Renting a full line machine ?

[ghostridergt]

There is a company a few minutes away from me that offers full line machines for rent for about $50 per month. Does anyone think this would be a good way to get my feet wet with full line vending? All in all the startup costs would be WAYYY less this way considering all I would really have to do is get a locator, get the machine delivered and stock my machine for the first go round ( in theory ). So please, does anyone have anything to help me out with this idea? Im looking for blunt honest truth here so please dont hold back when it comes to possible pitfalls etc ,im here to learn as much as possible and cant do that with the kiddie gloves always on lol.  Also any repairs required are covered by the company i'd be renting my machines from.  Thx again,

Floyd

[alyssamma]

FYI, Coke, Pepsi, 7-up, etc. will all rent you machines for *free*.

That being said, there are a few problems...you need to buy the product from them. And, depending on where you are located you may wait a while for service.

However, I have a good friend who does Pepsi and 7-up machines and is very happy with it.

Kevin

[ghostridergt]

I did not know this, that is DEFINITELY worth looking into when it comes to the drink end of things, thats actually pretty awesome!! So I'd only really have to "rent" a machine for snacks About how much does it cost to stock a 20oz machine with their pruduct on average? What do you think about renting a snack machine for $12 a week in that case?

[alyssamma]

Well, like I said I haven't personally done it but my friend does. I know others on this board have too, so maybe they'll chime in. As for the snack machine, you have to make sure you have a good location otherwise $12/week will be a good portion of your profits.

For full line, you are looking at a COGS of about 40%. However, add in gas, taxes, etc., and you get to 50% or more pretty quickly.

This means you'd need your machine to make $24/week to bring home $0 profit. If it was making $50/weeek then you'd make $13/week profit (50% of $50 = $25 - $12 rent = $13).

So, how busy is the location you will be in?

As for getting the machines from Coke, Pepsi, etc., below is a snippet from my friend. Basically you need to order a minimum quantity.

Do not know if it is different in PA but here in Ohio the minimum order is

$150.00 a week or about 10 cases a week. Once you establish an account with

them, after you place your first order, they will call you on a weekly

basis, usually two days before your delivery date.

So, this isn't something you can do with one machine...unless it is in a *very* good location. I would say you need 4-5 machines minimum...and then you are just ordering $30-$40 worth of product per machine per week.

Anyway, hopefully this makes sense.

Kevin

[Brassine Vending]

Most Definately do NOT rent the soda machines. Coke, Pepsi and RC will let you have a machine for free as long as you purchase so many cases from them.

I am in Southern Indiana and for me to get 20oz Coke products, I am looking at $18.72/case If I buy 35 at a time!!!! which equal .78/bottle. If I go less than 35 cases then my cost goes even higher.

If I want a machine from them then I have to enter an agreement to purchase a TOTAL of 100 cases over the next 12 months per machine they give me.

To keep him from getting into trouble I will not mention his name or company, but a friend of mine owns a national chain pizza store and is able to get the 20oz cokes for .58 each and said that I could buy off of him anytime I wished.

I was at the point of getting my machines and agreements signed through coke when they "salesman" realized I was NOT in his district and gave me the number to the bottler that serves my area. I have been calling them every other day for almost 2weeks now and I keep getting the same message from Kim, Amber and Shawna. We will have the salesman that covers your area give you a call.

I don't know about Pepsi or Royal Crown Cola yet, as I haven't heard from them yet. But I just inquired last Thursday.

But Actually what my plan was, was to use their machines until I saved up enough money and purchased my own machines. The only place I can get 20oz drinks around here is from the bottler and quite frankly, I can get the 24oz drinks from my local wal-mart CHEAPER than from the coke bottlers. I can get the 24oz coke bottles for around .54 each AFTER tax.

[alyssamma]

Just to add to this...from what I have heard, Coke is the most difficult to deal with. My friend works with Pepsi and 7-up.

Still, you do need to purchase a minimum amount each week.

Kevin

[ghostridergt]

Seems like the bottlers are out to stick it to you. How much of a profit can/do you make with it being .78 per bottle? At one of my jobs the cheapest coke product in the machine is $1.10 per bottle, with powerade going for $1.25, and minute maid juices going for$1.75.

[alyssamma]

For my friend it is about $0.60-$0.65 per bottle. He makes about 100% profit on each transaction (just looking at COGS).

It really isn't that different, and maybe even better, since a) he doesn't have to pay for the machines and doesn't have to fix the machines if they break.

Kevin

[Brassine Vending]

In Southern Indiana most of the machines that are open to the public are running between 1.10-1.25

There is a guy I know that goes after the Motels/hotels and schools. He owns his own machines and has them converted to vend 24oz bottles for $1.50-1.75each and if you look around sams club you can get the 24oz bottles a heck of alot cheaper than the 20oz's My cost for 24oz is around 58-60 cents depending on if they are pushing them out the door or not.

But anyways, the guy that has the hotels and schools gets the 24oz and charges that much due to the commission he has to pay. At one school he was telling me about that with the 6 machines he has there, he brings in about 2500/week. But, the school gets a cut of 45cents for each bottle sold.

He said right now he is looking at around a 45 cent profit. But if cost goes up, he is pretty much screwed. Due to having a contract with the school for 5yrs. @ .45 per bottle sold.

[ghostridergt]

Good to know we're not getting gouged out here. So how do you guys locate the machines rented through the bottler?

The only locator that i've found that really locates bigger machines doesnt have any kind revenue guarantee. With the price of locating a machine that big i'd feel alot better if there was a guarantee of some sort, like with the bulk machines. Not only that but to meet the minimum purchases I need to move some serious volume since its on a per machine basis.

Otherwise id have an assload of inventory not making money for me. There is a lot more to this than I first thought, honestly that excites me that much more. Thanks for all of the advice thus far everyone, Please keep it coming!!!

[alyssamma]

Midwest says they'll locate for $500 - not cheap, but they do revenue guarentee on bulk so they might on full line.

There is a thread about "Ethical Locators". The guy there said $250 for VENDiscuss members.

Kevin

[Brassine Vending]

In my area most of the companies that have a lot of traffic/employees are already taken by a vending company out of a town 30 miles south of me. I have seen their machines as far way as 120miles away from them. I have heard that they are so big that they have a coke and pepsi truck come in on monday's Weds, and Fridays and the truck leaves the place with a different trailor.

So basically what my plan is, is to place outside to the public. Coke, Pepsi, RC. One each for cans and one each for bottles.

I am going to be purchasing a location from an old man that is retiring and shutting down his business for $3,000 at the first of the year. and then pay him $20/month for electric bill. I also get a 8x10 building along with the two security cameras he has in place.

[Summit Vending]

Floyd,

My deal with Pepsi is pretty  good, I can get as many machines as I need and my order is 15 cases per month per machine. I only have one machine with them now but will hopefully be adding 6 more in the coming weeks. I currently offer Pepsi products through my machines and I'm ordering about 15-20 cases per week on average. I think it's a real good deal only drawback is brand loyalty. Hope this helps.

Brian

[VendSmart]

Hey guys kind of new here, but I figured I'd mention that In  my area the local Coke people stated that they no longer provide the free machines, instead they offer to place a machine at the location which they will service and pay you only 5 to 10 percent max, per vend.  So in this case it probably would be benefial to rent a machine if it's a good location.  Pepsi has similar policy in place, and in both cases they will not even look at you if you don't have a brick and mortar business / or have commercial warehouse where they can deliver the product.