taking on the competition

[kai1836]

I went to eat at a very nice chinese buffet today. I've been there several times before and there was a rack placed there the last time I was there. I was casually chatting up the rack with the manager and found out the vendor was paying them 35% comm. I offered them and am hoping I hear good news!

[nepavend]

I'm pulling for you kai!  Good move to try to step up to a big location!  You don't know if you don't ask!

[kai1836]

I didn't look after I posted but I didn't say what I offered.... I knew the current vendor was at 35 so I offered 50. I figure he'll either beat me at 55-? and make nothing or pull out and I'll get it.  I'm not sure how often he has to service but there are never any new products being offered.  The buffet is a very busy one though. I figure with the right stuff you would do a ton of business.

[nepavend]

I hope you meant 50% of net or else you will make nothing also.  Be careful! 

[nam]

kai,

Joes right. You can't pay 50% of your gross - what you take out of the machine. Was the other guy paying 35% of gross or net? Gotta watch these store owners too as they will not always tell you the truth!!! I've had them do that trying to force me into going higher thinking I'd try to beat whatever they say they are already getting. Really, they can lie more than some salesman for sure. Especially certain types of businesses and owners. They know real well the fine art of bargaining. Sometimes I go in lower just so I have room to play their game as know that is what they will do! lol

nam

[Faith Vending]

Is it possible to make any kind of $ at 50% of net or gross. Seems too high for me:shock:

[r1375]

What is a normal % to pay a location?  When I spoke with MidWest about locating a 9-way rack they mentioned a range of 15-25%. 

[nam]

Never say you have Shootin Hoops lookin for a home. Everybody will want to give them a home.

The commission you pay can vary according to the location and what you have placed there. As an example your Shootin Hoops can be placed often on charity but if on commission you could pay a way higher commission since it's all gumballs. If I could place any type of gumball machine in a real high volume location I'd think nothing of paying 30% and would go to 40% without blinking an eye. You can also do a sliding scale increasing the commission based on volume. Now when placing candy or capsules you just can't pay the same commission regardless of volume that you could on a Shootin Hoops. I'd say 25% to 30% toward the top end of the scale unless working off net. You wouldn't want to pay 40% or more off net vending candy or capsules if you expect to make much money yourself. Of course I've seen locations claiming to get 40 - 50%. The owners are either lying or they aren't making zip off that location. You could take a rack and fill the smaller machines with several flavors of gumballs and the larger machines with cheap mixes and still come out but the volume wouldn't be near as good so nobody is gonna make near as much. I think you'll better off to have a fast moving product even if you have to pay more for it than a slow moving product that's cheaper. What difference does it make if you can buy something cheap that gives you a better profit if it doesn't sell very well?

One last thought is if you get a good location and can go in for 10% commission I'd pay them more. The reason is if someone lets you in for too low a commission another person like yourself will come in behind you and maybe get you kicked out because they will offer 25 or 30%.

nam

[r1375]

Kelly,

     Yes I was finally able to pick them up.  Now I just need some time to make sure that they are all in working order.  I have been able to clean up and test out one of the Shootin Hoops machines.  Hopefully, if the weather doesn't get to bad here this Saturday it will have a home.

Nam,

     Thanks for the great info and thoughts on paying commission.  Over the next two weeks I'm planning on getting some product ordered, the machines tested and a few replacement parts ordered for those racks.  So hopefully by this time next month or early June I'll have at least one of them located.

[Jax Snacks]

Be careful getting other vendors kicked out. Some will put up a fight and some will play dirty to get back at you.

Jax

[davidsurvz]

Be careful getting other vendors kicked out. Some will put up a fight and some will play dirty to get back at you.

Jax

I have to say I agree with that one. I have heard of some really dirty stuff that competitors have done to other vendors. I won't post anything here but it can be risky if you get into it with the wrong vendor. I am not saying that you will have any problems but just be aware that some vendors don't like to be booted out and they will sometimes retaliate.

[kai1836]

Hi thanks for the concern everyone. I can understand where someone would get upset about losing an account but if there were bad feelings after the fact and he/she did try to do something it wouldn't be wise. Anyway this is one account in one town. If I really want to get as big as I say if I worried about one vendor getting upset and crazy over me taking an account I would never be able to accomplish what I want. If something happens I'll chalk it up to the cost of doing business and move on.

[Big Mike]

I have wanted to post on this subject for awhile now but have not. I have an opinion on everything just ask me. Its not always best for me to share my opinion but Ill try without causing to big of a stir. There is WAY to much info on this board. The end result is business owners (there are several on here) learning to do without vendor's, Vendor's who are not ready to move forward trying to move forward, and bad ideas getting to much traction before some people figure how bad of an idea it is. This is of course just my opinion. Dirty? I would say someone who isn't prepared to move into racks walking into one of my good locations and asking to have me kicked out so they can add a rack at 50% is dirty. If not dirty then ill informed for sure. Don't take offense. None is intended. I read posts about people trying to get locations for racks and toys and THEY DONT HAVE ANY IDEA WHAT KIND OF MACHINE OR PRODUCT TO BUY!?? This isn't good for the industry at all. I have visions of empty , dirty 1800 triples with faded stretchy pest displays in them everywhere. Far fetched? Not at all. The product vended through them is the only difference between my vision and the empty  machines sitting everywhere for real. Taking on the competition? They are on here with you reading your posts. I'm friendly with 5 other vendor's I share my area with. I bet there are 10 others I have never met. I bet there are on here too. I don't post much but I read and have helped several people with PM. To clarify this long rambling post....... LOL

1) Be a competitor but be a friendly one.

