. Credit cards seem the next jump. NOW these cards are all going to 201, meaning chipped cards. How will this effect your business and use of pre-kits? Link to comment Share on other sites More sharing options...
AZVendor Posted March 25, 2016 Share Posted March 25, 2016 You can pre-kit any machine with detailed record keeping and a modem in the machine. The merchant service isn't needed until you actually use card readers on any machines. Some providers will sell you modems only that use the DEX data stream from the machine to monitor unit sales. If you invest in that technology then you might as well use card readers too. Card readers don't make sense on low priced machines as they will eat you up in fees, but high priced machines are perfect for card readers. You can mix card-equipped machines with modem-only machines within the same service provider. That way you can get data from all machines regardless of sales volume but if you have low volume machines then you should be relocating them to better accounts. You will also need to ensure that every machine you deploy has current enough software so that you can actually get DEX data from it. Older DEX machines don't play nice with newer technology. Read these forums for a few months and you find these things out. Link to comment Share on other sites More sharing options...
paylab Posted March 25, 2016 Share Posted March 25, 2016 Interesting thread, especially when I only experience the machines from my computer. We released a cloud based VMS package a few weeks ago and we will be following it up with an Android app in about 2 weeks that will replace the traditional handheld. We will be offering a free version of both the VMS and app that covers basic sales reporting and a more robust enterprise package that can also handle scheduling, routing, pre-kitting and cash accountability. We will have our 3G telemtry units available this summer, but in the meantime we can capture DEX data by integrating your card readers. Please feel free to open an account at dexlink.paylabnetworks.com or PM any time. Link to comment Share on other sites More sharing options...
Southeast Treats Posted March 25, 2016 Share Posted March 25, 2016 Lots of good input above, let me just add that I am a big fan of ParLevel systems, and they might be a solution for you, may even be able to move your old data over to their system. I use them with a tablet for my handheld. They charge less for offline machines and I have worked out a lot of the prekitting bugs that people talked about above as their system allows a lot of individual user customization.... Link to comment Share on other sites More sharing options...
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