google.com, pub-6262331124919164, DIRECT, f08c47fec0942fa0 Jump to content
Two Rivers

New Candy Honor Box Biz

Recommended Posts

Greetings all,

My wife and I chose to jump into the deep end of the pool with candy honor boxes.  After having watched Youtube videos all summer and doing research in other ways, including here at Vendiscuss, we bought 50 pink ribbon honor boxes from Sheridan Systems.  They arrived on August 31.  We are lucky enough to live in one of the fastest growing suburbs in the United states just outside a large Midwestern city.  Our community is currently around 20,000 and expected to grow to 60,000 over the next decade.  The Urban area is approximately 600,000.  We literally have strip malls popping up all around us.

So, couldn't decide whether to use the Sheridan locator for $14 per box or not, but really wanted to give locating a try myself.  I'd had some experience 25 years ago with door to door sales, having worked for Schwann's Incorporated as a route salesman for two years.  Glad I didn't spend the money on the locator service, I ended up locating 42 boxes over the course of four evenings and a total of seven hours of locating time.  The boxes basically locate themselves.  I received a Yes from 2/3 of the businesses I approached.  A "yes" or "no" is usually forthcoming within the first 30-60 seconds of the conversation.  I keep the sales pitch short and to the point.  

"Hello, I'm so and so and I own Two Rivers Snacks.  We are a vending business and we partner with Candy for a Cause.  We place honor boxes in businesses and a portion of the proceeds support breast cancer research.  Your customers or employees simply put some money in the box and take out a few pieces of candy.  We'll stop by every week or two, depending on demand, to exchange boxes."  I almost always get an immediate response.  A few have further questions about how the charity portion works, but not many.

Today marks day 17 since placing our first boxes and we have now made one collection from each and every box placed.  I have placed a total 48 locations, lost 4 locations, and pulled one location for theft.  Boxes averaged being out 10 days upon first collection.  Our total revenue so far is $344.  After the first collection, we are on track to gross an average of $24 per month per box.  Given our research and our projections, we figure we will end up pocketing about $6 per box after the costs of doing business and our donations to charity.

Here is a rough estimate of our expectations:

Out of every dollar sold:

.07 for State and Local Sales Tax

.30 for the Cost of Goods (COGS)

.06 theft (20% theft)

.02 Gas

.03 box depreciation (considering a box will last us one year, have no clue whether that is the case)

.04 donation to Sheridan/Candy for a Cause

.07 donation to local charity (a choice on our part, we realize)

.16 Personal Income/Self-Employment tax

Yeah!  Here we get to the good part

.25 per box PROFIT.  Yep, that's right.  If we do this business "honestly", pay our taxes, consider our costs, and make what we consider to be an appropriate donation; we get to keep 25 cents on the dollar.

I think this is important to note because I believe that a lot of people might be watching youtube videos and seeing loads of cash being emptied out of boxes and not taking into consideration what running a business the right way really means.  

Now, to the bad part.  We were hoping for/anticipating/expecting 20% theft on goods sold.  Through our first round of collections, we have actually experienced 32% theft.  Out of the 48 locations, we can say a good portion of the theft has come from 5-6 locations, one of which I pulled after finding almost all theft.  Yep, 87 pieces of candy missing from the box (should've meant $29 in revenue) and only $5.50 in the box after 10 days.  Went back a second time after 4 days and found 28 pieced of candy missing ($7) and only $1.50 in the box.  It was a national auto repair chain.  I explained the situation to the assistant manager and stated I would be back during the week to offer a bulk vending machine.  

I guess we've been a bit surprised by the theft and appreciate any suggestions.  We are running a variety of boxes.  Boxes filled with 60 pieces of Mars candy and 18 pops, boxes filled with 70 pieces of dove/hershey candy and 28 pops, boxes with 45 York mints and 28 pops, boxes with 63 pops (only a few).  

Sorry to be long-winded on my first post, but this is exactly the kind of information I enjoyed reading and learning about throughout the summer on this forum.  Looking forward to getting the theft under control, earning some money, and turning this income stream into even more profitable and passive revenue streams including bulk and bubblegum.  

 

Share this post


Link to post
Share on other sites

Welcome, man. Your math is wrong in two main places:

1) You don't pay tax on every dollar sold; you pay taxes on every dollar of profit. That is a huge difference. Imagine a grocery store like Kroger or Publix that sells a ton; they'd all be in the red if they paid taxes on total sales and not on revenues (aka profits). Their actual profits are often 5% or much less of their total sales. 

Use your deductions. If you spent a lot on boxes, labels, candy, track mileage, computer software, shelves for candy, etc etc and just started this... then your profits and therefore your taxes should probably be $0 on your charity box biz for the year 2019. Talk to an accountant if you need to, but it's very simple stuff.

2) Having 20% theft is 0.20 per dollar... not sure where you get 0.06?

Theft on charity junk candy boxes in lobby areas as you are doing will be highly variable... they have different customers every day. Don't be so quick to pull them; you are freaking out for no reason (common new honor box mistake). If there is a trend of unacceptable theft and/or very low sales, then pull... but don't talk to the manager or leave notes. That is pointless; you are not paying them to watch the box and it is mostly random ppl and not employees taking and paying for the charity junk candy.

Theft on honor boxes in break room should be only slightly variable... mostly same employees. In those cases, you can talk to the manager/contact... and have a quick hook to pull boxes.

...personally, I do honor snack boxes, but it looks something like this per 100c dollar that goes into the box: 20c theft, 35c food cost, so leaving 45c profit (GPM = gross profit margin). My net profit margin (NPM) then has to subtract maybe 5c gas/car mileage and 5c supplies (boxes, marketing flyers, biz cards, loyalty gifts for locations, etc)... which leaves me 35c net. I probably would then owe about 2c taxes (I'm only taxed on the net of 35c... but I can pay nothing if I put that somehow back into my biz, like buying a lot of candy or boxes in December). You only pay tax on profits, get it? GL

Edited by FlyGuy

Share this post


Link to post
Share on other sites
7 hours ago, FlyGuy said:

Welcome, man. Your math is wrong in two main places:

1) You don't pay tax on every dollar sold; you pay taxes on every dollar of profit.

