What percentage is your Biggest Account?

[CapitalCityVendingLLC]

Hey,

Looked for a similar thread but couldn't find much.  

I was just wondering how big your biggest account is?  I don't necessarily mean how big in dollar amount but % of your company.  I think one of the many pro's of vending is having your eggs in many baskets.  You can, if you want, decide to not be too dependent on any one account.  That being said, one of my goals this upcoming year is landing a "big account".  Not to become dependent on it, but to have one account that can really push my business over the edge.  

For example, my biggest account is just over 6% of my total revenue for the year.  I actually have 3 accounts that hover around this same mark, and then the other accounts slowly go down from there.  So you could also say, my biggest 3 accounts are about 18% of my total.  My company is also lucky because almost all of my accounts are not linked to one another meaning there is almost no way I could lose multiple accounts at once.  As I said earlier, I love this because if I ever lose my "biggest/best account", my company is still just fine.  Yes losing a big account is a bummer but I wouldn't lose a whole bunch of sleep at night.  I didn't know if this number is about average compared to ya'll.  I assume this 6% is low for some of ya'll but I could be wrong.  

As I said, this coming year I would like to land an account that could potentially be 10-20% of my total business.  I think every business debates when is it time to go after a big game changing account and I think I've gotten to the point where I'm ready for it.

I look forward to see what % of your company is tied to your "biggest account".

[Southeast Treats]

At one time I had an account that was about 20% of my total business.  It was a government location and I eventually lost it to a disabled operator (federal funding brownie points for the location).  I picked up another small operators route to make up the gross but added a lot of expense in the process.  It's great to have those large accounts but you are correct, you need a strong base of accounts to keep your business stable; especially if you have ongoing overhead like leased facilities or payroll.  It sounds like you have your base, so don't be afraid to go for the bigger locations!

[Southeast Treats]

By the way, it's all relative anyway - the more big accounts you have the smaller the percentage of your total each one will represent!

[AZVendor]

You are in a very good position, safety wise, for just the reasons you mentioned.  This is typical of small vendors that get locations one at a time as they slowly grow.  What you're desiring to do now will do just the opposite of what you have which is put more of your eggs into singular baskets.  Once you have a very solid and diverse account base then you should not fear going after larger accounts or those with multiple locations.  Just protect yourself with contracts and then perform up to the level of those contracts.  If you have gained enough experience and are totally comfortable with the vending you do now then you will do fine with larger accounts.

You will surely have to do something new for those large accounts so be prepared to venture into new areas of vending - maybe even micro markets if you're truly adventurous.   Keep in mind that those larger accounts will require large investments at one time so you have to know how you'll pay for it all.  Using contracts will help protect your investments.

As to your original question, after I had been vending for 5 years and had moved into it full time with 60 or so machines out I was ambitious and bid on a large federal contract whose bid was offered to me.  I won the contract and made no money on it for the next 3 years as I paid for the equipment, paid for larger warehouse space, paid for a new route truck and a new employee.  What it did for me was give me substantial cash flow and access to other source such as the local bottlers who shunned me before.  This led me to other large accounts as well and we grew exponentially over the next three to four years ending up with three full time routes and doing $1M per year (back in the 90's).  It was a tough pill to swallow at first but it was an exciting time as well as we grew.  I would say that the first large contract became 90% of our business but as we grew it was a smaller and smaller part.

Those accounts don't come along very often anymore but grab what you can and don't be afraid to do it.  Just remember the caveat that "It takes money to make money."

[CapitalCityVendingLLC]

Yea,

As far as something new coming up, I think contracts will be the biggest thing.  Believe it or not, we don't have a single binding contract as of now. (We have one semi contract that is just a piece of paper saying we'll pay a 10% commission every quarter)  We have gotten and kept each account with the system of saying "the day we start giving you bad service, kick us out".  We like this because it lets us pull out if/when the sales aren't suffice.  We also like it because it keeps us motivated to keep our standard high.  It has worked too.  I know we are in jeopardy of losing an account at any point in time but it has worked 99% of the time.  The only account we have lost due to "not having a contract" was a very small college that was about 3% of our revenue at the time.  It was kind of out of our mileage range anyways so that particular account we weren't too upset over.  All that being said, I realize that if we did land a big/huge account, a contract would be much more important.  

I think coming up with $ for the initial capital investment wouldn't be too big of a problem.  We also have some machines here and there in accounts that need to be pulled anyways so if we did land a huge account we could grab a machine or two from those accounts.  That could potentially limit the initial investment.  

Another thing I love about my business is that the shortest turn around time that I have to go to any one account is about a week, and it can be stretched to 1.5 weeks if need be.(our average turn around time is 2-3 weeks)  I love this because I like to go out of town from time to time.  I can go on vacation for a week at a time and be fine.  One thing with taking on a huge singular account might be that I have to religiously go back and fill the account every 2-3 days.  I'm sure I would adapt, and it would be an obvious awesome problem to have, but I imagine it would be inconvenient when it came time to go on a week long vacation.  I'm sure I could find ways around that, and if that ends up being my biggest gripe then I think I'll be fine.  

[brendio]

My biggest account was 30% across two locations. Lost it at the start of the year, and biggest would be maybe 10%. I have one single machine that is doing almost 20% of my weekly sales (from a total of 30 machines), but it is seasonal and the season will be ending soon (it's good while it lasts and hoping for bumper crops to extend the season a bit). I'm a lot more diversified than I was a year ago, which is nice, because losing that account was painful.

[putrevus]

My biggest account was 30% across two locations. Lost it at the start of the year, and biggest would be maybe 10%. I have one single machine that is doing almost 20% of my weekly sales (from a total of 30 machines), but it is seasonal and the season will be ending soon (it's good while it lasts and hoping for bumper crops to extend the season a bit). I'm a lot more diversified than I was a year ago, which is nice, because losing that account was painful.

Sorry to hear losing your account. Did they give any reason.

I am also in a dilemma, I have an account which I have been working for six months, They have agreed to my proposal for three years.We are waiting for swap date.they have 8 machines now which are fine , I am not going upgrade any of them .

It will be huge risk if they ask me to leave before 4 years.


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[brendio]

4 hours ago, putrevus said:

Sorry to hear losing your account. Did they give any reason.

They were very clear about, but said they wanted newer machines and more variety, but hadn't spoken to me about that before the decision was made. The decision was made by head office, rather than the social clubs on the sites that I was dealing with. I took my machines out in January, and I have heard on the grapevine that they are looking to change vendors again. Seems they are looking for a "national" contract for all of their sites, including some 200 miles away. A site finding mob is in negotiations with them and asked if I service the area. I'm in two minds about whether I would go back in. It was a pain in the rear (far away, dusty environment, low prices), but two of the machines did really well. Oh, they brought in a no energy drink sales on site policy too. which cut down sales (but didn't stop employees drinking them, as I saw empty cans in the bins).