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Texas vendors


Broncho

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We've been in this business a long time and over the years I've seen a lot of different competitive approaches. I've dealt with the majors and nationals and always been more than successfull.

Over the past 3 years I've noticed a transition to lower prices on every front. I've seen vendors do beverage delivery at $8.50/24 pack or sell a case of 40 pack folgers for $22 with no minimums. Pricing king size candy at $1.00 and LSS chips at $0.75 and bottles at $1.00

We've seen accounts get lost to super high commissions of 45-50%. We would revisit the accounts and give them our previous numbers ans most times find that they are actually paying these commissions at a loss. Always expected from bottlers, but these werent bottlers.

It seems like vendors are willing to do anything to get a vending, coffee, delivery account. Sometimes I wonder if they actually think they can undercut until competition is non existing, but after years of trying they haven't been sucessful.

So who's the worst majors you deal with in your area? I'm mostly curious of the Texas vendors because I deal with large branches with locations in Dallas, Houston, San Antonio and Austin. Always curious what their practices there are and pricing.

Keep in mind that average pay in my area is $18/hour and even Walmart starts @ $12 here so workers aren't cheap.

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I think what you're seeing is the result of the downturn in quality vending and coffee locations prompting more people going after smaller pieces of the pie.  The government can brag all they want about how the economy is turning around but vending is still a service industry and until businesses are flush with employees and significant new businesses open up this will be a deteriorating condition.  If you think about it, vending has been and will be the last to recover because we depend on everyone else recovering first so we have people to sell to.  I personally don't see it coming back to what it was just 7 years ago, let alone 20 year ago.  Washington has allowed corporations to move whatever parts of their businesses offshore which leaves a larger and larger service economy here, not to mention that wages are still stagnated to what I believe is a 1982 level for most middle class families. 

 

Stick to your guns and let the undercutters fall by the wayside.  You might take a few hits in the short term but your experience and vending knowledge will allow you to be the one who survives - and gets that business back when the slow thinkers give up.

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I would agree if it wasn't for the fact that my area was in a major oil boom for the past 5 years. I have friends and family that make who over $100,000 a year. We have many accounts with bodies in the 500-600 mark. Though oil is on a down turn and I've had some companies layoff bad, this trend is the same regardless of boom or bust.

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Yes you and the oil shale and fracking areas have been the exception to the economic rule and I suppose that then brings greedy hangers-on out of the woodwork.  It's obvious from their below market prices that they don't truly understand the business and just see it as quick money.  That's why you and the other competitors on your level should come out ahead in the end.  You just don't know how long that might take.  If Saudi Arabia gets it's way you could see a long downturn and that would accelerate the newbies' exits from the business.  I don't envy you in that type of business environment.

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To be honest I'm not really worried about me or my emps. We have invested heavily in our micro market solution both as a resell and in our operation. It's been paying off incredibly as of late. In fact, in a month I would expect to see some news on us all over because we've been working on somr tech for the past year that will blow everyone away.

Regardless, it's extreamly frustrating losing an account when you had them for almost 30 years over an undercut. It makes no sense and with managers constantly being swayed to higher paying jobs or contacts are changing constantly.

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Bronco 

 

In my area it is almost all oil field related business. So I'm starting to feel the slow down in my area.

 

I met up with a former co-worker and I ask where he was working now, a fabrication/wielding yard.

 

Ask if they had snack/cold drink machines, hoping to get my foot in the door, yes he told me great vendor!

 

Cans are .50, bottles $, chips are .60 and pastry .75, now get this candy is .75 a bar.

 

I told him to let me know when he fails and pulls his machines.

 

I will go visit and leave my card for just in case.

 

cajun 

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I see prices in small locations like that all the time. The machines are usually pushing 30 years and don't work well.