He said local and state sales tax.  If he does really mean sales tax and not income tax, depending on the local municipal taxation laws, then he very well could be paying 7% on gross sales since that's usually how sales tax works.  If it's income tax though, then you are right.. it's based off of profit.

Share this post


Link to post
Share on other sites

I don't have time to look it all over, but I agree that much of the numbers seem way off.

For example, your depreciation is 3 cents.  By that math, if you sold 33 items out of one box, your box would have completely lost its value and would need to be replaced.  That is absolutely absurd.  Realistically, I would GUESS that the average box can easily sell well over 1,000 items before it needs to be replaced, which would make deprecation something more like $0.001 or 1/10th of a penny for every dollar.  In other words, wear-and-tear on the boxes is nominal and shouldn't even be factored.

As flyguy mentioned, .06 = 6% and 20% = .20, so I don't even know how you go those numbers.

When it comes to sales tax, it depends entirely on your local laws.  In Ohio, sales tax is based off of taxable sales which include beverages and many other things but not "food" (which means snacks are non-taxable).  That is SALES tax I am referring to.

As for local, state, and federal INCOME taxes, those are accounted for AFTER expenses are deducted.

You honestly have too many numbers and not enough context to make it clear to understand exactly what you are saying.  For example, when discussing the breakdown of every DOLLAR collected, you conclude that you net 25 cents of every BOX.  That, alone, is confusing.  Did you mean dollar?

Also, you say you make $6 from every box.  That information is entirely useless without a frequency.  If I made $20 profit from a vending machine, that might not sound so bad, but if I serviced the machine every 6 months, you would realize that $20 probably isn't so good.  If I made $20 every week, then it's better.  If I make $20 in 1 hour, that's not ideal.  If I make $20 in 20 minutes, then that's great!!

Full-line, bulk, and honor boxes are all about volume.  It doesn't matter if you have 1 good location or a lot of small locations.  The key is to have a lot of volume overall.  You don't use the same amount of gas at every stop.  You don't experience wear-and-tear the same on every box.  Numbers don't really show the full story until you have a much larger scale.  For example, when I started my full-line business, I was averaging something around 18% operating profit for a long time.  Now, it is anywhere from 26% to 35%.  The main reasons for that are that I have a lot more density in my route (less distance between stops), a lot more sales in general which allows me to buy the specific products I need and not have variety packs with products I don't need, and better rotation of products via software.

I'm sorry but you do not seem to have a very good grasp on the costs associated with your business.  There's a good chance that you have miscalculated and/or misunderstood so many things regarding costs.  I can believe that you aren't making a lot of profit right now, but there are ways to fix that.  The whole magic with operating a business is that you have the controlling power to make things happen.

  • Like 1

Share this post


Link to post
Share on other sites

Ok...let's simplify this a bit.  FIRST: you CAN NOT look at your costs and expenses based on individual items.  That is LUDICROUS!   You need to establish your route and then look at the average of the entire route.  You said you had placed 48 boxes and serviced them all after 10 days.  So look at what the TOTAL sales amounts collected and divide by 48 to get your average box sales.  You then do the same with the COGS (cost of goods sold), which is the COST of inventory sold.  This is based on your BOX COST (what it cost to fill your box) times the % used.  I have all the formulas if anyone needs them.  Your EXPENSES are ALSO based on the MONTH, NOT per item.  You are NOT going to burn more gas in your car selling more items.  Your insurance is NOT going to increase based on selling more items.  Your vehicle payment is NOT going to increase based on selling more items.  See the pattern here?  Your expenses are FIXED meaning your gas bill will be that amount regardless of whether your customers buy only 1 item or a 100 items.  Same with every other expense.  Sales tax will be dictated by total GROSS sales and income/corporate taxes based on your profits.  Do not waste your time trying to figure "per item" costs, because it serves no purpose and is meaningless.  ONLY businesses that bid out individual jobs or products can ever really calculate the cost of individual expenses in their product.  LARGE corporations may be able ESTIMATE it based on YEARS of data and averages, but even McDonald's will have the same electric bill and rent payment whether they sell 100 Big Macs or 1000 Big Macs.  SECOND: you need to know WHAT information you are looking at and HOW it is applied to run your business.  Box Averages let you know HOW your route is running overall, and HOW your inventory selection is working.  SHORTAGE % let's you know how an account is doing individually AND in comparison to other accounts.  Both of these relate to accounts performance AND sales.  Expenses are monthly and relate to the performance of your business overall.  NEVER break it down by account OR ITEM.  Example:  you could have 10 accounts that produce $100/month each or 100 accounts that produce $10/month each, but you will STILL have the same $300 vehicle payment coming out of the $1000/month you collected.  Based on your calculations, one vendor can plan on snack trays costing $30/month in vehicle expenses  and the other vendor's snack trays costing only $3/month in vehicle expenses.  Have your accountant give you MONTHLY Balance Sheets and Profit and Loss Statements.  This is the correct way to track your business, NOT by per item figures.  Just my 2 cents!  :)

Share this post


Link to post
Share on other sites
On ‎9‎/‎25‎/‎2019 at 12:37 AM, AngryChris said:

He said local and state sales tax.  If he does really mean sales tax and not income tax, depending on the local municipal taxation laws, then he very well could be paying 7% on gross sales since that's usually how sales tax works.  If it's income tax though, then you are right.. it's based off of profit.

