3rd party vending

[sbishop]

I read the vending uncles ebook and he said that if he could start over, he would go the 3rd party vending route.

Is anyone doing this? how is it going?

When I was a teenager, my parents got a coke machine for their flea market. They were given the option of coke doing everything, or of them doing it themselves, as long as they bought a min number of cases per week. My dad chose the do it your self option. He bought the min from them each week and bought the rest where ever he could get the best deal.

I like the idea of getting free machines. Tell me what you think and if you are doing it or not.

[G-Vending]

I just bought a route that has 4 machines 3rd party.

I will be replacing them Wednesday with my machines..

[sbishop]

Can I ask you why? If coke(or pepsi) is willing to provide free amchines why note use them?

[alyssamma]

I have a friend who does this and he loves it. However, here is what I have learned:

1) Some are easiers to deal with than others (e.g., Coke, Pepsi, 7-UP).

2) Depending on where you live, you might get a quick response to fix a problem w/your machines, or it might be a couple of days.

3) You need to have good locations, or a lot of locations, to meet the min orders.

4) Since you must buy from them, your profit margins are lower, but you don't have the initial cost of the machines.

Kevin

[G-Vending]

They charge like 40 cent for cans right now

Walmart is selling 12pks for $2.75 do the math.

[alyssamma]

All of the people I know who do this buy bottles and not cans from them.

You do pay more (and therefore make less of a profit), but don't have the expense of the machines which can be significant.

You also don't need to worry about fixing the machines.

Kevin

[ANDERSONVENDING]

To do 3rd party with Pepsi down here you have to have a commercial business thats climate control ,in your business name,no storage lockers.

John

[G-Vending]

The problem I am having is you can only buy 20o/z from Pepsi /Coke you can not buy them from Walmart.

I want to do cans in the first place..Also you have to buy like 10 case min. at a time per machine..

In the long run I will buy my own machines and buy drinks on sale at Walmart Or Target..

Plus if you buy from Pepsi / Coke in Arkansas you pay sales tax plus a soft drink tax.

[ageevending]

Coke and Pepsi are not giving away machines like they used to.

First you have to have enough volume to support the minimum purchases.

Second you HAVE to sell bottles.. this is a deal breaker right there.

Third, good luck with getting a machine in less than 30 days and problems with machines MUST be fixed by coke/pepsi techs. They will not be out there the next day.

I have two coke machine owned by coke... took over 30 days to get the machines and then one was the wrong machine. 90 more days to get the right machine.

I'm required to purchase 15 cases of products each month for the machines... @ .87 a unit, which is ok and I can move the product, because I use the product in my other locations... If these were the only locations I had I have 8 cases of flat product a month.

[sbishop]

Thanks for the insights and experiencies

[vendnoob]

i live in michigan and have 2 thought pepsi and 1 though coke. pepsi requires a 15 case munimum. i only order when i need it. i dont need to order every month or every week. coke has a 10 case minimum and i order only when i need to. as far as repairs go coke is johnny on the spot. you call them and they are out buy next business day. and pepsi ive never had to worry about repairs either (i have to good friends that are repiar men for pepsi). the only part i dont like is you cant find 20oz pepsi anywere but though pepsi (unless you go to a gas station or convienence store and pay about $1.50 per bottle). i have found coke and diet coke in 20oz at sams club for about the same price i pay direct from coke.

[Rustinm]

Vendnoob,

Was it easy to set everything up with pepsi and coke? Where do you have to go to get into the program. I have been very interested in this setup for a while but i really wanted to talk to someone in michigan who had some experience here in my state. What kind of information do you have to give them? Business id stuff? Tax id stuff? All the legal bs it the stuff i need to learn because as of now i know nothing about it. Any info you could give me would help a lot.

Thanks

[vendnoob]

yes it will need to be run as a legal business. lucky for me i didnt need to do all the leg work because i baught these accounts from another vendor and just had to call and transfer them to my company. here are the #s i have. coke 1-800-845-5156... pepsi orers and delivery 1-800-963-2424 and pepsi equipment service 1-800-845-4782.

i hope this helps you.

[alyssamma]

Rust, don't sweat the business stuff...it is easier than you think. You can set up an LLC and not file anything extra other than a Sched C when you file your 1040.

Kevin

[Rustinm]

Alyssamma,

My problem is that i havnt filed anything yet, and i really dont want the irs coming after me. BUT, i also dont want to pay anything yet if i can get away with it, at least for this year so i can actually focus on getting all my machines out 1st. When i do file, how will i estimate what i will owe in taxes?

[alyssamma]

Well, I'll answer for the IRS...not sure of MI specific state laws. You don't have to file anything (other than your 1040) for them. The whole LLC thing is for your protection and nothing else.

Also, the IRS is good about estimating taxes. Here is the rule. If you pay at least what you owed last year - no worries. So, if your total tax liability for 2008 was $1000 (I don't mean what you owed after withholding, I mean what the IRS said you owed in taxes before subtracting what you had withheld), just pay at least $1000 in 2009. If you end up owing $5K, you'll have to pay the $5K, but won't owe any penalties. And, of course, for 2009 you'll have to make estimated payments of $5K total to insure you won't get penalized for 2010.

As for what you'll owe this year...no problem. Get TaxCut (or TurboTax) in Dec and estimate what your 2009 taxes will be. If you will owe more than $1K or more than 10% of your total bill, make an estimated payment in Dec.

Kevin

[spdydre]

I am looking into getting into full line would 3rd party vending be an option for me to start out? I have some money to start out and purchase maybe a machine or two but I was wondering if they would allow a first time business owner to start out just doing 3rd party? Or is it better for me to just purchase my own machine and start with that first then move to 3rd party vending.

[tooldini]

I have been wondering about this also for some time now. So if you are dealing with say Pepsi you find a location that must be suitable to them and they would deliver and set up machine. You basically just restock it after that?

[alyssamma]

Tooldini, correct.

[tooldini]

Cool I wish I could just take over the accounts at my local schools I work for. They pepsi,coke and seven up guys are just slightly better than terrible. They let the machines stay empty for weeks at a time. I watched a powerade and juice machine empty several times at an elementary and each time it took 3+ weeks to fill it. It would empty in like 2 weeks or less. Also most machines in the lounges empty and stay that way for weeks. It is terrible and I would love to have those accounts.

[sbishop]

Well to kick up an older thread of mine....I have called coke and pepsi about 3rd party vending. I have an appointment tomorrow with a rep from Coke. I'll let you know what he says.

[tooldini]

Heck yeah keep us posted. Hope it goes well