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Help - Proposal for account with 600 employees


elvin

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Ok.  I have been doing this for a few years, but I got a call today from a food processor in town that has over 600 employees.  They want a proposal because they are looking to change vendors.  The have a main break room that has pop, snacks, and cold food, and two other smaller break rooms that offer coffee service.  My question is that we currently offer only cans, should I be proposing bottles?, and how much do folks usually charge for those?  I have not done cold food before, it sounds like a pain, but what should the markup be from the prices that I would get the items for at vistar?  Right now I just need to give them prices so they can consider them.  They are also wanting OCS, but I will post that in the other forum.  Thanks for any help and any advice.

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Ok.  I have been doing this for a few years, but I got a call today from a food processor in town that has over 600 employees.  They want a proposal because they are looking to change vendors.  The have a main break room that has pop, snacks, and cold food, and two other smaller break rooms that offer coffee service.  My question is that we currently offer only cans, should I be proposing bottles?, and how much do folks usually charge for those?  I have not done cold food before, it sounds like a pain, but what should the markup be from the prices that I would get the items for at vistar?  Right now I just need to give them prices so they can consider them.  They are also wanting OCS, but I will post that in the other forum.  Thanks for any help and any advice.

The first thing that I would do is look at their existing setup and tactfully get them to tell you what's wrong with it.  If they are concerned about the pricing, this may well be a non commission account.  A one hundred percent markup is standard for snack items - but many of us have held candy bars to a dollar while making up the difference elsewhere with cookies and crackers we pay 25 cents for but charge 75 cents.  Seeing the current setup will give you a good idea where you'll need to be with pricing.  This would be a great account to get so don't be greedy.

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You definitely need to meet with the decision maker so that you can prove your interest in meeting whatever needs they have that aren't being met now.  You can use this meeting to share information about your company and the types of accounts you currently have experience with (don't be shy about seeming a little larger than you are), see the machines they have, where they are located and to ask questions about the staffing, break and lunch times, your access to the breakrooms, etc.  If all you do or all they allow you to do is offer pricing, then they are not a service driven account but rather one that looks at vending as a commodity and you can make service improvements and machine improvements until you're blue in the face and nothing will matter other than your prices and probably what commission you'll give them.

 

You should probably offer frozen foods rather than cold foods so that you can reduce your stales and increase sales with higher price point items and ice cream selections.  You should also consider a full size coffee machine for the main breakroom due to the possible volume of coffee consumed during a concentrated break time.  This could be a gold mine for you if you do it right, so all options should be on the table.  Bottles if that's what they want or cans if price is a bigger deal.  A mixture of both would be ideal.  Card readers on all machines in the main breakroom should boost your sales by 20% if they've never had that option before. 

 

Being an old school guy and knowing that locations with this kind of possibility don't come along very often, I would go with two soda machines in the main breakroom with bottles and cans.  A 40 select snack with dual spirals and guaranteed vend.  A frozen food machine slaved to the snack machine with sandwiches, burros, muffins, TV size dinners, Hot Pockets, and at least one dedicated shelf for ice cream.  If they don't intend to offer free coffee that they buy for the employees then I would also give them a full size coffee machine with dual cup sizes.  The soda and snack/frozen machines would all get card readers.  If they are willing to pay for the employee's coffee then you have options for countertop coffee or single cup machines that can get you good profits from the ancillary product sales.  The satellite areas that you say also have machines (only coffee now?) would get machines sized to the sales volume expected in each, such as a National or AP combo machine or a pair of slaved USI machines. 

 

Don't be afraid of spending some money to do this but don't do it unless they will give you a 3 year contract so that you can pay the machines off and still have a year or more to make a good profit.  Also don't be shy about getting prices that will make this a profitable venture for you.  Far too many vendors will give the farm away to get an account this size and then never make the kind of profit that they should for the investment they make.  I've been there myself and you can't undo the decisions you make now.

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Thanks.  This is good advice.  I am worried that they want to know prices most of all.  I am worried that I am going to get into something that is a lot of time and too little profit, so I do not want to lo-ball and get stuck with it.  My only competition in this town are some corporate vending companies, so I kind of know who I am up against, and I have been able to get another of their locations because they had such poor service.  My biggest concern right now is the cold or frozen food.  I am new to that and I could use some help with what to quote on frozen or refrigerated items, I can see my cost from Vistar, but if I start marking it up too much then I might look greedy.  I was hoping to find what these types of items are typically marked up.

 

They do want to give their employees free coffee, so I am putting together an OCS proposal.  I am new to that also, but I think I can figure it out.

 

Thanks again for your help.

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This location is screaming Micro Market to me.

 

Walta

Yup.  Micromarket the large lunch room, and do Soda and Snack machines in the satellite break rooms.

 

If you are going to have to invest in brand new equipment, you might as well make the investment in a micro market.  If you don't, surely another competitor also bidding will. 

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As far as bottles vs cans, it might not be a bad idea to ask. I've seen many accounts where food and beverages are not allowed in production areas, so everyone wants cans so they can drink them faster. I've also seen accounts where they allow beverages in production areas, but only when lidded. Those accounts want bottles only.

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What would be the cost for a micro market though?

 

 

John

 

When compared to buying new vending equipment, not much more.   They are so customizable, you really can open one for as little as 15 to 20,000.  I usually am spending  around 25-30k on a market (depending on size).   

 

I am assuming for a 600 person account, you need around :

 

3 Snacks  (reconditioned AP 123's or Nat 167's worth 1800 a piece)  5,400

2 Cold Foods (recondition 431 worth 3000 a piece)   6,000

1 Coffee ( AP 213 worth 2,500)                   2,600

 

Just on reconditioned equipment you are looking at an investment of 14k, which doesn't even include the possibility of a bill changer, or maybe having to provide your own drink machines (if you don't get them free from the bottlers).     

 

It is definately worth a deep look in my opinion. 

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