Yeah, good point. I guess it is good to be in a place where necessities and grocery including candy/snacks are largely not taxed with sales tax. I assumed most states were that way (at least no sales tax when you buy the snacks, most also not having sales tax when you sell them)...  but yeah, if it is a place that's not exempt, ouch and track/pay accordingly.

https://www.legislature.mi.gov/documents/1999-2000/billanalysis/Senate/htm/1999-SFA-1237-A.htm

Edited by FlyGuy

Share this post


Link to post
Share on other sites

FlyGuy:  Does your State require you to pay sales tax?  I'm in Iowa, unfortunately, Iowa has a 6% Statewide sales tax which includes candy/pop and local communities can add a 1% local option sales tax (most have).  I purchase tax free from Sams, but then have to pay between 6-7% on each dollar collected based on where the box is located.  It's a pain in the arse to keep track of which localities boxes are in to figure the correct tax, but necessary.  I do understand your point that you will only pay income taxes on profit.  Having started in late August/early September, I'm most likely won't show a profit in 2019 as I'll use any profit on 2020 cost in December.  Also, my .06 theft calculation was based on the actual cost of candy to me, not the potential lost revenue.  My Cogs is 30% and 30% of 20% of Gross sales is 6% of Gross sales = .06 of every $1.  

AngryChris:  We really didn't have a clue of how to predict depreciation.  When figuring it, we figured a cardboard box for candy would last about a year.  We also figured each box would have average sales of $20 per month.  Therefore, we took the cost of a box (approximately $8) and the total revenue for a box for a year ($240) and came up with 3% depreciation.  The boxes could possibly last much longer, of course, some will not.  Again, we have no clue as we have no experience and were just simply trying to make a projection.  Also, my boxes are not snack boxes and understand that they may be built differently, handled differently, hold up differently.  How long does a typical cardboard snack box hold up on a route?  Anybody out there that can give me an idea of the life expectancy for the typical candy honor box?

Flint:  I think you were misunderstanding.  I was not trying to break down the numbers per individual item sold.  I was simply trying to present the numbers as a percentage stated as per dollar sold.  Also, I do understand that it's all about volume but have/had no historic data for a context of what to expect for sales per box per month.  My only way of doing research for that was to read this discussion board and watch others who have been posting videos on candy honor box routes to create an estimate.  Shout out to the Mercado Channel for inspiration and data.  Between those two areas of research, I concluded that a typical candy honor box could potentially average $20 per month of sales.  With almost one month in the books, I am actually averaging closer to $24.  I will make a collection this weekend and be able to provide better numbers early next week.  My hope is to be able to provide historical data going forward similar to that Bryan H. is providing on the snack box side of things, only this data would be for the candy boxes.  Of course, I have no plan to make this a full-time endeavor so will not be able to show the growth over time that he has shown or whether this side of the honor box business is a viable full-time endeavor.

Share this post


Link to post
Share on other sites

You were not technically trying to do a per-item calculation but you were technically trying to do a per-dollar calculation, which is pretty damn close to being per-item!!

Let me tell you this.. in my experience,and others have way more experience with honor boxes than me, you should net 40-60% not including wages or charity fees.  With your fees, I think 25-45% is realistic before income taxes.

You are all wrapped up in the numbers while missing the most important thing.  The profit/time number.  If you service 4 boxes in one hour at $20/box, even at 25%, you'll make $20/hour.  At 40% you'll make $32/hour.  Just think if you just did 30 boxes in 8 hours each month @ 33%.  That's about $200 in 8 hours.  It's not a lot when it's like that, but imagine a route of good accounts that average $30/month each instead of $20.  Now, at 33%, you profit about $300 in 8 hours.  Now do that full time and you're making 75k/year.  If you make more than that now then why waste your time with this?  But if you make considerably less, you can see just how worthwhile it can be regardless of all of the costs.

If you could buy a Walmart that only profited 1% after ALL costs, would you turn it down?  What about 50% profit from a lawn company?  If the Walmart generated 10,000,000/year, you'd make $100,000.  If the lawn care company generated $70,000/year, you'd make $35,000.

 

  • Like 1

Share this post


Link to post
Share on other sites

Chris is EXACTLY RIGHT!  You can not look at "per dollar" averages OR really even "per account" averages.  In the Honor Snack world, the name of the game is 'Service as many boxes as you can and collect as much money as you can!"  You will have lower volume accounts that have ZERO shortage (helps with overall shortage total for entire route) and you will have some HIGH volume accounts that run a little higher shortage than you like (helps with overall dollars collected for entire route).  The idea is to look at what the ENTIRE route does collectively.  If you try to fit every account into some "perfect" configuration, you will have very few accounts and waste your time.  If you are not planning on doing this full-time, it may work out for you for a little while, but you will eventually lose interest and lose money as you try to analyze "per dollar" statistics for each account.  Just my 2 cents!  :)

 

Share this post


Link to post
Share on other sites
Posted (edited)

Chris and Flint,

I do understand what you are saying about having to look at this business as "an entire route".  My original post and numbers were mostly put up here as an estimate or best guess prior to actually doing business.  It was what we were figuring as a part of our business plan before going into business.  

With that said, here are some "overall" numbers for everyone to see:

Number of candy boxes owned: 50

Currently placed boxes: 43 (trying to keep 6 to 8 in reserve to switch out each time I run the route)

Placed 10 boxes September 4, Placed 10 boxes September 6, Placed 12 boxes September 7, Placed 10 boxes September 10.  Placed 2 boxes September 14.  Lost 6 of the original locations and relocated 2 immediately.  Relocated the other 4 on September 20.

