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Raising prices.


allen watson
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I’m in the process of raising my candy from $1 to $1.25. Not getting any negative feedback on it so far. 

My 1oz chips (SS) are .60

1.25oz (LSS) chips are .85

cookies .85

danishes (sams club) 1.25

12oz cans .75

16.9 oz bottles 1.00

20 Gatorade 1.50

Monster 2.25

Im in a sparsely populated area with only Canteen as competition. They seem to only be at Hospitals, Court House and a couple other locations  Their prices are crazy high to me but maybe mine are just too low? Any thoughts would be appreciated.

 

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I like $.75 because the coin mech never runs out at most locations.  85 cents will run you out of nickels at a minimum, if not nickels and dimes, but that extra 10 cents will be a massive increase in your pocketbook.  If you can get away with it, and if you think it's fair, do it.  Around here, 85 cents as a base price is high.  No one is above 75 cents on cans.  My highest on candy is $1.10 but i think $1.25 is fair.  However, competition keeps candy prices low.  I have customers that think 90 cents is too much for a candy bar.

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Hey Chris. 

Around here there are a lot of single price machines owned and operated by the people that own the businesses. They are all charging $1 a can. Coke is charging $1.25 a can and the hotels are charging $1.50 a can. It’s crazy. 

Sometimes I think about just matching the high prices of Canteen and letting the chips fall where they may. They don’t seem to be loosing any accounts except the few that I got from them. Although the ones that I did get from them where only because of their poor service, not high prices. 

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5 hours ago, allen watson said:

I’m in the process of raising my candy from $1 to $1.25. Not getting any negative feedback on it so far. 

My 1oz chips (SS) are .60

1.25oz (LSS) chips are .85

cookies .85

danishes (sams club) 1.25

12oz cans .75

16.9 oz bottles 1.00

20 Gatorade 1.50

Monster 2.25

Im in a sparsely populated area with only Canteen as competition. They seem to only be at Hospitals, Court House and a couple other locations  Their prices are crazy high to me but maybe mine are just too low? Any thoughts would be appreciated.

 

For years we had .80-.85 on candy but the cost of candy has gone up so much over the years.  We are $1-$1.25 on candy now depending on the account and we try to not have too many rows of candy because even at those prices the margins aren't great. 

I think you can easily increase your chips to .65 for SS and $1 for LSS.  Our prices are similar to yours if not a tad bit lower here and there but we have almost all of our snack machines at .65 and $1 on our chips.  After your chips, the next thing you could possible increase imo is your 16.9 oz bottles to 1.25. 

When you say "cookies" I assume you mean crackers like Toast Chee and Nekot?  If so, that is pretty strong.  I mean if they are selling at that price for you then keep it there but we have ours anywhere from .5 to .65 mostly.  Our normal is .60 or .65 but we also have a handful of machines out there with .50 on crackers.  In a lot of those accounts, they get 2 crackers for $1.  The crackers only cost us .14-.17 cents so even at .50, they are still one of our better profit items.

 

I think the next thing we plan on doing is trying to increase our cake prices.  We have 1.00 on almost all of our machines (some machines we have .90 or .85).  We try and keep cheaper cakes/pastries in those slots like Honey Buns, pop tarts, moon pies, and sugar wafers.  Those items for us are in the .32-.38 cost range.  Its some of the other pastries that cost a bunch that we try and avoid or limit.  

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I am pretty in line with you right now, I get .75 for the 1 oz chips, and planning to raise candy and canned drinks same as you.  I think .85 a can is still ahead of anyone else selling cans in my part of Florida, and I don't see any retail candy under $1 anymore, MSRP on most small candy bars is 1.29 (plus tax); so I think 1.25 with tax is fair.  I'm at 2.50 on monsters. 

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9 hours ago, allen watson said:

I’m in the process of raising my candy from $1 to $1.25. Not getting any negative feedback on it so far. 

My 1oz chips (SS) are .60

1.25oz (LSS) chips are .85

cookies .85

danishes (sams club) 1.25

12oz cans .75

16.9 oz bottles 1.00

20 Gatorade 1.50

Monster 2.25

Im in a sparsely populated area with only Canteen as competition. They seem to only be at Hospitals, Court House and a couple other locations  Their prices are crazy high to me but maybe mine are just too low? Any thoughts would be appreciated.

 

Those prices are very low to me haha. I am in the Boston area.

We do $1 on small bag chips 

$1.25 LSS chips 

$1.25 candy 

$1 pastry 

$1 can soda

$1.50 20 oz soda 

$1.75 20 oz gatorade 

Thats pretty much standard pricing for my area 

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4 hours ago, allen watson said:

Thanks for the response. The cookies are the small bags of M&M, Knotts, famous Amos and the Grandmas 2.5 oz. 

Oh...Gotcha...

We have our M&M Cookies and Famous Amos at .75 for the most part...

 

 

We have most of our cans at .60 or .65.  Some at .75 and one or two at $1.00.  I'd love to go to .75 on our cans at a minimum but there are so many accounts that we see where Coca Cola is at .50 for cans...

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3 minutes ago, CapitalCityVendingLLC said:

Oh...Gotcha...

We have our M&M Cookies and Famous Amos at .75 for the most part...

 

 

We have most of our cans at .60 or .65.  Some at .75 and one or two at $1.00.  I'd love to go to .75 on our cans at a minimum but there are so many accounts that we see where Coca Cola is at .50 for cans...

