Paying a locator versus doing it yourself?

[nam]

I know the locators won't like this thread much but here goes.  I've made a decent living locating machines for other people so to criticize a locator would be like criticizing myself.  It's not easy and they deserve what they're paid if they get good locations.  That being said, I don't agree with paying a locator to place machines except for a few exceptions of course.  Just making a generalization here and I know that statement isn't always true in each case.

There are seveal reasons I don't think very many of you should be using a locator to place your machines.  This business is about locating machines.  It's what this business is and it will never end.  The locators are going to be taking a big chunk of your money forever if you don't learn how to do it yourself.  If you pay them to locate 100 machines for you right now, this same time next year you'll need to pay them to relocate a high percentage of those machines again.  Of course the locators give you a guarantee but it's very short lived considering all the things that happen in the course of a year.  Lots of those businesses will go out of business.  Lots of those businesses will be sold to new owners that may have you pull your machines.  Some of them may end up having other vendors locate their machines right along side yours and now what was $25 a month is $12.  It is a never ending story of pulling machines and relocating machines with no end.  Now of course you all have locations that you've had forever.  But I'm talking in general terms.  Business failures are and have been higher than normal to say the least. 

The most important thing you need to know how to do in this business is locate!  Anybody can fill a machine or empty quarters out.   In my opinion you shouldn't be leaving the most important part of this business to someone else.  Or leaving so much of your money on the table for locators..  You need to keep it in your pocket not theirs.  Now if you have money to burn and money doesn't matter than by all means keep paying the locators  If you don't have money to burn then the best thing you can do is start learning to locate your own machines.

nam

[T BIRD]

Point well taken nam. Thats why I opted to buy existing routes from reputable vendors showing how much the locations produce etc. thru a broker. Sure it costs a little more, but I know I am getting locations that have been there for years and years.

[BudLeiser]

This smacks of anti-kiyosakism! (Rich Dad)

If I can't hire out parts of this operation, then it will forever be self employment and never a business. Hopefully I can control the numbers and make the system work, without having to do all the locating myself.

[alyssamma]

Nam, good points. I'd like to add a little to what you are saying. I think everything I say will agree with you

First I would like to state that I personally self-locate and use locators. I use locators for new locations and self-locate to replace bad locations.

Any business is about maximizing profits while minimizing expenses. Locating is an expense of vending. Anything you can do to minimize that is good. When you pay a locator vs. doing it yourself, you are "losing" the first 2-4mo. of income from that location. In other words, that first 2-4mo. of income will cover what you've paid the locator.

Obviously if you can self-locate then you are ahead of the game.

However, as Einstein famously proved, Time is Money. So, if you are in a position where paying someone to do something for you is more important/valuable than doing it yourself in order to save money then use a locator.

This is no different than paying someone to mow your lawn or wash your car. Much cheaper if you can do it yourself, but there are reasons to pay someone.

Ditto for starting your business yourself (instead of using, for instance, Legal Zoom), or doing your own accounting. These things aren't hard, and with a little bit of effort you can do it yourself and save a lot of money.

There is one other time to pay a locator. If you suck at locating This applies to my above examples too. If you have problems balancing your checkbook, then doing your own taxes isn't for you If you have problems talking to people or, more importantly, selling to people, then locating isn't for you and you should pay someone to do it.

Some may say that you shouldn't be in the vending business at all if you can't sell yourself - but that isn't really true. The most important thing about vending is customer service. Re-filling the machine promptly, keeping it clean, doing it with a smile, etc. Many people are good at this but just can't sell.

Anyway, I think the above jives with that Nam was saying - at least I hope so

Kevin

[nam]

Kevin,

Yes, we're in agreement. I'm only making a generalization and it won't hold true in all cases.

It's like the old saying "Look at the clock, time is money". Some things we're better off paying others to so we'll have more time to do something more productive. However some things I think are too important and too expensive to pay someone else to do for us. Locating is in that category in my opinion.

T Bird,

You're right in that the longer equipment has been placed the more likely it is to be a good location. Having sold existing accounts myself I know they also bring a higher price than newer accounts and rightfully so. I bought a group of machines from a seller who had paid over $20,000 for a relative few number of machines but were all located mainly in big name stores. The previous owner even had signed contracts with the locations for a specific period of time. Those large chain stores broke the contracts. Said they were having to scrape gum off the floor, etc..etc. My seller had to pickup those machines and yes could have sued those big bad chain stores that kicked him out. But at what cost, how long a wait and what chances of winning. I believe a business broker is no different than a auto or realestate broker. They all make their money from the sale. Buying this way is still a greater risk than locating your own machines. No snakes in the grass so to speak.