 

Here is an update as of the end of our first month, September;

Gross Income:  $605

Expenses

Boxes and Supplies:  $540  (Sheridan Systems Pink Ribbon candy boxes)

Candy (Cogs😞 $650

Sam's Membership: $25

Office Supplies: $83  (Fliers, business cards, labels)

LLC Setup:  $89

Estimated Sales Tax on Gross Income:  $40

Mileage:  307 miles  (estimate of 20 mpg at $2.60/gal)  $38

Total Expenses:  $1465

Current Loss:  $860

At current rate, I should cross into the black about 10-11 weeks from original placement of boxes

 

Current estimated monthly gross income per box:  $27

Current estimated monthly gross income:  $1161

Even though this was for the "month of September", since boxes weren't all on location at the beginning of the month and since we don't collect every box on the last day of the month.  The average amount of days each box was on location and collected was 14.5 days per box.

 

 

 

Edited by Two Rivers

Share this post


Link to post
Share on other sites

I get what you are saying about the "per dollar" values and determining if you can be profitable, but it really won't help you.  NOW...your monthly information will.  But let me help you with a few things because your loss is not as big as you think it is.  FIRST:  COGS (Cost of Goods Sold) is NOT an expense.  Inventory has value and you are missing that.  COGS is determined by taking inventory each month.  To determine your COGS, take your BEGINNING inventory (value), ADD your monthly PURCHASES (inventory purchases) and SUBTRACT your ENDING Inventory (value).  THIS gives you the COGS ( Cost of goods SOLD).  Your figure is just your total purchases.  SECOND:  Take TOTAL SALES (all money collected for month) - COGS = GROSS PROFIT.  This is the money you make BEFORE any expenses are paid.  This is IMPORTANT, because it relates to the health of your business.  It answers the questions: Am I priced correctly and Is my inventory costs correct?  Your GROSS PROFIT should be around 50% of your Total Sales (GP/Total Sales), give or take a percentage.  If it is too low, you are either priced too low OR you are spending way too much on inventory.  THIRD:  Expenses are totaled and then are subtracted from the GROSS PROFIT.  This is to help you see what you are doing with the money you are generating.  Some of your expenses are ANNUAL expenses and could be broken up through out the year.  Also, expenses like gas/fuel should be listed as the exact figure your purchased and not estimated by mileage.  Look at the state of your business monthly so that you can make any adjustments needed.  Looking at annual numbers is too late to fix anything.  You are on the right track and hopefully will be SUCCESSFUL!  By the way, are you running Charity Mint/Lollipop/Bulk Candy honor boxes or Honor Snack trays with Chips, candy bars, cookies, etc. ?  Hope this helps!  Best of luck to you!  :) 

Share this post


Link to post
Share on other sites
Posted (edited)

Here's a few things I've learned after starting a candy/mint charity honor box route recently.  I'm also in the midwest.

1. Peppermints don't do as well as small candy bars.  I have a lot of boxes that will be completely empty when I go to service them except for the peppermint patties.  Suckers don't do that well either.  I do put 4-6 suckers in each box because I can simply stand them up against the back wall of the box and they don't really take any space from the other candy.

2.  I'm now doing primarily a mix of different candy bars, after I quit buying york peppermints.  A mix of things like Snickers, kit kats, almond Joy, peanut butter cups, hershey bars, and similar sell the best for me.  Be careful to look at the size of candy you're buying.  You want individual pieces that weigh 14-17 grams each. Do not try to sell smaller pieces than that.  People will simply not buy them.

 

3.  What is your sales price?  Are you doing the 3 for a dollar option?  If so, I would stop doing that and just use $0.50 each.  I've had zero problems with the $.50 price and it makes shrinkage calculations easier.  The 3 for a dollar pricing has been around for years and years and just isn't practical with today's costs and shrinkage.  It also means you can afford to buy a little better candy.  My cost is $0.13 - $0.16 per piece.

4.  Shorten your sales pitch.  The less detailed info you give them the better.  Once they say yes, stop talking.  You're correct about placing the boxes yourself.  I'd never pay anyone to do it.  The boxes really do almost place themselves.  I've placed 11 boxes in an hour before.  My retention rate is about 95% plus for at least 3 months or more.

5.  You're estimated monthly gross per box seems about right.  I've been averaging $24.58 but I haven't pulled a single bad location yet.  I have several locations that are doing $5 per month or less gross, and a few that are running negative.  I haven't pulled them yet because I want to focus on building out my entire route and getting all boxes located first.  I also want to give all the boxes at least 3 months before deciding to relocate.

6.  As others have mentioned this really is a volume game.  I decided early on there was no way I'm going to count the number of pieces of candy going in the box or leftover.  That would take forever.  I know that I put an average of 85 pieces of candy in each box.  When I collect the boxes I just eyeball what's left as a fraction such as 1/4 gone, 1/2 gone, 3/4 gone, empty.

 

I'm actually giving serious thought to not even counting how much money comes out of each individual box, once I have a little more experience, and have my full route built out.  It takes a lot of time to count the money that comes out of each box.  I think after a while I can just eyeball the candy leftover, and eyeball the money to know whether the box is profitable.  That would allow me to simply take all the money to the bank without counting every box.  Does anyone else do it that way?

 

 

A question for others:

One thing I'm looking for input on is how do you prevent having old candy?  I try to rotate the candy in the boxes, and put some new candy on the bottom of the boxes and then put the old candy on the tops but it seems likely that in several months I'm going to wind up with some old candy floating around in some of the boxes.  Does anyone have a good solution?

 

Edited by Vending Dude

Share this post


Link to post
Share on other sites

What exactly is it that you are here for?  It seems like you came asking a question (or implying that you had a question) but you seem to react like we are lecturing you and you give us that eye-roll "I know." response lol.

Just an FYI, but I don't know a guy who has more honor box dollars going through his hands than flintflash.  If he gives you info, it's the most valuable free advice you can get regarding honor boxes.  Just saying.

  • Like 1

Share this post


Link to post
Share on other sites

Flint,

I am running a charity mint/pops/candy honor box route.  Also, I understand what you are saying about using the exact figure purchased when it comes to gas, but isn't that much simpler if you run full-time routes, have vehicles that are solely used for business purposes?  In my case, I'm using a family car that also goes to my full-time job every day, takes a kid to soccer, etc.  I'm keeping track of mileage and then will ultimately use the IRS mileage deduction on my personal taxes. 

