New machine advise

[New Canadian Vendor]

Hey group, 

Thanks for allowing me in. 

I'm looking at getting our first location with my 9yr old daughter , it's a hospital that currently has 1 snack and 1 drink machine stocked by a large vending firm.  

I got into the location with a promise of better service and healther choices.

Looking at going with a brand new machine as i have no idea how to fix a used unit should issue arise and after reading post on here it seems issues are many. Shipping seems to be an costly due to weight i see that costco sells AMS & Crane machines has anyone ever dealt with Costco? 

Any other places i should look for new mahines?  As well as any other hint, tips or trick would be greatly appreciated

Father daughter team

[Southeast Treats]

Interesting that Costco has those lines in Canada.  Crane is good as is AMS.  You might try reaching out to Crane or AMS directly thru their websites, they do have sales reps and the prices may be better. 

[New Canadian Vendor]

Thanks southeast, 

I just assumed that all machines were sold through a distributor. I shall reach out to them directly this week. 

[AZVendor]

I will caution you about this venture because the likely outcome will be you having some new, slightly used, vending machines stored in your garage that you will never get your investment back from.  Hospitals are very visible accounts and you will be under close scrutiny by the management and constant selling pitches by other vendors.  Your lack of knowledge of vending will be magnified when you encounter issues with your machines, which you will.  You have no idea how to load any machine, how to best ensure positive vending of products, how to deal with coin or bill jams, how to move them, how to limit the stale snacks, where to buy products, and I can go on an on.  

You would be better off buying a couple of used can soda machines and to place them in some blue collar accounts.  This is a much better way to be indoctrinated into the vending business.

[New Canadian Vendor]

Hey AZ, 

I appreciate your line of thought, much like my own when we were awarded this account hence why we are choosing going new, my hope is to get a year maybe two of trouble fee operation, my consideration for choosing a new machine company is trouble shooting, parts and good tech support.( please reply with experiences from your company of choice) 

My ace is that i only live two minutes from site, currently this site is serviced by a company 45 miles away and maybe out of service for upto a week, if i can't figure out a jamb in that time i agree i shouldn't be in the business...lol

In terms of competition there isn't any.  We live in a community of 5000 with all vending services in schools, hospitals serviced once a week from a larger center 45 miles away.  Maybe someone in the community is willing to put out 15k- 20k for 2 new machines and go into competition with us but i doubt it and will deal with that when the time comes. For now all the hospital is asking for is a opperational machine full of product. 

I like you idea with the pop machine but our comunity is to small with no large employers to warrant the can pop machine. 

Cheers

 

 

[Southeast Treats]

good luck!  There are advantages to starting with new equipment if you can afford the investment, but it also ties up a lot of money you could be using for other things; and used machines depreciate on the market more than used cars... a good rebuilt machine, if you can locate one, could be a better financial choice.  If you can find a professional refurbisher who will give you tech support on the phone after the sale you can make it work.  New or used, have a spare validator and spare changer on hand to prevent big downtime waiting on parts...

It sounds like you are also going to be isolated from your distributors.  Have you identified where  you will be able to buy product, and will you have to go and pick it up, or will it be delivered (at what cost?)  Minimum orders, shelf life, etc.  Like AZ was trying to point out, the issues with snack machine inventory usually are the big problem for small/startup operators.  You say the location wants healthier choices, that adds another level of complexity to the mix; those products are usually more expensive, harder to source, and slower to sell.  If you end up throwing out 2/3's of your inventory when it goes out of date without selling, your profits will be non-existent.   If you buy at retail locally you may get smaller quantities, but will have problems with marking up the prices enough to cover expenses and make a profit. 

As a suggestion, maybe find a vendor elsewhere in Canada who might allow you to shadow them for a day or two and show you the ropes.  You might be surprised how much can actually be involved in the operation of a vending business, large or small. 

[New Canadian Vendor]

Hey southeast, 

We can afford the investment making only a small bank loan. I find it hard to understand when you say that vending machines depreciate faster than cars. I was on a site called "used vending" and there are folks on there selling 20year old antique machines for 1k or 1500 bucks that need work or upgrades to the bill readers or others guys selling used Antares machine for $2500 bucks a pop and they say these machine are only a step away from bottom of the barrel. 

Costco canada is selling a brand new AMS 39' combo machine, full warranty with bill reader for 7k canadian so worst case i should be able to use it for two, three  years and still sell it for $3,500. Maybe in wrong but if i hold it for ten years it will still be worth 2k. 

Good question about product i will probably just stick to costco and wall mart for gum, bars and pop.

I've thought about expiration on the healthier choices stuff and i think becsuse of it's higher price point i'll sell at cost, it will be nurses etc that wil buy that stuff once they find its the same price as where they buy it the machine will spin inventory, hoping that they may grab a juice or a pack or gum. i'm going to consider the margin of the machine as a whole vs. Item by item. Currently they have excel gum at $2.25 which you can buy at costco for about .40c . And can pop for 2 bucks which i can get for about .45c.  I realize that i will be trading dollars on five or six items but thats the only way i can see it working.

I like your idea about shadowing someone in the business but the only thing is that the vending businesses are very tight-lipped Market. Everyone is considered competition...lol

 

Father daughter team 

 

[AngryChris]

15 minutes ago, New Canadian Vendor said:

Hey southeast, 

We can afford the investment making only a small bank loan. I find it hard to understand when you say that vending machines depreciate faster than cars. I was on a site called "used vending" and there are folks on there selling 20year old antique machines for 1k or 1500 bucks that need work or upgrades to the bill readers or others guys selling used Antares machine for $2500 bucks a pop and they say these machine are only a step away from bottom of the barrel. 

