Broncho Posted October 17, 2015 Share Posted October 17, 2015 After finally hitting the sales quantity we needed in order to offer some self financing on our micromarkets, I wanted to reach out to a community of vendors to see if they could help us to decide what works best for them. Being a vending operator for over 10 years and then going into the software vending and micromarket business we hope we are offering prices that our customers feel are feasible. Our original price offering is as followed Kiosk: $5000 and $50/month Includes MEI AE bill, MEI 5 tube coin, Credit card acceptor with apple pay, 17" IR waterproof screen, Computer with DVR capabilities Now our competition offers either a high commission, monthly, or combination of both. This is the main reason we developed our concept in order to keep vending operators looking for or forced into micromarkets from loosing their shirts. This is what we struggle on how to help the operator to get started and get a ROI as fast as possible. We are considering offering the following: Kiosk with all the same features as above for $1995 and $200/month for 24 months After 24 months the monthly would go back down. This is basically a buy down program to help the operator offset some of the initial cost of the kiosk at an almost0% financing program. We are looking for any input from operators on how we can make this work best for you as we move into November and start these offerings. Our number one goal is to help each operator to keep their micromarket costs down by also offering coolers, freezers, cameras for basically our cost as well as offer custom built shelving.Thanks in advance! Link to comment Share on other sites More sharing options...
RJT Posted October 17, 2015 Share Posted October 17, 2015 Their are numerous micro market companies out now. The up front cost with any of them is much less than any full bank of equipment to me the monthly recurring is the big factor. Most full setups for micro markets (kiosk, coolers, shelving, displays, cameras,etc) is a fraction of what vending equipment would cost to perform the same functions selling the same products. IMO if you can be competitive on the recurring cost would be where it is at. Another way is to consider selling at or below cost or even giving the kiosk system away and charge accordingly. If I know my startup cost is real low I might would be willing to pay a higher monthly. Get creative and offer a few different options. Have any pics of your kiosk and setup? Have any in the market place currently? Ever considered beta testing with some vendors?m Link to comment Share on other sites More sharing options...
Broncho Posted October 17, 2015 Author Share Posted October 17, 2015 Their are numerous micro market companies out now. The up front cost with any of them is much less than any full bank of equipment to me the monthly recurring is the big factor. Most full setups for micro markets (kiosk, coolers, shelving, displays, cameras,etc) is a fraction of what vending equipment would cost to perform the same functions selling the same products. IMO if you can be competitive on the recurring cost would be where it is at. Another way is to consider selling at or below cost or even giving the kiosk system away and charge accordingly. If I know my startup cost is real low I might would be willing to pay a higher monthly. Get creative and offer a few different options. Have any pics of your kiosk and setup? Have any in the market place currently? Ever considered beta testing with some vendors?m I would rather not post pictures or discolse the name of our comapny as I am not selling anything here. I believe one of the major driving factors to the high amount of micro market manufcatures in the field now is due to the outlandish need to overprice the systems. That brings me to the point of your message where you said "Most full setups for micro markets (kiosk, coolers, shelving, displays, cameras,etc) is a fraction of what vending equipment would cost to perform the same functions selling the same products." I feel that micro markets inital investment is much higher than traditional vending as we have done a very large number of installs to date. My concern is that even though we are seeing a good payoff in most sectors, not all operators are convinced and we want to give them an ease of access. I orginally proposed my pricing for our system to make it a repitable buisness but at the same time to not make it a ponzi-esque scheme. We are trying to find the best way to make this affordable to all operators at locations as small as 80 persons. We have considered giving the kiosk away and charging as much as $300/month but we only have control over the kiosk itself for financing. When it come to coolers, freezers, and shelving it's almost impossible for us to self finance. Link to comment Share on other sites More sharing options...
RJT Posted October 17, 2015 Share Posted October 17, 2015 Why do you think the initial investment is higher for a micro market? You think a new Crane, USI, etc cold food, snack, coffee, glass front bev, stack vendor, etc is cheaper than a micro market setup? Just an FYI many vendors where not convinced on using credit card readers a few years back but that has started to change drastically. I think their will always be a need to do traditional vending but micro markets are still failry young and will continue to grow if they are proven to make better sense in some markets. Also the more the competition starts to take accounts from traditional vendors they will soon follow to keep up with the trend. Many vendors lost some accounts because not embracing credit card readers when other operators has started offering them. Link to comment Share on other sites More sharing options...
