Jump to content

How to handle site that wants to subsidize


Phxguy520

Recommended Posts

I have a small vending company and I have a site that wants to subsidize some of the cost to keep the prices down for their employees. Curious if anyone has any advice on how to approach this? Was thinking of just sending my price list and letting them tell me what price do they want for each item. Then track how much of each item is sold each week and then sending them an invoice. Are there any other approaches?

Thanks in advance! 

 

Link to comment
Share on other sites

Tell them what your prices are without subsidy and then let them decide how much they will pay of each vend.  You can invoice them for each item at the agreed subsidy so be prepared to keep track each time of what has sold when you service the machines.  Then invoice them on the spot and follow up with an emailed invoice.  Don't let them get behind because I've seen this backfire.

Link to comment
Share on other sites

2 hours ago, Phxguy520 said:

I have a small vending company and I have a site that wants to subsidize some of the cost to keep the prices down for their employees. Curious if anyone has any advice on how to approach this? Was thinking of just sending my price list and letting them tell me what price do they want for each item. Then track how much of each item is sold each week and then sending them an invoice. Are there any other approaches?

Thanks in advance! 

 

This sounds like a time consuming PITA to me unless this is a very lucrative account.  The easier way to do it is show your account exactly what the monthly gross is and let them decide how much of that they want to subsidize.  I'd collect this amount for three months up front to avoid the pitfall the AZ described.  Make them aware, that should sales increase, the subsidy will also increase by the appropriate amount and if sales should take off immediately, don't push it - you're still making more than you did even at the new discounted price point.  The downside is, either way, it's still going to cost you some time but the upside is that you may make a lot more money - some people just can't pass up a discount especially if they see their fellow employees getting it. 

Link to comment
Share on other sites

I have seen it all done as mentioned already, but how about selling things just above cost (maybe 10cents) and charge them a flat rate for labor each month?  Say... $60/month? $100/month?  This way, they are merely renting your service.  Your rental rate should cover all potential missed profits and allow employees to purchase at low costs without having to count everything.  Plus, the customer knows what the rate is every month.  If you came in once every 2 weeks, you would still cover enough for cogs (and most repairs and few other costs) and still profit.  All you have to do is make sure nothing is expired.  

Now that i think about it, it sounds genius lol.

Link to comment
Share on other sites

I have not had a subsidy account, but some things to think about:

- Don't forget sales tax in your calculations

- be sure that you and the company understand how long your current prices are good/ guaranteed, and when you might raise prices (i.e., price list you provide has an expiration date clearly stated; or prices may be reset at a certain time or interval).

If you use a VMS like ParLevel, it has the ability to track and invoice subsidies.  I have not had to use it so not sure how it is set up.  If you are not already using an online management program that is a big jump in itself.  There are already some good suggestions on how to set up a manual system...

Link to comment
Share on other sites

I have one subsidized account. As others have mentioned here, I simply charge a flat rate of .75 per vend and price each item at .75 below retail.

I run CC readers with back end software so it's dead simple to make up a sales report at the end of each month and attach it to the subsidy invoice.

This works great for everyone and I'm sure we're getting a decent sales bump due to the low prices..

Link to comment
Share on other sites

You will always get a huge sales increase with subsidized pricing because you will be selling a below market pricing.  People will buy just to take it home to their family.  Be prepared to service subsidized accounts more often.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...