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MNvending
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I wanted to ask some of the vets about the best ways to up profits. I’m really talking more from an expense perspective here. There is two ways to make more money, up sales, and cut expenses. I’m trying to find ways to cut expenses right now. Cogs is the biggest expense. What system have you used to keep product expense at a minimum without running short of product? Would you say to keep shrinkage at 10% or less? Also just in general, what are some ways you’ve found to keep expenses at a minimum? Pretty much any percentages that I can save will go directly to the bottom line, so I’d like to minimize expenses as much as possible while keeping the business running smooth at the same time. 

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Reducing your stales by being very particular about not overfilling slow items, but stocking enough of the good sellers and overall product to stretch out your service visits.  That requires good record keeping and spending time looking at it.  Cutting down on driving by making sure you are being efficient in scheduling routes, so you don't make extra trips.  Both of those goals can be made easier with a good vending management system.  I use ParLevel and really like it, but there are others out there.  But it also comes down to keeping your margins correct, and that is all about pricing.  If you have accounts that are so price sensitive you can't set the prices you need, it's time to reevaulate that account.  I would rather lose an account than constantly lose money trying to keep it.

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I have already canceled 5 locations this month.  I'm done with trying to cater to slow accounts.  If you are, like most of us, in the business to make money, then you need to focus on growing, getting good accounts, good equipment, good pricing, and good suppliers.  This will guarantee good profits as long as nothing unforseen happens.

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58 minutes ago, AngryChris said:

I have already canceled 5 locations this month.  I'm done with trying to cater to slow accounts.  If you are, like most of us, in the business to make money, then you need to focus on growing, getting good accounts, good equipment, good pricing, and good suppliers.  This will guarantee good profits as long as nothing unforseen happens.

I agree with this completely. At one point we had 120 accounts and we've reduced to 55 accounts over the last few years. The reduction meant less headaches from small accounts and the same overall gross.

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The total gross from 3 accounts (1 snack and 1 soda each) was about $4,000/year.  On all three accounts, the sales dropped because they downsized and then they started complaining about me not stocking enough or things were expiring.  It didn't matter if i explained that their sales were too low.  They all had ideas of what *I* needed to do, except to remove the machines.  Nope.  And i'll be putting a bid on an account that should gross about $10k soon.

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2 minutes ago, AngryChris said:

The total gross from 3 accounts (1 snack and 1 soda each) was about $4,000/year.  On all three accounts, the sales dropped because they downsized and then they started complaining about me not stocking enough or things were expiring.  It didn't matter if i explained that their sales were too low.  They all had ideas of what *I* needed to do, except to remove the machines.  Nope.  And i'll be putting a bid on an account that should gross about $10k soon.

Your right about slow accounts they are a cancer on your overall operations.

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I'm not started in the business yet but do you cancel the account? Maybe you should sell the account to a person just starting out (like me :-)). That would be a big help and everyone benefits from it.

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1 hour ago, MDK42 said:

I'm not started in the business yet but do you cancel the account? Maybe you should sell the account to a person just starting out (like me :-)). That would be a big help and everyone benefits from it.

My experience is that it's best to pull the machines and place them elsewhere. Any time I've sold an account I end getting calls when the new vendor is terrible.

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1 minute ago, vendcobros said:

My experience is that it's best to pull the machines and place them elsewhere. Any time I've sold an account I end getting calls when the new vendor is terrible.

Have you ever took an account from a competitor that you thought would be okay but ended being terrible? I’m in that spot right now. I took a 40 employee support center and downsized the equipment because the guy had a 5 wide snack and a Royal bottler. It was a ton of product for that account. I knew it wasn’t gonna be a slam dunk but I had a combo machine in my warehouse that I wanted to get rid of. Combo machines aren’t built to handle a ton of volume so I proposed it and they took it. It does some drink sales but the snacks are pretty much for looks. I kinda wish I would’ve left it alone actually. Live and learn I guess. That being said, how would you feel about pulling the equipment after they just made the change to my service just a few months prior?

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I typically give them 6 months before pulling after placement. I like to try and get some summer sales data when I can. Ultimately I'm there to make money. If the money isn't there then no sense in wasting your time because you feel bad.

Edited by vendcobros
Grammar
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I’ve done a couple of product overhauls and switched out entire shelfs of product, but it remains pretty weak. I’m gonna keep trying though. There is no c-stores for about 1 mile in any direction. But I think the main problem is that the ladies who work there are constantly bringing in crock pots and other stuff. I thought after the holidays it would slow down a bit but every time I go in there there’s another crock pot or home cooked meal of some sort. There’s an oven in the break room and they bring in stuff from home and cook it right there sometimes. Who’s gonna buy a bag of Cheetos when they’ve got a free crock pot of tater tot hot dish. 

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20 hours ago, MDK42 said:

I'm not started in the business yet but do you cancel the account? Maybe you should sell the account to a person just starting out (like me :-)). That would be a big help and everyone benefits from it.

At 40 people in an office, salescoukd be as low as $30/week soda and snack.  I would say $70/week is high. If you are in that range and unhappy with sales, then you need to just look for s better account or remove the snack at least.

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44 minutes ago, MNvending said:

Well it’s a combo machine. I downsized the account because my competitor had a 5 wide and a royal in there. It was way too much and I knew it. So I gave them the combo. I do think it’d be much better with just a drink machine

The whole point of having only soda is to lower service costs. 

Snacks are time consuming, and have shorter shelf lives, so it is a lot of extra cost for a smaller account.

If you throw in a 501T, with cans, you can stretch your service cycles to a month or so, saving you money.

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Hell, I've been known to stretch my cycles in slow accounts to 2 months. My goal is to have sold 66% of the capacity of the machine before I visit. So I'll fill a DN368 after 250 projected sales. However I will call the location every couple weeks and ask if there is anything wrong. Takes like 3 minutes per location and I feel is a good balance between service and cost.

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On 2/5/2018 at 2:50 PM, MDK42 said:

I'm not started in the business yet but do you cancel the account? Maybe you should sell the account to a person just starting out (like me :-)). That would be a big help and everyone benefits from it.

Why would you want an account that doesn't perform?  It only teaches you how to be unprofitable.  

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On 2/5/2018 at 4:26 PM, MNvending said:

Have you ever took an account from a competitor that you thought would be okay but ended being terrible? I’m in that spot right now. I took a 40 employee support center and downsized the equipment because the guy had a 5 wide snack and a Royal bottler. It was a ton of product for that account. I knew it wasn’t gonna be a slam dunk but I had a combo machine in my warehouse that I wanted to get rid of. Combo machines aren’t built to handle a ton of volume so I proposed it and they took it. It does some drink sales but the snacks are pretty much for looks. I kinda wish I would’ve left it alone actually. Live and learn I guess. That being said, how would you feel about pulling the equipment after they just made the change to my service just a few months prior?

Look for another account for your combo.  Collision center, repair shop, small mfg.  Then give them a week notice and pull it to the new stop.

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