I do appreciate your breakdown of the accounting side of the business.  I'm lucky in that I am married to a wonderful wife who has been an accountant for 33 years.  She has volunteered her services in this endeavor to help out.  Any misrepresentations on here are merely my incompetence in being able to clearly state her methods within this forum.  Also, I understand that you mostly do snack box routes.  Have you also done the mint/pop/candy side, and if so, what were your results and how do you feel about it?

After having read extensively on here throughout the summer, I chose mint/pop/candy since I only plan to ever do it part-time and am not available M-F, 9-5 to service those types of businesses.  I am exclusively operating evenings/Saturdays.

AngryChris,

Why am I here?  I am here to both gain valuable information and share valuable information.  I truly do appreciate expert opinions/experiences and want to contribute what I can.  I read extensively on this site prior to committing any money to this endeavor.  I found Bryan Humphrey's information and the exchange to be quite informative and motivating, however, his information was solely for the snack box side.  It's my hope that this might become the mint/pop/candy version of that thread.  One of the things you added recently that I totally agree with is the fact that the money/time ratio is critical.  I want newcomers to understand that, while some describe this industry as passive income, it requires much time, much effort, and attention to detail.

VendingDude,

Excellent information.  I've seen on here where some people swear by mints and others do not.  I didn't start with mints, but have added them to the inventory and am looking forward to seeing how they do for me.  I can't imagine not putting pops out.  They account for 32% of product sold for me so far and I've only put out tootsie and blow pops, haven't even touched jolly rancher pops yet which are apparently quite popular, but a bit more expensive (.11  per unit).  I have put out just a few sour apple/caramel pops for fall and to grab attention, but I can't find them cheaper than .14 per unit.  

I am currently doing 3/$1 or .50 and I do stick to the fun size candy.  I've been getting the mars variety pack from Sam's 155 ct for $13.95 at my Sam's.  I have added laffy taffy, now and laters, and a few other less expensive candy's to keep the cost per piece at about .09  

I do have a competitor in my community who is putting out boxes at the same price point, but putting bite size candy in his boxes.  His boxes are also affiliated with his own local charity which is a local version of a boys/girls club to get kids active and keep them off the streets.  I believe he is Asian and seems to have only targeted Asian run businesses in the nail salon and restaurant sectors.  I have probably 3-4 locations where my boxes are sitting right next to his and mine seem to be doing fine.  I believe I have a better looking box and obviously offer a better deal.

Finally, why switch from this to bulk?  Well, I kind of see bulk as being more passive than this, especially gumballs, and see that as possibly allowing for a higher number of locations, serviced less often and with no worry about theft.  I do understand that where you gain on theft, you may lose on spoilage/shrink on the bulk end.  I plan to begin to inquire about the possibility of putting gumball machines in a few of my locations.  Specifically, I have two martial arts clubs located in strip malls that have started out fine.  I could easily see adding a gumball machine in each for variety, higher profitability, and perhaps more long-term stability.  I do worry about the fact that some bulk vendors are seeing .25 vends as no longer acceptable from a profit margin perspective, but that is probably a discussion for the bulk threads.

Finally, I agree that counting money/counting candy is turning out to be both very tedious and time consuming.  For every hour of running the route/collecting boxes, I am spending as much if not double that amount of tim e counting money and refilling and I'm not even considering the amount of time to consider logistics.  I am currently running boxes on 7 day, 10 day, and 14 day cycles and probably need to even spread that out further to cut down on time.  I have a very dense collection area though, which is lucky.  Also, I have no good answer for ensuring the turnover of inventory to try and prevent spoilage and would appreciate insight as well.

Share this post


Link to post
Share on other sites

The people that describe the business as passive income are youtube wannabes and/or people trying to sell e-books about vending (which they usually know little or nothing about).  Vending is a business that requires work!!  If someone tells you it's passive income, they are liars and they are just trying to get you to make you think they know their stuff so you'll click their pages or buy ebooks or whatever they want.  I don't think the real vendors out there think it's passive at all.  Even bulk is NOT passive.  People pretty much say that, since the machines "make money for you", you are collecting "passive income."  The truth, as you should already know, is that you do not collect money unless you physically do something.  ANY business could be truly passive if you were able to collect a paycheck without doing any work.  For example, if you had a good size route and you hired someone to do ALL of the daily duties, including even depositing money into the bank.  That typically requires a lot of profit though.

Bulk vending sounds nice because the machines can go a long time between services but it too has downsides just like anything else.  One of the downsides is that it's typically one of the slowest methods to product profits.  Sure, a decent location might make you $20 profit in 1 month, but not every location will do that and you might find yourself going to 3 stops every month and 10 steps every 2 or 3 months.  You might get bored of the slow payout until you have 100+ bulk machines out there.  But you could have done the same thing with snack boxes or mint boxes or full-line machines.

Personally, as a full-line vendor, I am partial to full-line because I know just how much profit I can make at the right locations.  For example, with you being someone with practically zero experience in full-line, I would expect you to easily be able to make $25 in profit in 1 hour from full-line machines.  With a good location, I can easily make $100/hour in profit.  From all of the math I have ever done, I don't think snack boxes can realistically break $40/hour but I think $20/hour is totally manageable.  With bulk machines, I have no experience but I think $50/hour is a realistic possibility (I could be wrong though).

