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Sour gumball empire


tonythetiger

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Hello everybody!

 

It is great to finally be a part of this wonderful forum! I've spent the past few months reading everything I can about bulk vending, and you guys have given me a better education than any book I've read on vending. For that, I cannot thank you enough. In addition to having access to the downloads, I wanted to post to get some feedback on my business plan for the near future. 

 

I see a few others have posted about doing a route entirely of single head gumballs, and I would like to expand on that a bit. To me gumballs just make way more sense than candy, which was my original plan. But I'm sure you guys knew that already, so I won't bother trying to explain why. Anyway, I haven't seen many posts specifically about sour gumballs. The two or three posts that mentioned them claimed to be very successful selling them, and that they outsold regular gumballs by quite a bit. I'm curious why no one has bothered to convert their regular gumball route to a route of sour gumballs, or any other popular flavor. It would probably bring the monthly average up from 7 (is that true? seems kind of low), to maybe 10 or 15. 

 

I'd like to make a living right off the bat and then expand from there, so I'm saving enough to buy around 300 or so machines, plus the cost of gum and maybe the help of a locator for some machines (definitely not all of them, way too pricey). I plan on using NW 60's from Sam's club and selling their CryBabySour gumballs. I also plan on hiring Howard Goldstein out of Florida to help me locate. I've heard good things about him on this site. I will use LegalZoom to create an LLC, and I will partner with the NCCS so I won't have to pay sales tax (this is also in Florida, btw). I will also purchase liability insurance to protect my business assets, and I will use Vendtrak for my accounting.

 

I'd love to hear any thoughts or suggestions on this, especially from anyone else doing gumballs in Florida. I'd like to eventually get up to around 2,000 machines. I figure I can service 500 a month, or 50 a day for ten days, and that way I can cover them all within a four month cycle. Look forward to hearing from you. Thanks guys! 

 

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50 a day? That's moving for sure! No sales tax because of NCCS? Uh....... Not sure on that one. They are an expense, you don't become the charity. Laws may be different there though.

I also wouldn't wait. I would put out what I could and use the income to grow. You'll make more that way than the bank.

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You have made a great start!  You certainly have the right idea, and you are smart enough to think through all of the "to do's" to develop a plan of action.... but..   I think you have more planning to do before you start.

 

If you do not currently operate machines, how can you do any market analysis? how do you know YOU can service 50 machines in a day?  Will traffic patterns allow you to do that?  are there enough local accounts to pull that off??  How do you know that your market is not saturated?  Can you locate 300 machines within a reasonable radius?  The last thing you want is 300 machines taking up your garage... or worse yet, pay to have them stored somewhere!!! 

 

start with 50 machines..   Need to buy 300 to take advantage of a deal? Too bad!! figure out a way to negotiate the same price for 50... if you cant do that, you probably don't have much of a future placing machines!!   Get your first 50 out as close to home as possible..  how long did it take, how much did it cost, can you repeat that in other markets?  What type of accounts were most receptive, and what type make the most money??  can you service 50 in a day?  most importantly, instead of guessing average collections.. you will have your own database!  from your own market!      

 

IN SUMMARY:  The most important thing for a new startup in this business is getting started!!!  once you understand the industry, you will be ready to formulate an effective plan.  Second most important (#1 for someone who is looking to replace their income  and same as #1)  KNOW YOUR MARKET!!!!    What are the locations you will be targeting??  restaurants? factories? retail?  etc..  how many are in your radius(what is the market cap for the service you offer)??  how many can you realistically get(what is your market share):huh:  what is the cost to acquire the accounts, what is the lifetime value of the accounts??  you get the point..  learn how to swim before you dive in the deep end!!

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Thanks for the replies everybody! 

 

In response to Rodney, I'm just following casseri's advice from an old forum on state specific licensing and tax info for Florida. Mark also confirmed this on a different forum. Here's the part about sales tax and charitable organizations:

 

 Charitable Organizations

Food and drinks sold for 25 cents or less through a coin-operated vending machine sponsored by a charitable organization qualified under sections 501©(3) or 501©(4), Internal Revenue Code, are exempt. 

