Guaranteed minimum commission?

[PHX1]

Hello everyone, I recently completed filling out paperwork to bid for a small college. They have about 1200 students and faculty. This is the first bid proposal that had a guaranteed minimum commission, I was wondering how the bigger operators calculate such commissions? looking for some veteran advice here, AZ where are you .

[RJT]

Usually in an RFP they disclose the revenue amounts. Did they? 

[PHX1]

They did not actually RJT.  I was surprised they did not, not sure where to go? I know the guaranteed commission is not the deciding factor but it does have some influence based on the point grading system they are using to evaluate the bids.

[RJT]

I share this story with many of my consulting clients. Back long ago I did a proposal for a small private college very similar to the size of the one you are looking at. No RFP was involved it was just a straight proposal and would not disclose to us the revenue numbers. They where looking for snack and food only because they had large contracts with the drink companies. Looog story short we ended up with the account. We placed 12 snack machines around campus including some common areas, dorms, athletics, and office/staff. We could not get the account to do more than $500 per week total for all machines. Then the vandalism started and got pretty bad at one point. We ended up pulling out of the account.

 

 

Without revenue numbers I would not do it much less with a "minimum commission". Each account is different but that I would share my experience as to what can happen even when you think an account should be a good one. 

[PHX1]

I share this story with many of my consulting clients. Back long ago I did a proposal for a small private college very similar to the size of the one you are looking at. No RFP was involved it was just a straight proposal and would not disclose to us the revenue numbers. They where looking for snack and food only because they had large contracts with the drink companies. Looog story short we ended up with the account. We placed 12 snack machines around campus including some common areas, dorms, athletics, and office/staff. We could not get the account to do more than $500 per week total for all machines. Then the vandalism started and got pretty bad at one point. We ended up pulling out of the account.

 

 

Without revenue numbers I would not do it much less with a "minimum commission". Each account is different but that I would share my experience as to what can happen even when you think an account should be a good one. 

Good  point RJT, im going to reach out to the office and see if I can get som info on how much Rev they usually get. I know the amount of commission they get from the current guy is public knowledge so i can always look there too.

[moondog]

I share this story with many of my consulting clients. Back long ago I did a proposal for a small private college very similar to the size of the one you are looking at. No RFP was involved it was just a straight proposal and would not disclose to us the revenue numbers. They where looking for snack and food only because they had large contracts with the drink companies. Looog story short we ended up with the account. We placed 12 snack machines around campus including some common areas, dorms, athletics, and office/staff. We could not get the account to do more than $500 per week total for all machines. Then the vandalism started and got pretty bad at one point. We ended up pulling out of the account.

 

 

Without revenue numbers I would not do it much less with a "minimum commission". Each account is different but that I would share my experience as to what can happen even when you think an account should be a good one. 

I'm somewhat surprised you'd have even considered a snack only account Robert.  My feeling is that if the soda companies want the account they should have to pony up for the snack services as well instead of just cherry picking all the gravy off the top with just soda machines.

[AngryChris]

I'm somewhat surprised you'd have even considered a snack only account Robert. My feeling is that if the soda companies want the account they should have to pony up for the snack services as well instead of just cherry picking all the gravy off the top with just soda machines.

The bottlers make significantly higher profits on their products so they get away with it by offering a huge commission.

But yes, the fair thing would be to offer a standard commission rather than a guaranteed minimum. From my experiences, colleges are for the big boys.

[RJT]

I'm somewhat surprised you'd have even considered a snack only account Robert.  My feeling is that if the soda companies want the account they should have to pony up for the snack services as well instead of just cherry picking all the gravy off the top with just soda machines.

 

Many of these type of accounts are like that. If you want them then you either "pony up" the big commissions the bottling companies pay or do snack/food only. I do snack only on a very limited bases for the obvious reasons. I NEVER would have thought a campus that size would have done those low numbers it did. Probably one of the biggest surprises in all of my vending career.

 

Whats funny is years later I acted as a consultant for them and "hooked them up" with the Big C vending. Helped them negotiated brand new equipment, cold food, ice cream, etc. 

[moondog]

Many of these type of accounts are like that. If you want them then you either "pony up" the big commissions the bottling companies pay or do snack/food only. I do snack only on a very limited bases for the obvious reasons. I NEVER would have thought a campus that size would have done those low numbers it did. Probably one of the biggest surprises in all of my vending career.

 

Whats funny is years later I acted as a consultant for them and "hooked them up" with the Big C vending. Helped them negotiated brand new equipment, cold food, ice cream, etc. 

Touche

[AZVendor]

Hello everyone, I recently completed filling out paperwork to bid for a small college. They have about 1200 students and faculty. This is the first bid proposal that had a guaranteed minimum commission, I was wondering how the bigger operators calculate such commissions? looking for some veteran advice here, AZ where are you .

You need to contact the purchasing department or whoever put the RFP out and request the last 12 mo. of commission reports, or revenue reports -however they call them.  If they don't have them then they are lying, getting screwed or lousy at record-keeping.  They would be remiss to accept some vague commission report simply because it's a fixed amount.  You will have no way to know what the gross sales are without that information.  If this is a private college then there is no requirement for them to make these records or the current contract public knowledge either, so you need to be careful with this bid.  You also need to know how many of the 1200 students are online students.  

[PHX1]

Good news, Just got off the phone the purchasing manager, he was very helpful. he emailed me the last two years of gross revenue and the commissions paid for the same two years. I have a ruff figure in mind that I will offer and am going to bid on it! Thank you

You need to contact the purchasing department or whoever put the RFP out and request the last 12 mo. of commission reports, or revenue reports -however they call them.  If they don't have them then they are lying, getting screwed or lousy at record-keeping.  They would be remiss to accept some vague commission report simply because it's a fixed amount.  You will have no way to know what the gross sales are without that information.  If this is a private college then there is no requirement for them to make these records or the current contract public knowledge either, so you need to be careful with this bid.  You also need to know how many of the 1200 students are online students.  

AZ, the majority of students are in person (roughly 950)