That’s so strange that Coca Cola is at .50 where you are and $1.25 here. 

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47 minutes ago, allen watson said:

That’s so strange that Coca Cola is at .50 where you are and $1.25 here. 

I bet that's either a really old vending company that has terrible service and/or is afraid of raising prices as to not rock-the-boat or it's a rookie vendor that does things sort of as a hobby.  There is a notorious vendor around here that has some of the most ridiculously low-priced items out there.  Literally, as of less than 5 years ago, this vendor was selling candy bars for 50 cents at one location back when candy, around here, was averaging about 53 cents per unit from sam's and that was the CHEAPEST I knew of.  They also sold (at this same specific location) cans for 50 cents, 20 oz bottles for $1.00, chips for 50 cents, and even had a FOOD machine in a break room for a company of LESS THAN 20 PEOPLE!!  That's a snack machine, a can machine, a soda machine AND a food machine.. and this was a pretty well-known established company doing this.  They also had a reputation for having a LOT of outdated equipment.  These guys apparently tried to make things work with volume but they never win good accounts.  They just keep their accounts by continuing to offer insanely low prices.

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Every new account we put on has cans priced at $1.00, 20oz at $1.50.  We are in the process of converting all of our snack machines to $1.00 for all items (except pastry - $1.25).  We are eliminating 1oz SS bags and going solely with LSS for chips.  There has been little to no resistance from the customers.  Most people understand that pricing has gone up.  There is nothing wrong with carrying prices close to the C-stores.  One advantage that we off that the C-stare doesn't? We deliver the product to the customer, so asking comparable prices is fair.  The big vendors have higher prices because they know the market will pay it.  Besides, it is always better to be a leader in pricing and go to a little higher price before your competition does.  If you can establish the higher price, you will be able to absorb a future cost increase from the manufacturers, while your competition is scrambling to raise prices everywhere because now they have to.  I've picked up several new accounts because vendors wait to the last minute to raise prices, surprise the customer and piss them off, and then the customer shops around for a new vendor; even if the new vendor is at the higher pricing, they'll switch because the old vendor handled the price increase poorly.  We always give our accounts WAY advanced notice that a price increase is coming so that there are no surprises.

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Thanks everyone for your input on this. I don’t know why I struggle with price increases so much. I stay up late at night doing the math over and over again. I work hard on my route keeping the machines clean, filled and working properly.

Then I come across some beat up old machine at a great location with super high prices and half the selections empty. It really makes me think that low prices are what’s holding me back from growing and adding new locations with newer machines.  

I often come across some great locations with hundreds of employees and think about how much it would cost to move into. Without a bunch of money in the bank I have to just move on and settle for the smaller locations that only require a snack and a drink machine. 

My route mainly consists of snack/drink machine locations with 100 employees or less. A few with 2/300 employees. And a handful of hotels. I’m at 50 snack and 56 drink machines. No employees. Work from home (no warehouse or commercial property). 

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Allen, I originally made a longer post but I decided to sum it up real quick and get to the point.  The mega big-dog company you refer to probably doesn't care if you take accounts that do $100/week.  I'm pretty confident you would be happy if all of your accounts averaged $100/week in sales, so I would also assume that you would be happy with such accounts.  Don't stress over price increases.  I have been there and I have spent many nights wondering how far that extra $0.10 will go in the long run and I can confidently tell you that it goes a LONG way, even with the initial hit on sales.  What I did was I staggered price increases over the summer.. so I might raise 3 accounts one week, 3 more 2 weeks later, and so on... that way if anyone decided they wanted to part ways, I wouldn't have to pick up more machines than I could handle.  I can only recall losing ONE account due to a price increase, and they weren't even worth keeping in the first place.  I offered them the price increase in order to keep MY service.  They felt like $1.25 for a 20 oz soda was already too expensive and I would be surprised if they have any vending there now.

I think you are in a great position in terms of competition.  There isn't much room for other vendors and you can nip at the big-dog's ankles all day and they probably won't bite back much.  Just don't start a war and don't get involved in something that you don't think you want to do, like if you don't feel comfortable with micro markets and such... if you see that account with the potential to do $150/week and their equipment is crappy and service is obviously not great, give them a bid!  Tell them you can do a better job and provide better equipment and they won't even have to think about vending services or vending prices with you in there because you'll make sure the machines are clean, filled, and working.  You know what, I feel like with what I just told you, I might be able to go out there and sell my services too! lol.  Seriously... the ONLY thing holding me back from going out there and getting more locations is that I am afraid of the rejection.. and I think I have only been rejected from a couple accounts that I ever tried to get.  I don't know why I am so scared.  I think it's time for me to get out there and get some good accounts!

Keep the prices where they should be and sell yourself on service.  There's nothing wrong with going 5 cents or even 10 cents cheaper than the competition if you still make good margins in the end, but there's also nothing wrong with matching prices and just eating the price increases for a couple years while the equipment gets paid for!

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I agree with Flintflash and AngryChris, and I’d also add that you should be at the very least, be matching the prices of what C-store is closest to that machine. If an item is cheaper at the C-store some might consider going to the C-store versus using the machine, but if your cheaper than the C-store, you’re cutting yourself short. By matching the prices they will use which ever is most convenient for them at the moment. Most wont bother wasting the gas or time. 

We are more convenient than the convenient store, (unless their needing something we’re not carrying, ie gas, cigs, beer lol), we bring items to places that people are at. We are convenient stores.

 

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