2) Be prepared for what you are going to do. Winging it will not work!!!!!

3) Be aware of who is reading your posts.

4) 95% of the people who try this business don't see it through. Don't make a big mess for those of us who did.

5) 95% of the "opportunity's" in this biz are a good way to separate you from your money.

If you need help email me. Ill help you. Don't email me to ask how many MMP to vend or where you get a cap wheel for your Vendstar. You have to have a little common sense to be in this biz.

Im ready for all the Boo's now.

 

Mike

 

[nepavend]

Mike, you got my POTD.

Your summary of points is pretty spot on the money.  Racks and other forms of vending are tough to crack for those making their first go round with them and cannot be done by winging it.  A lot of money (and time) can be wasted if you are not careful.

I really don't like competing with other vendors on commission, because someone will always inevitably come along after you and say they will give the owner 5% more to try to get you kicked out.  It is wayyyy to easy for someone to try this.

As I detailed in my post about taking a rack/sticker spot from another vendor, I pitched him on the following:

1.  I will keep the machines in working order,

2.  I will keep the machines cleaned,

3.  I will keep quality like-new or new machines here,

4.  I live right around the corner in case you need a service call.

As far as information on or not on the board, it is up to the individual to determine what they are or are not going to post.  There are always going to be "business secrets" that you will most likely keep to yourself, I know I have several.   

[kai1836]

Big Mike wrote: 

I would say someone who isn't prepared to move into racks walking into one of my good locations and asking to have me kicked out so they can add a rack at 50% is dirty. If not dirty then ill informed for sure.

 

  I didn't solicit it with the intent of being a jerk. 

[davidsurvz]

Good Post Mike!!

Good thinking....

David

[Big Mike]

kai1836 I know you didnt. Please dont take my comments as a direct response to you. Or think I was calling you dirty. It was meant to be more general. Just want all new people on here to be carful how they do things for everyones benifit.

Mike

[nam]

Competition is the american way. Doesn't matter if you're selling cars, pizza or the vending business. It's best to try and get along but that isn't always possible. I can respect someone for maybe being in an area before me but I'm not giving them free rein either. If I want to work in an area where someone else has been for years I'm going in. I will be respectful, polite, and friendly with my competitors. I've got along well enough with competitors to switch parts with one another, have lunch and get along great. Also had just the opposite! I can't imagine giving someone else exclusive rights to a town, area, type of business or specific location because they were there first. I will not go from location to location trying to undercut someone elses deals. However, if I see dirty machines, machines that are empty, or a location that I think could use another type of machine, I'm gonna try to get the account. I expect my competitors to do the same.

I've had newbies come around and offer percentages that I knew they could not do and stay in business. Also know many don't know the business well enough to provide the service the location expects and wants as well. They usually don't succeed and even if they manage to steal a location or two those locations will come back when the newbie has gone out of business or just plain screws up the account. It has always been and will continue to be as long as people want to start a business. They have to learn just as we have - even if it's the hard way.

I've also kicked out alot of old salts that have been in the business for years and manage to stay in business because they don't have competition and can't take it when it comes. I've seen alot of guys that been around for a long time only because no one better came along to kick them out. Some wouldn't know a bottle of Windex or a roll of paper towells if it hit them in the face. I would no more walk into one of my accounts without paper towells and cleaner than I would walk in without my shoes on! But I see machines sometimes that look like they've never been cleaned. I hear about vendors that don't use plastic gloves when handling the candy. Owners telling me customers have complained about such and such not using gloves! I say they deserve to loose the location and don't care how long they been there.

Those that already have a large route can afford to be less competitive as they already have built their business. The new people trying to build their business can't do it if they just say well this area belongs to someone else and this location belongs to someone else. The only way to build your business is to go out there and compete for the locations in their area.

I say competition is good and the end result will let the better competitor win, new or old. The customers and location will end up with better products and service.

nam

[davidsurvz]

So it is with any industry........ The fact is on either side of the equation there are some dirty players out there. (As it is with any industry.)

I play fair and usually it works out. Somehow the dirty players in time usually end up with all the dirt back on them.

David

[Faith Vending]

It is too bad so many people think this is an easy business. Boy are they wrong. Beware and do your homework. You got my POTD Big Mike.

Jim

[antoniocinisi]

It is too bad so many people think this is an easy business. Boy are they wrong. Beware and do your homework. You got my POTD Big Mike.

Jim

vending is not an easy business.it is easier then other businesses,but still not easy.

[joebob051977]

I may be a little naive, but I would sooner attempt to call the owner of the machine and see if he'd be willing to sell you the location or if he had some locations or machines he'd like to sell. I guess I am lazy on locating. I'd rather buy a route with machines already placed than try to fight for locations. 50% is a very high commission to give.

[lurtsman]

I agree that 50% is very high. I thought I was in a small town that wouldn't have other vendors, but it turns out there are several apparently coming from the larger city 15 miles north of here. Oh well, I'll saturate this town to the teeth. Then when they have their cheap locating company call they will find the city is dominated already and take the money and run. As long as the vendors don't hear about kickstart or midwest....

You've gotta build your route, but at 50% commission it seems wiser to pay midwest to find a location with a max commission of 20 or 25. (Rob doesn't do racks yet)

[tedk]

Mike:

I'm sorry I wasn't on when you posted that. I would have given you a POTD vote.

Ted

[vendingdelaltiplano]

What I´m offering now is the 20 or 25 %. If I´d offer more than 35 % it would mean no income for me. And if I had no income, I would never grow in the vending business.