Drink ONLY Vending - is it possible ?

[SPARK]

Hi guys, long story short, I am 6-7 months into buying (overpaying) for a vending route. I have 18 locations, all slow, with 5 of the 18 having snack machines. A lot of snacks are spoiling from expiry dates. Thinking of selling the snack machines and not even bothering, doing DRINK ONLY.  Between driving too far, throwing away food, and fixing machines ($$$) I am in the hole for $50-$200 per month. SO actually losing money running the route. Depressing.

Is that possible or will any of the better accounts want BOTH snack AND drink service ? Are there any successful vendors here who do ONLY Drinks ? And if so, what has been your experience ?

My best account is doing $220 / month drink only. Is that horrible ?

I am learning a lot about this business came very closing to giving up but will stick it out. Located in Southwest Houston area.

Thank you for any advice,

[orsd]

The bottlers will have basically all the prime soda only locations on lockdown.

A location wanting a snack and having the sales to justify having one will have a decent chance of being lost to a competitor who will offer a snack.

It is possible, but it’s not real easy to do.

However, if you are having spoilage issues with 5 machines you either have very poor sales or suck at stock management. You best location doing 220/ month drink is an ok location, but does not bode well for the rest of your route. Personally I would say if a snack doesn’t pull 60-80 a month pull it, your competitors really don’t want that location anyways.

Also, get better at stock management. Take a count of how many of each product sells at each location and buy only that amount per per service cycle.Try to only have 1.5x the product that will sell during a service cycle in the machine. (For example, if you service once a month and you sell 4 Doritos on average at that machine make sure there are no more than 6 in the machine.) Also, look at dates a lot better when you buy stuff. Last, expand. Take the machines you pull (assuming they are not obsolete),  buy some decent multiprice sodas and hunt for new locations.

Edited October 26, 2019 by orsd

[SPARK]

THANK YOU for the great reply. 

I thought $220 / month in drinks is AWESOME.  What is the typical breakdown in a large dense populated area like Houston ? What is considered a good drink only account ?

Organizing stock now. Going to try Vendsoft for the VMS side, I  have nothing now.

Thank you again and glad I found this forum.

 

[orsd]

3 hours ago, SPARK said:

THANK YOU for the great reply. 

I thought $220 / month in drinks is AWESOME.  What is the typical breakdown in a large dense populated area like Houston ? What is considered a good drink only account ?

Organizing stock now. Going to try Vendsoft for the VMS side, I  have nothing now.

Thank you again and glad I found this forum.

 

Smaller operators like myself like to see at least 150 (bare minimum floor) to 200/ month from a soda. A snack at the same hypothetical location should pull approx 100/mo (depends on season, but shouldn’t be an issue for the pits of hell of Houston) However I do still have some sub 100/month locations with older single price sodas, hit them every so often when I’m in the area anyways, usually end up pulling them if a major issue happens.

I personally start adding cc readers when      a machine does close to 250/mo in sales, this is also what I like to see to add a snack.

Larger guys with enployees usually have a 200/mo minimum to keep a location, some only want 400-500+ a month out of a soda snack pair. (Usually come out to like 300 from the soda and 150-200 from the snack) 

[SPARK]

Would this be a correct summary ? So long-term it would be easier to achieve profitability by GETTING BETTER AT THE BUSINESS (both snack & drink) then to simply try to land drink-only accounts ?  Simply because the best drink accounts are usually serviced by the bottlers, and the great / good ones have both snack and drink machines.

You've opened my eyes with the numbers. I HAVE A TON OF CATCHING UP.

I read the newbies post and what not to do. Unfortunately I've already done everything it said not to. LOL.

 

 

[AngryChris]

I think $200/month is solid if it's cans.  Questionable if it's bottles though.  $200/month from cans can have long service cycles with good margins.  Not so much with bottles, plus expiration dates are much much worse.  I'll take locations that do $5k/year all day long between snacks and soda.  I love them because I can service them every 2-3 weeks without much issue and the big dogs don't really want them and the smaller guys can't beat my equipment or service.  I invest in good monetary systems and good refurbished equipment so I almost never have problems at these locations.  With bigger locations, I have to stay on my toes and be mindful with pricing.  With smaller locations, it's my pricing or you can find someone else (I deliver my message much more professionally than that) or else I'll just cancel them.  $1500/year used to be my minimum.  Now it's $2k/year for can+snack and $3k/year for bottle+snack.  That's for existing locations.  For new locations where I have to place my own equipment, I want locations that I estimate to do at least $7k/year.  That's because I'm only placing nicer equipment.

[orsd]

7 hours ago, SPARK said:

Would this be a correct summary ? So long-term it would be easier to achieve profitability by GETTING BETTER AT THE BUSINESS (both snack & drink) then to simply try to land drink-only accounts ?  Simply because the best drink accounts are usually serviced by the bottlers, and the great / good ones have both snack and drink machines.

You've opened my eyes with the numbers. I HAVE A TON OF CATCHING UP.

I read the newbies post and what not to do. Unfortunately I've already done everything it said not to. LOL.

 

 

Yup.

Keep reading, and learn.

 

[Corvus Corax]

I had a slower account with a Combo that had stale problems. Cooling compressor went up and I replaced the machine with a DN368. Does much better. I also cut down on the variety. One row Pepsi, one row ginger ale, and the rest coke.