Bud,

I think if you were in the business of buying and selling cars, vending machines, houses or what ever, you are correct. If you have the time and ability to buy and sell a car, house or whatever then you're better off paying someone to clean, paint or do things like this rather than doing them yourself. This gives you more time to find other cars, houses, etc. to buy and sell. That makes you more money and probably not something you want to turn over to anyone else. I know of very few people I'd trust enough to give the authority to buy and sell real estate or anything major with my money. However, I'd be happy to pay someone else to wash the car, cut the grass or paint the house. The most important part of making the money I wouldn't farm out to anyone else. It's the same with locating your machines in vending. Your machines are your investment. The locations make the difference how much money you're gonna make. You can pay someone to clean them up, paint them, move them but the locating should be done by you. In my opinion of course and allowing for special situations and circumstances that always exist.

nam

[T BIRD]

That's why I feel very fortunate and blessed to be insulated from the risk of being deceited and cheated by purchasing this way nam.  These folks have chosen to take me under their wing.  I could not ask for a better situation. 

[nam]

Johnny,

It's nice that you are protected and insulated from the risks normally associtated with buying existing routes. Nothing I've posted has been anything specific but rather a general risk involved for anyone in the forum that may be considering such a purchase. I wish you the best and sure you'd have all your bases covered before you inked your deal. Trying to make sure everyone is as careful as there are as many horror stories buying existing equipment routes as there are with business opportunities. 

nam

[shvend]

I have never really had any dealings with locator's so I may not be fair with this.  We have nearly 1,200 machines out on location right now another I would say 200 in the shop being refurbished getting ready to go on location.  Everyone one of those machines has been placed by either my father or myself.  It was not easy by no means, with tracking down the right guy to talk to the 10,000 NO'S we received while placing the.  But we did not owe no one for those locations.  It is a lot more gratifying when you get the location yourself and I think people would take better care of the location if they got it there selves. 

I am not saying that people on this forum don't take care of there equipment.  I know they do if they didn't they would not waste there time reading my BS, but you all know who I am talking about.  It is just a better deal and feeling when you secure the location yourself.  When you place your first one yourself you will see what I mean. 

[the buzzing]

Practice makes perfect! Go Locating Today!

shvend, can you say it's safe to say, that the folks that said no to you; were ones you probably didn't want to deal with on a monthly basis anyways?

Also since you have 1000 locations, are there any locations you dread dealing with the owner's or manager's?

[BudLeiser]

shvend wrote: 

  We have nearly 1,200 machines out on location right now another I would say 200 in the shop being refurbished getting ready to go on location.

:shock:

[Jax Snacks]

Not sure if there is a right or wrong here.

I once worked with a very successful executive that told me that the key to his success was surrounding himself with people who compensated for his weaknesses. So to take a page out of his book, if you feel you need help with the locating or simply just hate locating, then find someone with that skill set to help you. The obvious problem is that most locators can not be trusted (see the locator forums). So maybe do a 50-50 split with you doing some of the work. At some point you will need to learn how to do it.

I divide things up by commission versus charity spots. I personally would rather concentrate on commission spots for myself. Most of my charity spots are from locators. I feel like I get a bigger bang for my time by focusing on the higher dollar commission racks rather than the lower dollar two head charity spots. Both are important to me, but I can only do so much as just one person.

Jax

[nam]

Luke,

Appreciate sharing your experience with us and what you have to say is certainly worth listening to. Locating and servicing that many machines makes you very high on the list of those that should be listened to in this forum.

I understand what you are saying as far as the feeling you get when you get a location your self. It is a high and gives you a feeling of accomplishment that can't come from having a locator get the location for you.

nam

[pdavid]

There are some locaters, like Midwest, that have connections inside corporations. Even the greatest self-locater is going to get nowhere with

some locations unless they know people on the inside. I've located almost all my locations myself, and will continue to do so, but I am very happy with Midwest's performance thus far.

[sbishop]

Jax

You are right. There are alot of people who fail in business because they tried to do everything. The key is to know your strenghts and weeknesses. Then find people who can help out where you are week.

Every situation is different. Just remember No One Will Care About Your Business Like You!

[shvend]

Practice makes perfect! Go Locating Today!

shvend, can you say it's safe to say, that the folks that said no to you; were ones you probably didn't want to deal with on a monthly basis anyways?

Also since you have 1000 locations, are there any locations you dread dealing with the owner's or manager's?

Tired,

Maybe I should clear things up a little bit, I don't have 1,000 locations.  Let's face it if I did I would not be on here right now I would be laying on a beach in the camons or having a beer with beer.  I have 390 to 420 locations that have anywhere from one to 17 heads in the location.  I count mine a little diffrently then most. 

To answer your question yes your correct the no's I do recieve are locations that I don't care if I get or not.  Don't get me wrong when I walk through that doors I have all intentions of bring that business some machines but it dosn't always work out.  Most of those folks are not that bright anyways. 