Whatever you do, I recommend sticking to no more than 2 different things but sticking to 1 thing is best.  So if you like bulk machines and hate mint boxes, then do bulk.  If you don't like bulk but you love mint boxes then do that instead.  Honor boxes require practically no tools and very very little startup costs.  Bulk machines cost a lot more than honor boxes but still pretty cheap compared to other ventures but the downside is that it can get VERY expensive to invest into enough bulk machines to turn a decent profit.  With snack boxes or mint boxes, you could theoretically build a very profitable route within weeks or months with probably well less than $2,000.  You could make enough money to quit your job if you really kicked butt.  My full-line is doing very well and the only reason I gave up the honor boxes was because it was taking up too much of my precious time and my full-line route was making way more money.  That's the reason why I have a grasp on what full-line can make vs honor boxes.  But, if I wanted to recommend something to someone else, I would tell them to consider doing snack boxes or  mint boxes and just go out and place as many as you can, manage it well, and get a system in place to do all of the numbers.  I KNOW you can clear $1,000/week from snack boxes if you do things right.  I am not sure about mint boxes but I would imagine you could do well with those too.  They just might be harder to place.

When I asked you why are you here, I was gearing more toward asking you why you want to do this on the side?  Do you just want to make some extra money and that's it?  Do you ultimately want to quit your day job and be self-employed?  Because, honestly, I think it would be best to steer you toward different things depending on what you really want out of this.

Share this post


Link to post
Share on other sites

AngryChris,

Why am I here?  Yes, ultimately for me, this is just about making some money on the side short-term and to potentially supplement my income in retirement.  I am a high school teacher and could retire with full benefits in five years.  Full benefits here in Iowa means I would be receiving 60% of the average of my five highest paid years.  If I choose to stay longer, it goes up by 1% each year.  Quitting in five years and looking for an extra 40% from somewhere is looking pretty attractive right now.  Unfortunately, the fly in the ointment is health insurance.  I currently receive health insurance for free, which I know is a huge benefit and will be a huge cost to take on while going down in income by 40%.  

My wife also works full-time as an accountant.  We make good money between the two of us, but have six kids and two grand kids.  Five of our children are grown and out of the house.  We've had some college expenses over the years to help with.  Our last is going on ten years old.  So, ultimately, who couldn't use a little extra income.  I must admit that I came upon vending by watching those Youtube wannabes.  I'd like to think I am smart enough though to not throw a ton of money into an industry I know little about.  I did much research throughout the summer and ultimately landed on the candy/mint honor boxes since they seemed to be the lowest cost and provided some immediate revenue streams combined with a relatively short period of time before experiencing profitability.  

Share this post


Link to post
Share on other sites

Weekly Update:  Candy/Mint/Pop Route

43 boxes out on location

Lost one location, a pizza restaurant which closed it's doors.  I showed up Friday evening to switch out the box, found the lights out, chairs up, and door locked.  Could see my honor box sitting on the counter inside.  Luckily, the business has another location in another state.  Had to call them and they gave me the number of the local realtor/broker who showed up to let me in to get the box.  In all, I know having it sit there only over the weekend is a rather short time compared to what can happen to equipment being stolen/lost/locked up in this industry.

I immediately replaced the location by placing the box in another pizza place right down the road.

So, for some totals

Collected 26 boxes 

Collected $240 dollars

Overall, since placing first boxes September 4, have collected $841 in gross income.

Boxes  averaging $25.88 per 30 day month gross income.

Some observations/data

I have boxes placed in the following types of businesses.

Auto Repair - 4

Pizza Restaurant - 5

Other Restaurant/Bar - 12

Nail Salon - 9

Martial Art Studio - 2

Hair Salon - 2

Clothing Boutique - 1

Pet Supply Store - 1

Vet Clinic/Boarding - 2

Physical Therapy Clinic - 1

U Haul Rental-Storage - 1

Paint Supply Store - 1

Cell Phone Store - 1

Power Equipment Store - 1

Anyone out there try locating boxes in the following types of places?

Chiropractic Offices?

Doctor Offices?

Exercise/Gyms?

Other Ideas?

 

Share this post


Link to post
Share on other sites

I have some optometrist eye care centers that do well.  Tattoo parlors do well and always let you place a box.

Share this post


Link to post
Share on other sites

Two Rivers, in my opinion, you are doing an excellent job getting your own locations.  You have created some pretty solid cash flow within 1 month's period of time which is something a lot of people wish they could do.  Because of that, I do think you are in a good situation as it is.  Because of that, I would recommend you avoid bulk at the moment.  Yes, your profit won't be as good with charity boxes as they would with standalone stuff, but I am pretty sure you are doing all of this out of a regular vehicle that you already own so you don't have much to lose should you get burnt out.

Given the nature of your situation, I think you should expand the honor boxes as much as you reasonably can without having any impact on your current job.  So, if you can grow more then do it.  If it feels like you are working way too many hours, then cut back, and focus specifically on getting rid of dud locations and getting better locations whenever necessary.

One thing youtubers have in common is that they usually know that their audience is pretty clueless (or ignorant at the least), that their audience is young (and ignorant, again), and that their audience is there because they want to get rich fast.  Because of the nature of their audience, and because of the nature of youtube, your audience is pretty much always full of people who want to be just like the "star".  So, these "stars" spend time portraying themselves as these big-time vendors that make a boat load of money from whatever venture they do.  In reality, what the youtubers want is to milk advertisers and youtube for as much money as they can get by getting as many subscribers as possible.  That is why they always tell you to "like, subscribe, and write a comment!"  If you like and/or comment, it draws more viewers to their channels because of trending videos.  And, if they get enough subscribers, they can get money from advertisers as well as youtube directly, and they can also make money selling ebooks and whatever other products they have.  Basically, many of the youtube channels out there are an entertainment business where you (the viewer) are "entertained" by their videos (just like shows, documentaries, and informercials on TV) and then ads pop up (which advertisers pay for) and the youtuber may hopefully get some kick backs from those ads.  It's all marketing stuff.  That's not to say that all youtubers don't actually know anything.. but I have watched videos and rolled my eyes as these guys drive around in what appear to be rented/borrowed cars and pretend to be ballers when, in reality, they faked it until they made it got enough money from youtube subscribers to actually afford stuff.