Broncho Posted October 17, 2015 Author Share Posted October 17, 2015 Why do you think the initial investment is higher for a micro market? You think a new Crane, USI, etc cold food, snack, coffee, glass front bev, stack vendor, etc is cheaper than a micro market setup? For our system? No. For other systems? Yes Take into account taht most micromarket vendors are selling a kiosk and coolers at a decent price(Sometimes as high as $10,000 for just the kiosk). But reaccuring costs are as much as $500 a month and as low as $200 excluding ours at $50/month. So with taht reacurring costs you are basically removing any chance of making the cost comparable. Some of the sales calls I take average about $250/month so if we take that into considerations look at the following: Our costs rounded up Kiosk $5000 2 coolers $3600 1 freezer $2400 8' shelving $2200 $13200 Bank of machines professionally refurbished 1 bevmax $4000 1 merchant six $3500 1 frozen $3500 1 stack vendor $1800 $12800 This is with comparing new to used. This is why we are looking for the best ROI for customers. Link to comment Share on other sites More sharing options...
SchligVend Posted October 17, 2015 Share Posted October 17, 2015 I would be very interest in expanding into micro markets if like RJT recommended had no cost up front and a higher monthly, by doing nothing upfront I would be willing to take a risk and sale this idea to a couple of my larger accounts and future accounts knowing its not going to take as much capital as traditional machines.... I am interested in learning more about your company do you have a website ? Sent from my LG-H810 using Tapatalk Link to comment Share on other sites More sharing options...
RJT Posted October 17, 2015 Share Posted October 17, 2015 For our system? No. For other systems? Yes Take into account taht most micromarket vendors are selling a kiosk and coolers at a decent price(Sometimes as high as $10,000 for just the kiosk). But reaccuring costs are as much as $500 a month and as low as $200 excluding ours at $50/month. So with taht reacurring costs you are basically removing any chance of making the cost comparable. Some of the sales calls I take average about $250/month so if we take that into considerations look at the following: Our costs rounded up Kiosk $5000 2 coolers $3600 1 freezer $2400 8' shelving $2200 $13200 Bank of machines professionally refurbished 1 bevmax $4000 1 merchant six $3500 1 frozen $3500 1 stack vendor $1800 $12800 This is with comparing new to used. This is why we are looking for the best ROI for customers. I am comparing new prices not refurbished. Because it is hard to find refurbished Merchant 6 and cold food or frozen. The selling points to vending operators on micro markets are the following. Getting higher margin Getting sales tax at POS Cheap initial investment on equipment Little to no service calls and little to no lost revenue to down time. Also if the vendor has a relationship with the bottlers they may be willing to give visa coolers at no charge along with some of the ice cream companies. Some of the dry good companies like Lance/Snyders will give you display. Link to comment Share on other sites More sharing options...
Broncho Posted October 17, 2015 Author Share Posted October 17, 2015 I am comparing new prices not refurbished. Because it is hard to find refurbished Merchant 6 and cold food or frozen. The selling points to vending operators on micro markets are the following. Getting higher margin Getting sales tax at POS Cheap initial investment on equipment Little to no service calls and little to no lost revenue to down time. Also if the vendor has a relationship with the bottlers they may be willing to give visa coolers at no charge along with some of the ice cream companies. Some of the dry good companies like Lance/Snyders will give you display. I agree with you 100% on cost but I know a lot of operators, here included, tend to set refurbed equipment and thats not avalible in most of the micromarket world. Also you can get Pespi and Coca Cola vendors from the bottlers as well to offset cost. Also displays taht are usually given are meant to be temporary and are usually cardboard. Weve used them both as a selling point and as a operator and they are usually only good for 6 months max. Also, the service call issue you broght up is a great one, as it brings me to another point we have considered. We are getting a lot of calls on converting from another company to ours and its amazing to me to see the amount of operators willing to pay $300+ a month to have a kiosk that goes down often. I know a lot of micromarkets out there tote no down time but thats just a bit unrealistic. You have to realize that there is one source of payment in the micromarket and with taht comes the burden of one bill, coin, and credit card reader. If one fails the whole market does. Now, with that said it does happen less often on a kiosk. At the same time you have to realize that with one payment source it pretty much evens out. You also have to rely on network preformance and user error which happens more than it really should. Link to comment Share on other sites More sharing options...