Costco canada is selling a brand new AMS 39' combo machine, full warranty with bill reader for 7k canadian so worst case i should be able to use it for two, three  years and still sell it for $3,500. Maybe in wrong but if i hold it for ten years it will still be worth 2k. 

Good question about product i will probably just stick to costco and wall mart for gum, bars and pop.

I've thought about expiration on the healthier choices stuff and i think becsuse of it's higher price point i'll sell at cost, it will be nurses etc that wil buy that stuff once they find its the same price as where they buy it the machine will spin inventory, hoping that they may grab a juice or a pack or gum. i'm going to consider the margin of the machine as a whole vs. Item by item. Currently they have excel gum at $2.25 which you can buy at costco for about .40c . And can pop for 2 bucks which i can get for about .45c.  I realize that i will be trading dollars on five or six items but thats the only way i can see it working.

I like your idea about shadowing someone in the business but the only thing is that the vending businesses are very tight-lipped Market. Everyone is considered competition...lol

 

Father daughter team 

 

We are all experienced vendors here.  Your local competition isn't too fond of teaching you how to do things in fear that you'll try to go after their accounts, but the majority of us have no fear of that because there's a very high chance that you aren't in our areas.

Regarding resale value, usedvending is generally a pretty bad place to compare used machine prices.  The vast majority of us here wouldn't pay anything for antares machines, and 20+ year old machines are only worth $1,500+ when they are professionally refurbished by a reputable company.  The people that sell machines on usedvending are usually no-name people that got into the business with a few machines and want back out or, in my opinion, dishonest people looking to rip someone off.  I can go to a professional company and buy a professionally refurbished AP 122 and a refurbished Royal 650 with card readers, drop sensors, and $5 acceptance all for about $4,500.  While either machine may be 15~ years old (I am not exactly sure of the age), they have much of (if not all of) the latest technologies in new machines.  You're simply comparing apples and oranges going to a website like that to look at machine listings compared to going to a professional company.  New machines do depreciate pretty quick, but once they get to around maybe 35% of their original value, they often hold that 35% for a long time due to inflation...  A 5 year old soda machine may sell for $2,000 today even though it cost over $3,200 new.  In 10 years, depending on the condition, it might be worth $1,200 or less.  Depreciation isn't all that important though... functionality is, as long as you plan on staying in the business.

The only thing I will warn you about is that you may have trouble selling some "healthy" items.  If your margins are good enough, you will hopefully turn a profit but having one snack machine is incredibly difficult unless the sales are excellent.  Hopefully, your ventures work out.  AMS, Crane, and USI are the top vending machine manufacturers today for snack machines.  Royal has made quality soda machines for a long time and Vendo makes an excellent model known as the v21 series, but I recommend avoiding anything older than that but not because they aren't good.

[New Canadian Vendor]

I don't know you sir but i like you...lol.

What you said about the used vending is the exact feeling i got. 

I shall look a little more and see what i can find, shipping is huge and the unkown even a bigger risk, if i can find somewhere that gives garanteed tech support i would consider used. 

My father always said we don't have enough money to be cheap. You always get what you pay for sometimes even less. 

A paper route is alot of work this venture is more about showing responsibility doing a math lesson for pofit and loss and creating some work ethic, if an  opportunity in the future presents itself we may look at a second location.

Thanks again 

[orsd]

1 hour ago, New Canadian Vendor said:

I don't know you sir but i like you...lol.

What you said about the used vending is the exact feeling i got. 

I shall look a little more and see what i can find, shipping is huge and the unkown even a bigger risk, if i can find somewhere that gives garanteed tech support i would consider used. 

My father always said we don't have enough money to be cheap. You always get what you pay for sometimes even less. 

A paper route is alot of work this venture is more about showing responsibility doing a math lesson for pofit and loss and creating some work ethic, if an  opportunity in the future presents itself we may look at a second location.

Thanks again 

Because you are pretty new and not mechanically inclined, you should go to your local vending refurbisher, and get a get a professionally rebuilt unit with warranty and tech support, about 1200 for a basic unit up to 2000 for a newer one.

With vending, condition is a lot more important than age, as vendors are built to last, unlike consumer electronics.

 

 

[AngryChris]

3 minutes ago, orsd said:

Because you are pretty new and not mechanically inclined, you should go to your local vending refurbisher, and get a get a professionally rebuilt unit with warranty and tech support, about 1200 for a basic unit up to 2000 for a newer one.

With vending, condition is a lot more important than age, as vendors are built to last, unlike consumer electronics.

 

 

Or the electronics on vending machines lol.

I like his dad's quote about not being able to afford cheap.  It's just difficult to determine what "cheap" is unless you know what you're doing.  Cheap doesn't always mean poor quality, and expensive doesn't always mean good quality.  It's all about doing your due diligence to learn as much as you can to compare prices.  I have been remodeling a fixer-upper for years and I do it because it's cheaper, but the quality is good.

[orsd]

3 minutes ago, AngryChris said:

Or the electronics on vending machines lol.

I like his dad's quote about not being able to afford cheap.  It's just difficult to determine what "cheap" is unless you know what you're doing.  Cheap doesn't always mean poor quality, and expensive doesn't always mean good quality.

Agreed.

Except for the part about vendor electronics. I have rarely seen a piece of Chinese crap last 20+ years, but I have seen plenty of 20 year old 501E and AP 7600 boards.

[AngryChris]

Of course, but I was mostly referring to coin mechs and validators... you know, the common parts.  I still have AP 7600's out there with boards in them that have stickers from the mid/late 90's when they were probably repaired last.

[BlindVending]

Call brokerhouse distributors in Toronto. They are your local distributor. Don't buy from Costco. Talk to Roy at brokerhouse. 

This new account. Is it in Woodstock by any chance? If it is - give me a pm.