 

I'm assuming that "sponsored by" doesn't mean I have to be the actual charity, but it's still not entirely clear to me. I might just have to contact the department of revenue to figure that part out.

 

Hanihotdog, you make a great point about knowing the market before diving in. The thing is, right now I live in a small town in Wisconsin and I plan on moving to Pensacola Florida, a fairly big city, in the next couple of years. I doubt I would have much success with gumballs in this small town anyway, and I don't want to go through the hassle of moving 50+ machines down to Florida. So yes, I'm taking my chances for sure, but that's really the only realistic way of me getting started. I'm really counting on the expertise of my locator, Howard Goldstein, to help me find some great spots. He actually inspects each business to get a feel for traffic and how the business is doing, so my money would be well spent. My main targets will be restaurants, bars, and any waiting areas where children might be present. I'm confident my sour gumballs will compete with any regular gumballs already present. 

 

But you're right that until I get out there and experience this business firsthand I will have no idea what to expect. I'm just a young 23 year old kid so I have a lot to learn, but I can't wait to pursue my dream of being an entrepreneur. Power to those of us willing to take the risks!

 

Tony

 

 

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sounds great! Best of luck with your new venture. something that just came to mind, I wonder if the sugar coating would cause the gumballs to stick together in the Florida heat and humidity? I don't have that answer, but I'm sure it would not be hard to figure out.

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Everyone has a different amount that's needed for their standard of living. In my case I recently left a state job where I was only making 32k a year so it would be possible to replace that income with 300 gumball machines as long as you got a good mix of locations that included restaurants.

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I like the way you are thinking this through.

And I don't think there's anything wrong with trying to go all sour gumballs for now.

You can always add more product if you want.

But, to start, at least you aren't pitching just regular old gumballs (which locations may already have).

 

The only thing I would adjust to your plan: Start with less than 300 machines.

Maybe start with 10 just to make sure you like it. Then when you have run those 10 machines for a bit, you can better decide to invest in a larger route.

 

Like it's been posted, 300 machines isn't going to give you much of a living.

So, you may as well start a little smaller to make sure this business is for you.

The route will be easy to manage BUT still give you a good feel for locating, managing a route, servicing, etc.

 

 

 

GOOD LUCK!

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Everyone has a different amount that's needed for their standard of living. In my case I recently left a state job where I was only making 32k a year so it would be possible to replace that income with 300 gumball machines as long as you got a good mix of locations that included restaurants.

I didn't say it couldn't be done.  I said it would be tough. I know for a fact that there some empires out there that have done it.

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My suggestions

Don't buy 300 at one time. start with 10-20, once placed then buy the next 10-20.

If this is a couple years away, go ahead and start now. You can't be more than an hour or 2 from a larger city in Wisconsin. Buy some used machines and locate them. This would give you some good experience, some extra income and will give you a better idea if you like it.

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My suggestions

Don't buy 300 at one time. start with 10-20, once placed then buy the next 10-20.

If this is a couple years away, go ahead and start now. You can't be more than an hour or 2 from a larger city in Wisconsin. Buy some used machines and locate them. This would give you some good experience, some extra income and will give you a better idea if you like it.

I am most likely going to be buying 5-10 single head gumball machines.  I don't want to vend regular gumballs and was looking for something else.  Would sour gumballs be something only added to a location with regular gumballs, or could they be a stand alone thing?  How about Nerds Gumballs?  Although looking through previous posts it seems most people vend for 50c and these machines are 25 mechs, so I would have to change out the mechs, which I really don't want to do.  Thoughts on this?

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In my humble opinion, anyone trying to live off gumball machines should try to find a decent supplier of 1430ct gum.  The extra quantity per case makes the profit even better.  Comparing one machine with another at a different location isn't easy and most consumers of the product won't even notice. An extra $145 per case goes a long way!

 

And yes, I do that now.

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In my humble opinion, anyone trying to live off gumball machines should try to find a decent supplier of 1430ct gum.  The extra quantity per case makes the profit even better.  Comparing one machine with another at a different location isn't easy and most consumers of the product won't even notice. An extra $145 per case goes a long way!

 

And yes, I do that now.