RJT Posted October 18, 2015 Share Posted October 18, 2015 I see many benefits to micro markets but also they are not right for all situations. I would be interested in learning more about what you have to offer and what price points you come up with. I am always looking for myself as well as my consulting clients for options. Send me a PM with info if you like and we can go from their. If you want to sell more of your systems be sure and have professional marketing material the operators can use along with a professional video made showing the system in use so the operators can show it to current or potential customers. Link to comment Share on other sites More sharing options...
Broncho Posted October 18, 2015 Author Share Posted October 18, 2015 I see many benefits to micro markets but also they are not right for all situations. I would be interested in learning more about what you have to offer and what price points you come up with. I am always looking for myself as well as my consulting clients for options. Send me a PM with info if you like and we can go from their. If you want to sell more of your systems be sure and have professional marketing material the operators can use along with a professional video made showing the system in use so the operators can show it to current or potential customers. I agree 100% as micromarkets are not for everyone. There is also a large gap between what traditional micromarket idealogy and companies like ours. Origanlly they were for 600+ locations and thats typically out of reach for most operators. Link to comment Share on other sites More sharing options...
AZVendor Posted October 18, 2015 Share Posted October 18, 2015 As the prices of kiosks, etc. come down so does the size of accounts that vendors will use them in. The kiosk offerings that remain high priced aren't doing it because their costs are staying up, it's because operators will still pay that price and because they are advertised as only for the large locations. This probably has something to do with the early adopters who are heavily invested in large location markets and therefore not brave enough to invest in smaller locations. The sellers of the high priced systems are resistant to dropping prices - it will take a few lower priced systems taking market share away before they will give in on price. When they do give in though, the monthly fee could rise or there will be a reduction on options and services offered as they must try to maintain their margins. The size of location served by micro market will certainly fall with the falling investment that has to be made but the downside of a low investment will encourage the experimentation with smaller locations that could very easily fail with a market. This will always be the learning curve that operators must work through. Your entry price point and monthly fee will be the most important aspect of your entry into the field, as you know. You may not be able to predetermine what your "sweet spot" is for pricing so you may need to experiment on pricing like USAT has over the years in attempts to drive adoption. Perhaps the real question will be do you want the bulk of your pricing upfront or are you willing to be patient and get the return in monthly payments? It sounds like you have some flexibility in when you get your money back or perhaps you are afraid of pricing yourself out of the market. I think you should consider a pricing structure like you use in vending itself: get a fair price for your product so you can earn a fair return on your investment which then allows you further growth. I admire your endeavor in this field and have been waiting to see it come to fruition since you first mentioned it. I'm glad your own field testing has apparently been successful. One way you could differentiate yourself from the others could be in the reporting aspects of the software. I don't know how robust the other suppliers' software is but if you meet or exceed what they offer and still have a competitively priced product you should be able to sell it. The product also has to be attractive visually. I've seen some horrid looking kiosks come out that I would never put in a location. Make it pretty to look at, easy to use by customer and operator (coin mech and validator are a plus that some others miracuously don't offer), and affordable and you should do well with it. Good luck. Link to comment Share on other sites More sharing options...
rmorris1953 Posted October 18, 2015 Share Posted October 18, 2015 This is very useful information. One thing that hasn't been mentioned is if you already have a good account that could be in jeopardy this is a affordable opportunity. One is you may have a bank of vendors that can be sold for the upgrade Example AP 123 Glass Front $1200 - $1800 AMS Coldfood $1200 - $1800 D/N 501 E $900 - $1200 Would also allow you to set another location Link to comment Share on other sites More sharing options...