When I get a no at a location I look right at the person and ((excuse my french when I say this)) put a golpher eating grin on my face and look at them and say "You must really hate free money", and walk out the door.  I can only imagine what they are thinking after I leave. 

nam,

Thanks for the compliments!

[dperry]

This smacks of anti-kiyosakism! (Rich Dad)

If I can't hire out parts of this operation, then it will forever be self employment and never a business. Hopefully I can control the numbers and make the system work, without having to do all the locating myself.

What Rich Dad advocates is having a system to make money.  Whether you hire out or do it yourself, it's still a system and it should still make you money.

At what point do you hire somebody to run your entire business.  If you hire out to do your locating, you should prolly hire out to do your servicing as well.

There might be a time when you can grow your business so large that you can hire people out to run the whole business, but until then, you will have to do much of it yourself.  The more you do yourself, the more money you can keep in your pocket, or more money you can reinvest back into the business.

[the buzzing]

When I get a no at a location I look right at the person and ((excuse my french when I say this)) put a GOLPHER eating grin on my face and look at them and say "You must really hate free money", and walk out the door.  I can only imagine what they are thinking after I leave. 

Nice, I like those words, I'll have to try that out sson. Still 300-400 is a fair amount. Power to you friend, I can only image the time it takes to run such a beast. Keep rocking it.

[jaharra]

Regarding locating yourself, I've been looking around the Internet for a few resources and found a few that may be helpful:

Here is a book on amazon.com regarding this subject:

"Cash Locations: A step-by-step Guide to Securing the Best Money-making Locations for Your Vending Machines" by author by Ronnie Talent. It has a 4 star rating on Amazon.com

Here is a seller on ebay selling a CD training under title: "Vending Machine Gumball Candy 2008 Location Software CD", under seller id: larry6375       It's going for about $6 with shipping.

If anyone has either read or plans to read either of these, perhaps you could update the group.

[the buzzing]

Just FYI: I found this review on Amazon and it seemed helpful.

"An Extraordinary Waste of Money. I bought this product based on the positive reviews it received. I was horrified with it. On the first point their is very little writing per page. This is owing to the fact that the margins are large, there is a huge blank space at the top of each page, and the whole book is polluted with pointless drawings. Secondly, the writing is fluff and there is very little usable..."

"Published 18 days ago by Tom"

 

Here's a second comment by a buyer.

"Basic tenets hold true for any business. I was hoping it would include more tips for snack machines that don't have ties to charities. "Third, $20 is a rip-off of the highest order."

There's a few mixed reviews on this book...I guess if you're willing to gamble $20 it could prove usable. Whoever has it, I'd be willing to send you five via pay-pal to get a copy of it.Thanks

 

 

[Jax Snacks]

Yea Tired, Ronnie Talent's stuff is light on substance and heavy on fluff! Most of his stuff is simply common sense and I learned very little from his book (and that was 5 years ago).

A decent book I first read  was Vending Success Secrets by Bill Way.  Not a perfect book, but good enough to get started with.  Unfortunately he promotes 8-select U-turns as well!

Jax

[the buzzing]

Jax,

Nice, appreciate the feedback...Just reading through this forum and networking with others like yourself has provided the needed Vending 101. The big one I was struggling with was paying these owners or not paying them...I've learned it depends on the location. If you pay a place and it only does 10 a month then remove it, unless it's a freebie. I also give these owners product to munch on. I've gotten free food or discounts for services from being talkative. It’s just a networking game...You have to be friendly and try and smile when possible.This is by far the best forum to grow from.

[the buzzing]

Has anyone read Rob Farnham's book?

[BanderSnatch]

i would do it my self bro, just have guts & talk to the business owners out there. Think like this "If they say no, big deal? i'll probably never see those guys again, so I shouldn't be embarrassed"

Also- What i'd do is, Get a list of locators & just call them up & ask for there advice, you'll for sure get atleast 1 guy nice enough to give you some tips on how to get the good locations, & how to get machines in those franchise type places.

haven't done that yet, but I plan on doing so. I'm sure a few guys will not want to tell me anything, i plan on either calling guys that are some where far away, so they couldn't help me even if I wanted them to, or just calling them & saying "dude i'm pretty broke, I have financial responsibilities, i'm calling you cause i'm running low on options, please understand, God will multiply what ever it is you give me (advice/time) etc..

I have asked other business owners for advice & they talked to me for like hours dude telling me all about there business. But thats like guys who own restaurants etc.. I'm just curious you know? so I ask them about their business, start up costs, overhead etc.. what ever, advice for motivation etc..

But yeah dude- i'll bet that'd be a great thing to do

also i found Tomy Gacha machines for $400, junior tomy's for $200 & Winny the pooh toys too

all right here www.MyTomyGacha.com

[the buzzing]

 Think like this "If they say no, big deal? i'll probably never see those guys again, so I shouldn't be embarrassed"

This is priceless, I'm pumped; I feel like I'm at a Tony Robbins seminar!