[Velsomnia]

On 10/26/2019 at 7:33 PM, orsd said:

Smaller operators like myself like to see at least 150 (bare minimum floor) to 200/ month from a soda. A snack at the same hypothetical location should pull approx 100/mo (depends on season, but shouldn’t be an issue for the pits of hell of Houston) However I do still have some sub 100/month locations with older single price sodas, hit them every so often when I’m in the area anyways, usually end up pulling them if a major issue happens.

I personally start adding cc readers when      a machine does close to 250/mo in sales, this is also what I like to see to add a snack.

Larger guys with enployees usually have a 200/mo minimum to keep a location, some only want 400-500+ a month out of a soda snack pair. (Usually come out to like 300 from the soda and 150-200 from the snack) 

 

Why does it have to make $250 in cash before you go with a card reader? I'm looking to buy my first machines in March and I have been operating under the assumption that I will fit them with card readers before I even have a location for them. Most people dont carry cash anymore and a card reader makes it much harder for them to say oh well I dont have enough money in cash but the grocery store or gas station up the road will take my card.

Edited November 1, 2019 by Velsomnia

[orsd]

The cash amount is an estimate really. If I think it’s gonna be a good loc it will get dropped off with a reader. But for a slower location that can go either way I like to wait. Below 200-250 mo in cash revenue means that the increase in sales due to cards is not enough to cover the cost of the reader. Exceptions apply of course, like locations with a lot of younger people I will put readers on despite abysmal cash sales if all other indications say this should be a decent location.

[AZVendor]

You can put a card reader on whenever you want but you can't guarantee that you profits will cover all of the expenses.  Until you know what kind of sales you will regularly have you won't know if a card reader will be beneficial.  You're foolish to think that you can predict cash vs card use until you have extensive experience in the business.  Your "operating assumption" is going to be wrong.  Rely on the advice you get here to know what experienced operators do so you have an idea of when it's right to put a card reader on.  

[Velsomnia]

1 hour ago, AZVendor said:

You can put a card reader on whenever you want but you can't guarantee that you profits will cover all of the expenses.  Until you know what kind of sales you will regularly have you won't know if a card reader will be beneficial.  You're foolish to think that you can predict cash vs card use until you have extensive experience in the business.  Your "operating assumption" is going to be wrong.  Rely on the advice you get here to know what experienced operators do so you have an idea of when it's right to put a card reader on.  

 

Thats exactly why I wanted to join this site before I bought machines and readers, I still haven't nailed down a locator service yet but so far it seems like im going to be in the hole $1100 a machine for 2 refurbished Dixie Narco 501E's plus another $150 each for the $5 bill option that vending world offers. Then i'm hearing that the locator service I found charges $600 a location, so im already down $3,690 just to buy the machines and get locations. I still need to work out a car, shipping for the machines to me and to the locations, and whatever other fees and such I need to pay to Florida to operate them. So I cant afford any costly mistakes, im only going to have $7,000 and 1 shot to do this.

Edited November 1, 2019 by Velsomnia

[AngryChris]

I have a fab shop that does about $80/week and I only added a card reader for telemetry.  They don't use the reader hardly at all because they are all older men who only trust cash.  I have another location that has been on my naughty list ever since I got them back in April.  I knew their sales weren't great (estimated $1800/year) but the location was part of a package deal.  Their sales quickly dropped to about $25/week from their previous average of about $35/week and I honestly would have pulled them if I could just get a mover.  Today, I just found out that over half of their millennial workforce was at another building for the past several months during their remodel.  I knew they were remodeling but I had no idea that half of their crew was at another building... I thought they just didn't work there.  So, although the sales are bad (they are better this last collection), I am going to switch out machines and add card readers since this location is full of 25-35 year old techies.  The people there are super annoying and clearly almost everyone acts like they have some superior intelligence and so I am pretty sure they look down on the barbaric practices of using "paper money" in a vending machine.  Apparently, though, the management was going to get rid of the vending and the employees had a fit.  Because of that reason which I JUST learned today, I am going to give them another chance and see if I can flip this account from doing $1800/year to doing close to $5k.  I didn't count, but if I had to guess, there were maybe 40 cars in the lot and almost everyone there is a millennial male techie.  My point is that demographics really matter. 

[Velsomnia]

3 hours ago, AngryChris said:

I have a fab shop that does about $80/week and I only added a card reader for telemetry.  They don't use the reader hardly at all because they are all older men who only trust cash.  I have another location that has been on my naughty list ever since I got them back in April.  I knew their sales weren't great (estimated $1800/year) but the location was part of a package deal.  Their sales quickly dropped to about $25/week from their previous average of about $35/week and I honestly would have pulled them if I could just get a mover.  Today, I just found out that over half of their millennial workforce was at another building for the past several months during their remodel.  I knew they were remodeling but I had no idea that half of their crew was at another building... I thought they just didn't work there.  So, although the sales are bad (they are better this last collection), I am going to switch out machines and add card readers since this location is full of 25-35 year old techies.  The people there are super annoying and clearly almost everyone acts like they have some superior intelligence and so I am pretty sure they look down on the barbaric practices of using "paper money" in a vending machine.  Apparently, though, the management was going to get rid of the vending and the employees had a fit.  Because of that reason which I JUST learned today, I am going to give them another chance and see if I can flip this account from doing $1800/year to doing close to $5k.  I didn't count, but if I had to guess, there were maybe 40 cars in the lot and almost everyone there is a millennial male techie.  My point is that demographics really matter. 

 

Yeah I figured learning what product to sell and the format for payment would be my biggest challenges and it sounds like that is correct. Best of luck getting your setup figured out.