As for the oil bust, I see it getting a lot worse before it gets better. One of my largest customers just recently stopped work on building their new headquarters, a project worth 600million. The 6 floor building is already partially up too. I've also had some of the largest oil service providers completely cut delivery and coffee service recently to go without. To be honest I saw this coming back in late July and started pushing or company in a didn't direction as to not be forced into layoffs.

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Oil field will get a lot worse, before it gets better!

 

In my area Halliburton is large! M&M Canteen has all of their business! 

 

I see their drivers all around here!

 

Baker Hugh's and Baker Oil Tools too!

 

Very large complex here.

 

cajun

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We have... had 22 baker locations. Theve shut down a couple so far including a 400 person pressure pumping yard. I had 3 different locations lay off hard last week. 270, 150, and 60 people.

There was a large coffee service that moved into our area less than a year ago. I'm sure they will be regretting it soon as their brand new equipment looks like hell and I know of at least 3 locations they got that are basically shut down.

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To be honest I'm not really worried about me or my emps. We have invested heavily in our micro market solution both as a resell and in our operation. It's been paying off incredibly as of late. In fact, in a month I would expect to see some news on us all over because we've been working on somr tech for the past year that will blow everyone away.

Regardless, it's extreamly frustrating losing an account when you had them for almost 30 years over an undercut. It makes no sense and with managers constantly being swayed to higher paying jobs or contacts are changing constantly.

I look forward to you rolling your new kiosk out.  I know you've been working hard on it.

 

I understand your frustration.  It's hard to believe that the goodwill you had built up over 30 years didn't mean anything to the management.  It just highlights the fact that vending is often treated like a commodity to be traded around. I would bet that your relations with them began to change as younger people transitioned into management.  Seeing the same vendor in the building over several years makes them believe that there's something better out there, whether there is or not.  Just keep calling on them and you could end up with it back.

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  • 4 weeks later...

We had to turn down a new account the other day because the warehouse manager wanted the same pricing as the last guy who stopped servicing the current machines and then took them out.  He was selling chips at .50 and cans at .60.  I told the manager that we sell our cans for .75 and the reason the old vendor went out of business if because he was not charging enough to make a profit.  We left him our contact information so hopefully he will call back.  I would love to put a Royal 805 in the breakroom and a snack machine.

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It's funny how EVEN when the other vendor pulls out, an account thinks they still deserve the same pricing because well.. they got it before! Of course, compared to the old guy, your prices will look like sticker shock.  They'll probably check with other companies and get similar pricing to yours but.. compared to your pricing.. there won't be so much sticker shock so they'll want to go with them instead of you, even if prices are the same.

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Stick to your guns. Ive replaced bigggg competitors here in my area in texas. Go in with better or alike equipment, and raise prices. The one i got this month, had 8 machines and cofee. Theyd been there for 10 years and had pretty new equipment. Cans were at .60c and 20oz were at 1.25. All candy and lss for .85c. I took it over because i insisted for over a year. Couldnt take no. Now they have 16.9 sodas at 1.25, cans at .75c, no cofee, lss and snacks at 1.00 chocolates (i only sell pmms and snikers) and all pastries at 1.25c. They are extrwmely happy with me, and 2 weeks collection yielded $1400 without coins. So im sure its a 3 to 4 k account as the machines have emptied out. Stick to your guns, know how to talk to them and make your numbers work

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I don't run across these low prices in Southern CA.  .75 on cans is pretty low.  Some of the larger vendors decided to just make all cans 1.00 and they lost so many accounts. If I would run across those .50 accounts my first thought would be "Subsidy" vending.  We lost of couple of bids because we didn't realize the account was on subsidy.

 

I do love micro markets in offices.  pricing isn't as closely watched and you can provide lots of product variety. There hasn't been much of a down turn in the last 10 years in S. CA.  They continue to grow and the accounts get bigger.  

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I've run across some blue collar places I. So cal with .50 cans but mostly it was the business doing there own vending

One was a Feed store the other a metal supply place

Also bottler machines in a frys electronics at 50

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