This website, in my opinion, is your best source for actual knowledge on vending.  There may be something else out there but this is the biggest one I know of.  There are very popular websites for home improvements and DIY, for real estate, for car enthusiasts, and various other things.. but this is the only "premiere" website for vending that I know of.  I just wanted to add that because I want you to realize that youtube is mostly a joke when it comes to people telling you how to make money but you CAN do it.  In fact, from what I have seen, the youtubers usually do have a real vending situation going on but they tend to exaggerate things to make it sound better than it is.  A youtuber might say "look, I made $800 in one day!" but not tell you that only $400 was actual profit.  The cost of the vehicle was not accounted for.  The cost of repairs to equipment is never accounted for.  And they might have only collected $800 in a day because that was what their machines made after 3 weeks.  Instead of adding those details in, which would likely confuse most people and turn them off from vending anyway, they just tell you the best parts and make you think that you can make $800, or the equivalent of $40,000/year, all by working 1 day each week.  I'll give you some truth talk though.  In a typical day for me, I collect anywhere from $650 to $1,400.  That takes me around 8 hours each day to do that and my system is currently not super efficient because I don't have a warehouse yet.  That is with full-line vending.  I have already realized myself that I could easily collect as much as $2,000/day with the right setup if I had better locations.  And let me tell you, if my route could generate $2,000/day, I would hire someone right way and pay them a minimum of $20/hour if they did the job right.  With honor boxes, you'd be hard pressed to be able to afford to hire someone with your charity setup.  Regardless, if you are willing to do the work and you like honor boxes, then carry on.  I just wanted to ask you why you were here for reasons I stated and it sounds like you have already started so you may as well continue on.  Assuming you aren't too old and your health is well, you may consider pursuing other ventures as well since you sound comfortable going out there and selling your services.  That is a very tough thing for many people to do and, in some ways, worth far more than the money you'll make from honor boxes.

  • Like 1

Share this post


Link to post
Share on other sites

Collected 25 boxes this past week.  

$285 gross sales collected this week.

Boxes were out an average of 12 days.

$1125 gross sales collected so far.

I am currently running a route on Tuesdays (6-7 boxes), Fridays (6-7 boxes) and Saturdays (12-14 boxes).  I'm also beginning to figure out which boxes can be stretched out longer.  I currently have boxes on 7, 10, and 14 day cycles.  I have 3 to 4 that need picked up weekly.  I know I can begin to stretch some of these out even longer as I contemplate whether or not to place another 25 to 50 boxes eventually.  

Lost two locations; one was a pet supply store where I left a box for the owner to look at and asked that they give me a call if they didn't want it.  They never called, I assumed it was placed, showed up to switch it out only to have the person standing there with the full box ready to hand back to me stating that it just wasn't for them.  It happens, just wish they'd call rather than sitting with the box for ten days.  Also lost a martial arts studio which had been performing wonderfully for me ($16-20 per week).  Owner stated that they didn't like the conflict it created between the children and the parents.  Yep, that also happens.  Oh well, had both boxes re-placed almost immediately. 

Here's a dilemma, wouldn't mind feedback:

I have already pulled two locations for extreme theft. One a national pizza place where the box wasn't allowed out in public, had high theft and was damaged.  The other, a national auto repair chain with high theft.  

Now the dilemma.  I am considering pulling two more.  One is a national auto parts store.  The store already has candy and chips for sale as well as a cooler with pop for sale.  The manager has admitted that it is mostly his employees accessing my box, but has no idea how high the theft each.  I am collecting the box every ten days and each time I collect, the box is close to empty (75-90 pieces of candy at .09 cents a piece.  The box is running $6-$8 collected each time, which basically means the money is simply paying for the candy.  Nothing more.  I have considered bringing the issue up with the manager and stating that I'd be willing to leave the box in if he would grant me access with a gumball machine.  I currently have no gumball machines out but wouldn't mind placing a few.  The store is relatively new, only built within the last two years and will only get busier and busier since it is in one of the fastest growing suburban areas in the U.S.  Would having a gumball machine be worth leaving a box that is not making money?

Also, I have an auto repair store that is averaging about 40-50 pieces of candy gone every two weeks, but only averaging $2-3 dollars collected every two weeks.  Extremely high theft, extremely low revenue so far.  It already has both a bulk candy machine and a gumball machine

 

I'm considering pulling two more.  I have a box in a nation-wide auto parts store.  The store also sells candy by the counter, full-sized candy bars, chips, etc. and has a cooler with pop in it.  The manager has stated that it is mostly his employees eating the candy.  It routinely has 75-90 pieces of candy gone and only $5-$7 in the box, just enough money to about cover the cost of the candy.  I've considered bring it up to the manager and stating I could live with the shortage if he would allow me to put a gumball machine in the store.  I do not currently have any gumball machines, but wouldn't mind placing a few based on the high profit and low maintenance aspect.  Would this be a good trade off, or should I simply pull the box.  I don't want to attempt to make the manager feel responsible for the theft in any way, don't think it's the right thing with the candy/mint boxes.  

Also, I have an auto repair shop that every two weeks is averaging 40-50 pieces of candy missing, but only a few bucks in the box.  Extremely high theft and extremely low revenue for what I've experienced on my route so far.  This store already has both a bulk machine and a gumball machine, so no negotiating here.  The box has been there almost 6 weeks now.  Pull it?

 

Share this post


Link to post
Share on other sites
8 hours ago, Two Rivers said:

Collected 25 boxes this past week.  

$285 gross sales collected this week.

Boxes were out an average of 12 days.

$1125 gross sales collected so far.

I am currently running a route on Tuesdays (6-7 boxes), Fridays (6-7 boxes) and Saturdays (12-14 boxes).  I'm also beginning to figure out which boxes can be stretched out longer.  I currently have boxes on 7, 10, and 14 day cycles.  I have 3 to 4 that need picked up weekly.  I know I can begin to stretch some of these out even longer as I contemplate whether or not to place another 25 to 50 boxes eventually.  

