how do you respond to places trying to bump commission?

[jay22]

i guess i've been lucky, but out of all the locations i've had, i've never had this happen until yesterday.  the dude doesn't seem like a bad guy, but he's 100% profit driven, and wants to maximize everything.  it's an indoor sportsplex, mainly baseball/softball that has an ok hot season for half the year, and is dead for half the year.  i have a single head gumball machine there at 25% commission to him, and it's only worth it to me for the hot season. he has an arcade guy who does other machines there (they go 50/50)so he didn't want the bouncy balls(i normally do 2 headers with gum and bouncy balls). for whatever reason, we had an incredible month, and the machine emptied after one month which has never even remotely come close to happening.  this is a rhino pro, so it's like $122 in the machine.  he texts me yesterday to come fill it, and then says "When are you going to upgrade me to 50/50?!?!?!" his logic was that because the other guys gives him 50, so should i. i was kind've taken aback at that approach, but the good thing was it was through text so i had time to think of a response.  i literally sent him a text back showing him the numbers, and nicely explained that even though i was grateful he lets me have the machine in his facility, it wouldn't make sense for me to do that, and would basically be bending over backwards.  he seemed to understand, wasn't mad, and didn't push it.  i encouraged him to bring in his own and keep 100% if he wants, but i wasn't going to change it up.  he said i could keep it for now, but might look into making changes next season.  overall, it went well, but i'm always going to feel a little uncomfortable going in there to refill knowing that the guy wants more from me. how do you guys react to this? do you hold strong, or cave? i'm happy he didn't ask me on the spot while i was there.  i don't think i would've caved, but i wouldn't have had the time to think about it first and been able to make it as clear to him why it wouldn't be worth it for me.  

Edited February 11, 2023 by jay22

[AZVendor]

Why would you suggest he do his own machine?  Talk about shooting yourself in the foot.  As to the 25%, you sell a product and have the costs associated with that.  Video games do not.  Your price point is ridiculously low, if even at .50, so there isn't room for more.

[jay22]

5 minutes ago, AZVendor said:

Why would you suggest he do his own machine?  Talk about shooting yourself in the foot.  As to the 25%, you sell a product and have the costs associated with that.  Video games do not.  Your price point is ridiculously low, if even at .50, so there isn't room for more.

because i don't care for the bad vibes.  i'd rather relocate to a place where the owner is happy to have it, then keep it at a spot where i feel the owner is greedy.  dealing with greed is only worth it to me if it's a great location.  this is a good location for half the year.  i want to keep it, but i wouldn't hate losing it.  also, i'm not telling him something he doesn't know anyway.  i'm sure he understands already he can do his own thing if he wants.  i'm basically just making it clear i have no intention of raising it.

Edited February 11, 2023 by jay22

[gumball guy]

2 hours ago, jay22 said:

i guess i've been lucky, but out of all the locations i've had, i've never had this happen until yesterday.  the dude doesn't seem like a bad guy, but he's 100% profit driven, and wants to maximize everything.  it's an indoor sportsplex, mainly baseball/softball that has an ok hot season for half the year, and is dead for half the year.  i have a single head gumball machine there at 25% commission to him, and it's only worth it to me for the hot season. he has an arcade guy who does other machines there (they go 50/50)so he didn't want the bouncy balls(i normally do 2 headers with gum and bouncy balls). for whatever reason, we had an incredible month, and the machine emptied after one month which has never even remotely come close to happening.  this is a rhino pro, so it's like $122 in the machine.  he texts me yesterday to come fill it, and then says "When are you going to upgrade me to 50/50?!?!?!" his logic was that because the other guys gives him 50, so should i. i was kind've taken aback at that approach, but the good thing was it was through text so i had time to think of a response.  i literally sent him a text back showing him the numbers, and nicely explained that even though i was grateful he lets me have the machine in his facility, it wouldn't make sense for me to do that, and would basically be bending over backwards.  he seemed to understand, wasn't mad, and didn't push it.  i encouraged him to bring in his own and keep 100% if he wants, but i wasn't going to change it up.  he said i could keep it for now, but might look into making changes next season.  overall, it went well, but i'm always going to feel a little uncomfortable going in there to refill knowing that the guy wants more from me. how do you guys react to this? do you hold strong, or cave? i'm happy he didn't ask me on the spot while i was there.  i don't think i would've caved, but i wouldn't have had the time to think about it first and been able to make it as clear to him why it wouldn't be worth it for me.  

If a location is a solid performer and it is convenient to my route I will pay up to 50% commission on gumballs because I'm still making money. I also run 2 for 1 gumballs in locations with multiple competitors and do fine with it. If this were my stop, I would've bumped him to 40%, made it clear to him that this really hurts my bottom line but I want to try to help him out and go from there. Odds are he would never bother me again after that. Location owners like this are indeed uncomfortable to work with because they are always sizing you up when you are dumping money. You can tell that it kills them to see anyone else making a dime under their roof. I just treat em kindly like I do all of my other customers and always remember that the worst thing that can happen is you have to carry your machine out with you.

[AngryChris]

In arcades, your profit is the same as your revenue after COGS, whereas it's not in gumballs.  You could possibly argue that you are already giving some number... say... 42% of the profit after COGS.  So you could say you are already close to 50% anyway or even say that going from whatever you are now like 25% to 33% would basically be 50% split in profit.  You could use that to make your case that simply bumping you up 8% would make it fair.  It wouldn't be a huge impact on your numbers and you could buy some time to keep the account longer to milk it.  It may not work out this time but for future it could.