Broncho Posted October 18, 2015 Author Share Posted October 18, 2015 As the prices of kiosks, etc. come down so does the size of accounts that vendors will use them in. The kiosk offerings that remain high priced aren't doing it because their costs are staying up, it's because operators will still pay that price and because they are advertised as only for the large locations. This probably has something to do with the early adopters who are heavily invested in large location markets and therefore not brave enough to invest in smaller locations. The sellers of the high priced systems are resistant to dropping prices - it will take a few lower priced systems taking market share away before they will give in on price. When they do give in though, the monthly fee could rise or there will be a reduction on options and services offered as they must try to maintain their margins. The size of location served by micro market will certainly fall with the falling investment that has to be made but the downside of a low investment will encourage the experimentation with smaller locations that could very easily fail with a market. This will always be the learning curve that operators must work through. Your entry price point and monthly fee will be the most important aspect of your entry into the field, as you know. You may not be able to predetermine what your "sweet spot" is for pricing so you may need to experiment on pricing like USAT has over the years in attempts to drive adoption. Perhaps the real question will be do you want the bulk of your pricing upfront or are you willing to be patient and get the return in monthly payments? It sounds like you have some flexibility in when you get your money back or perhaps you are afraid of pricing yourself out of the market. I think you should consider a pricing structure like you use in vending itself: get a fair price for your product so you can earn a fair return on your investment which then allows you further growth. I admire your endeavor in this field and have been waiting to see it come to fruition since you first mentioned it. I'm glad your own field testing has apparently been successful. One way you could differentiate yourself from the others could be in the reporting aspects of the software. I don't know how robust the other suppliers' software is but if you meet or exceed what they offer and still have a competitively priced product you should be able to sell it. The product also has to be attractive visually. I've seen some horrid looking kiosks come out that I would never put in a location. Make it pretty to look at, easy to use by customer and operator (coin mech and validator are a plus that some others miracuously don't offer), and affordable and you should do well with it. Good luck. Design was something that was very important to us as well. We orginally went out and talked to a lot of differnt kiosk manufactures and though we found some good designs nothing really fit our needs and if it came close it was to expensive for our end use. So we scaully designed the kiosk ourselves from the ground up to be sturdy, sleak, but at the same time generic for branding. We also incorporated 14 gague steel throughout and powder coating to make it last. Ive seen some designs out there taht use plastic and the scres are visible from the front to remove the housing and access things like electronics and BVA. To me this is a huge security risk as once the bill acceptor is full it can range from $500-1200 easily. We are now on our 3rd generation of our kiosk and feel its jut about perfect at this point for our customers needs. We also did a few things like have a removable back plate, bottom stand and ful front in order to make upgrades fast and modular. We arent even sure what our next step will be but we are looking into large bill recyclers, plastic card payout devices, new NFC technoloys, ect... Due to the ever changing needs of most vendors we wanted the kiosk to be able to grow with them. One thing a lot of operators dont take into account is credit card fees as well. Since you brought up USATech, we tie directly to them and offer a rate of 4.6%. You wont find rates like that with the other micromarket offerings. With that being said the lowest rate Ive see in comparison is 5.9%. So lets say that a small market doing $4000/month on average, that would cost you almost an additional $50/month in credit card fees. I converted one person lately from one of the larger providers and they were paying 7.8% and had a few markets doing well over $100,000/year. As you can imagine once they crunched the numbers it was a no brainer. This is very useful information. One thing that hasn't been mentioned is if you already have a good account that could be in jeopardy this is a affordable opportunity. One is you may have a bank of vendors that can be sold for the upgrade Example AP 123 Glass Front $1200 - $1800 AMS Coldfood $1200 - $1800 D/N 501 E $900 - $1200 Would also allow you to set another location Ive seen this done numerous times now and it really helps the operator to finance the markets faser. I also see you move equipment as well and that leads me to another point. Markets are much easier to install if done right then traditional vending. For instance we sell a setup of a double cooler, freezer, 6ft of aluminum shelving with LEDS and the kiosk for $13,900.00. Nothing in that package is wider then 28" making it extreamy fast to get an install done. In fact our shelving system is only 15.5" wide and @ 6' weighs less than 150# with all the baskets installed. The whole install can be done with just furniture movers and a small dolly(non furniture type). Link to comment Share on other sites More sharing options...
Broncho Posted October 19, 2015 Author Share Posted October 19, 2015 I had one more thought on this that I forgot to mention in an early post. We have started doing a few software conversions with other kiosk manufactures where the contract is out or can be voided in some way. I have found a lot of operators seem to be keen on the idea as they are seeing with our system that a $50/month fee to us vs $200+ with higher credit card fees(ours is 4.6% flat rate) is worth the change. As a community do you see this as a possibility as well? I'm not banking on it becoming a large part of our business but if there are existing operators out there that have the hardware already in place and want to take on some sort of initial fee to get a conversion done we would be willing to develop our software to be as universal as possible. I'm hoping to get some feedback on current micro market operators on this one. Link to comment Share on other sites More sharing options...
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