The trick is finding the 1430/1640ct (.87 inch) at a competitive price. Right now Sam's Club has 850 count at $20.16 per case(.023 cents per gumball) in my area. The 1640 count is $32.98 per case and that has to ship at about 7 buck a case (.024 cents per gumball) so the 850 count is more cost effective at this point for me.

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The trick is finding the 1430/1640ct (.87 inch) at a competitive price. Right now Sam's Club has 850 count at $20.16 per case(.023 cents per gumball) in my area. The 1640 count is $32.98 per case and that has to ship at about 7 buck a case (.024 cents per gumball) so the 850 count is more cost effective at this point for me.

Not necessarily. If you factor in transportation costs to and from Sams and the membership fee. As well as time and sales tax depending on where you live.

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Hello everybody!

It is great to finally be a part of this wonderful forum! I've spent the past few months reading everything I can about bulk vending, and you guys have given me a better education than any book I've read on vending. For that, I cannot thank you enough. In addition to having access to the downloads, I wanted to post to get some feedback on my business plan for the near future.

I see a few others have posted about doing a route entirely of single head gumballs, and I would like to expand on that a bit. To me gumballs just make way more sense than candy, which was my original plan. But I'm sure you guys knew that already, so I won't bother trying to explain why. Anyway, I haven't seen many posts specifically about sour gumballs. The two or three posts that mentioned them claimed to be very successful selling them, and that they outsold regular gumballs by quite a bit. I'm curious why no one has bothered to convert their regular gumball route to a route of sour gumballs, or any other popular flavor. It would probably bring the monthly average up from 7 (is that true? seems kind of low), to maybe 10 or 15.

I'd like to make a living right off the bat and then expand from there, so I'm saving enough to buy around 300 or so machines, plus the cost of gum and maybe the help of a locator for some machines (definitely not all of them, way too pricey). I plan on using NW 60's from Sam's club and selling their CryBabySour gumballs. I also plan on hiring Howard Goldstein out of Florida to help me locate. I've heard good things about him on this site. I will use LegalZoom to create an LLC, and I will partner with the NCCS so I won't have to pay sales tax (this is also in Florida, btw). I will also purchase liability insurance to protect my business assets, and I will use Vendtrak for my accounting.

I'd love to hear any thoughts or suggestions on this, especially from anyone else doing gumballs in Florida. I'd like to eventually get up to around 2,000 machines. I figure I can service 500 a month, or 50 a day for ten days, and that way I can cover them all within a four month cycle. Look forward to hearing from you. Thanks guys!

You may want to revisit tax laws. Being affiliated with a charity does not take away from your tax liability. Your not able to piggy back on their 501c status. The NW from SAMs is the wrong machine for what your wanting. It holds way to much gum that combined with the FL heat and the coating that cry baby's have your looking at a mess. Get cabinet style. Make spread sheets using an out side web base for your numbers is crazy.

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Not necessarily. If you factor in transportation costs to and from Sams and the membership fee. As well as time and sales tax depending on where you live.

I buy so much from Sam's so the annual fee is negligible for me. I also live about 10 minutes from there and the 850 is on the shelf so there is really no huge transportation cost either. Prices change all of the time so this time next year the 1640 count may be the way to go for me. For now i will stick with the ease of stopping by Sam's for the 850 count as I go out on my routes. Everyone's situation is different so what works for me may not be the best move for someone else.

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On the gumballs, hannihotdog had a formula that he posted that works tell you if it's worth upgrading or not.

I personally am moving to 1080ct on some and seedlings on others depending on competition.

I've thought about ordering a pallet and then selling half of it at close to cost just to get a low price.

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I think hillbilly made an excellent point regarding smaller gumball size. it may or may not save you money on the purchasing end, and it will not drive sales higher, but it will stretch your service cycles. if you can stretch service from 60 to 90 days, your cost of service drops proportionately....

I think most people on this forum service the machines themselves, and operate out of a fuel efficient car. Thus, service cost savings are somewhat negligible. I think the more important fact is that in theory, smaller gumballs will allow the operator more time between service cycles, and ultimately increase maximum revenue capacity of the one man show.. (not necessarily maximum rev/machine)

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