Lost two locations; one was a pet supply store where I left a box for the owner to look at and asked that they give me a call if they didn't want it.  They never called, I assumed it was placed, showed up to switch it out only to have the person standing there with the full box ready to hand back to me stating that it just wasn't for them.  It happens, just wish they'd call rather than sitting with the box for ten days.  Also lost a martial arts studio which had been performing wonderfully for me ($16-20 per week).  Owner stated that they didn't like the conflict it created between the children and the parents.  Yep, that also happens.  Oh well, had both boxes re-placed almost immediately. 

Here's a dilemma, wouldn't mind feedback:

I have already pulled two locations for extreme theft. One a national pizza place where the box wasn't allowed out in public, had high theft and was damaged.  The other, a national auto repair chain with high theft.  

Now the dilemma.  I am considering pulling two more.  One is a national auto parts store.  The store already has candy and chips for sale as well as a cooler with pop for sale.  The manager has admitted that it is mostly his employees accessing my box, but has no idea how high the theft each.  I am collecting the box every ten days and each time I collect, the box is close to empty (75-90 pieces of candy at .09 cents a piece.  The box is running $6-$8 collected each time, which basically means the money is simply paying for the candy.  Nothing more.  I have considered bringing the issue up with the manager and stating that I'd be willing to leave the box in if he would grant me access with a gumball machine.  I currently have no gumball machines out but wouldn't mind placing a few.  The store is relatively new, only built within the last two years and will only get busier and busier since it is in one of the fastest growing suburban areas in the U.S.  Would having a gumball machine be worth leaving a box that is not making money?

Also, I have an auto repair store that is averaging about 40-50 pieces of candy gone every two weeks, but only averaging $2-3 dollars collected every two weeks.  Extremely high theft, extremely low revenue so far.  It already has both a bulk candy machine and a gumball machine

 

I'm considering pulling two more.  I have a box in a nation-wide auto parts store.  The store also sells candy by the counter, full-sized candy bars, chips, etc. and has a cooler with pop in it.  The manager has stated that it is mostly his employees eating the candy.  It routinely has 75-90 pieces of candy gone and only $5-$7 in the box, just enough money to about cover the cost of the candy.  I've considered bring it up to the manager and stating I could live with the shortage if he would allow me to put a gumball machine in the store.  I do not currently have any gumball machines, but wouldn't mind placing a few based on the high profit and low maintenance aspect.  Would this be a good trade off, or should I simply pull the box.  I don't want to attempt to make the manager feel responsible for the theft in any way, don't think it's the right thing with the candy/mint boxes.  

Also, I have an auto repair shop that every two weeks is averaging 40-50 pieces of candy missing, but only a few bucks in the box.  Extremely high theft and extremely low revenue for what I've experienced on my route so far.  This store already has both a bulk machine and a gumball machine, so no negotiating here.  The box has been there almost 6 weeks now.  Pull it?

 

At this stage of the game, I'd pull them.  You have no problem placing your boxes, so finding a couple replacement accounts should be easy enough.  I would not offer a gumball machine to the "break even" account.  Should things get worse (and they will), you will have no "negotiating recourse" because if you choose to pull the box, they will tell you to take the gumball machine as well.  I agree with Chris, I would avoid the bulk vending.  You seem to be doing well with the Charity boxes and can easily grow that business.  It is a Low Overhead business that is not as labor-intensive as bulk vending.  Why have money wrapped up in equipment?  I would continue to grow your Charity Box routes.  Just my 2 cents.  :) 

Share this post


Link to post
Share on other sites

I agree stick with charity junk candy boxes for now... you need time to analyze your theft rates and learn with low cost/consequence. Going to bulk raises the stakes quite a bit and makes many more logistical problems (namely costs and vehicle and becoming fairly cemented to working in that area). Don't forget that this is your side job, and you need to remain fairly flexible if your primary job had a better opportunity or required transfer arise. You also don't want a side hustle to interfere with your real job or your fitness or real life things (romance, friends, etc)... trust us, it sure can. Chris is also right that the "experts" on YTube are selling their system, not actual success. He is also definitely right that this site is good to search and gain info from, and RJT's 'Truth About Vending' is also a good ebook for a couple bucks on Amazon... he is a former contributor here.

Theft is always a thing in honor vending. You will have to pull many more of your current locations than you currently realize. Just keep placing more in the tightest pattern you can and do the best you can. Many locations start off fine enough, but employees (and regular customers) find out soon enough they can steal can not get caught. It only takes one or two stealing regularly to cause a location to go sideways and need to be pulled. It is not the managers' job to police your box, so you generally want to quit discussing it with them (notes are no use with charity junk boxes... and very minimal help with break room snack either). If you make your box a hassle for the employee or manager, you won't have to worry about deciding whether to pull or not... they'll tell you to take it out.

Personally, I won't compete with other vending in the same office/store (unless it is your own). People just steal from the one they can grab from when they have no money (the snack or charity candy box) and pay for the better quality option (vend machine or snacks for sale at the store) when they do have money. My biz is snack boxes, and I leave when I hear there is a vending machine or even if I see a candy bulk machine. Similarly, you should also not put a charity junk box against a snack box or bulk machine. Yes, those are easy placements, but one is secure and one is not. It is tale as old as time, but find out the hard way if you like.

As was said, good job on getting locations... keep at it. It is basically just trial and error though... no need to type novels about location details and whether you will pull it (unless you find it therapeutic?). For me, it was "three strikes" to yank any snack box with 3 shortages of 30% or more in 3 month timespan... just set an objective metric that makes sense to you and stick to it. You will get some boxes that will last at one place for years and others that you will have to pull in just a few cycles. GL

Edited by FlyGuy

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...