New guy

[NOTTHATGUY]

Hey there. New to the forum, not really new to coin op or vending.  Just stumbled on this place, figured I would say hi and see what its all about. 

[AZVendor]

It's all about vending and is the best forum for that on the interwebs.  I was in vending for like 20 years before I stumbled on it myself.

[Fermo Vending]

8 hours ago, AZVendor said:

It's all about vending and is the best forum for that on the interwebs.  I was in vending for like 20 years before I stumbled on it myself.

How'd you gain so much experience? Did you work for a company before starting your own business? I kind of jumped in head first for an additional stream of income. Started 14 months ago and have learned a lot, but feel like there's a TON more to be learned. Any tips on picking up industry knowledge faster?

[AZVendor]

I got in with 5 soda machines and added 10 more over the next 8 months or so.  It just organically grew from there.  Help from a mentor, locations where friends worked, word of mouth, etc. It really helped that I am mechanically inclined. We eventually grew to 300+ machines within about 7 years.  We ran 3 trucks from a warehouse large enough for machine storage, inside truck parking and with a loading dock for the pallets of product we would get. Of course a lot went on in between 5 and 300 machines but we could run it all with just 5 employees including myself.  We had a refrigerated candy/ pastry room, commercial refrigerators and a secured cash room.

The best way to learn is as an employee of a vending company but now that you're in it you will just have to learn from experience.

[Fermo Vending]

Wow what a story. What kind of certifications did you have? CDL and universal EPA license? 300 machines must have been a doozy; am I correct in assuming you're retired now?

 

Yeah kind of a trial by fire for me. Started with one combo last April and added 8 more since then. Working on maintaining the locations I have for now to build up some capital, and then hoping to expand. 

 

I worked with my father for a while who owned a heating and air conditioning company, so I have some mechanical experience in that sense and it's been a huge help. Also working with him helped me learn how to communicate with customers and potential accounts. 

[AZVendor]

That would be good experience for you.  I worked retail management for several years before and during my beginning but face to face with customers really taught me how to work with people.  My only certification was high temp refrigeration so I could work on customer compressors after I sold my company and went into street repairs. We ran our routes from 14' Isuzu NPRs (no CDL required) that were insulated and refrigerated so our candy and pasty could sit out on shelves.  Here in AZ the box refrigeration was far more professional than most of the competition.  I am now out of the business but keep my hand in here on the forum.  I know garage doors now and trailer repairs as well.  I have had real jobs since 2015 so I've made more money than I ever did in the vending business.  Yes, even with 3 routes, 300 machines and over $1M in sales I only paid myself $500 per week.  It's a tough business with teensy weensy margins.  My customers made more from their commissions than I ever made.

[Fermo Vending]

Wow shocked to hear you could only pay yourself so little. We’re your expenses that high? How often were you offering commission and how much %?

[AZVendor]

You have to remember this was back in the 90's and I wanted to put all my profit back into the business to grow it.  I did use the profits to eventually pay for a new truck and some of the profits put in a new kitchen, rebuilt a shed and relined my inground pool.  Commissions ranged from 10% to 20% depending on the account.  Warehouse rent, utilities, machine repairs, employee wages, taxes, benefits, product sales tax, equipment payments, insurance and commissions ate it all up.  It's an expensive business to be in.  You have to spend money to make money and I spent a lot.  I was in the no-mans land of being a small vendor vs. being a much larger vendor. 

Later on, in the late 90s I downsized and had just enough accounts to run by myself and I made more money than when I ran 3 routes.  By that time all machines were paid for, the truck was paid for, I worked out of my house again and the profits were all mine.  Small is good. But at the same time, I was burned out on running routes, emptying my truck every day and having to restock it every day. I had lost my desire to work 60 hours per week.  So I sold it and went to work for a repair company where I could work on other machines that I never ran.  When they went out of business a year or so later I went out on my own and ran street repairs, moved machines and bought and sold machines for many years. 

[Fermo Vending]

4 minutes ago, AZVendor said:

You have to remember this was back in the 90's and I wanted to put all my profit back into the business to grow it.  I did use the profits to eventually pay for a new truck and some of the profits put in a new kitchen, rebuilt a shed and relined my inground pool.  Commissions ranged from 10% to 20% depending on the account.  Warehouse rent, utilities, machine repairs, employee wages, taxes, benefits, product sales tax, equipment payments, insurance and commissions ate it all up.  It's an expensive business to be in.  You have to spend money to make money and I spent a lot.  I was in the no-mans land of being a small vendor vs. being a much larger vendor. 

Later on, in the late 90s I downsized and had just enough accounts to run by myself and I made more money than when I ran 3 routes.  By that time all machines were paid for, the truck was paid for, I worked out of my house again and the profits were all mine.  Small is good. But at the same time, I was burned out on running routes, emptying my truck every day and having to restock it every day. I had lost my desire to work 60 hours per week.  So I sold it and went to work for a repair company where I could work on other machines that I never ran.  When they went out of business a year or so later I went out on my own and ran street repairs, moved machines and bought and sold machines for many years. 

Ah our good friend inflation. How could I forget? Just looked at what $500 in 1990 would be worth today and turns out your weekly pay wasn’t so bad hah.

 

Small is better for now IMO, since it’s just me and I have very little over head the profits are all mine. That being said I only started making money 2 months ago and have yet to pay myself.

 

When you downsized was it a matter of quality locations over quantity? I think I’m fortunate bc all of my locations gross at least $450 a month so far. I bet a lot of vendors start with locations that make a lot less, but that’s a total guess.

[AZVendor]

Yes, most vendors, not knowing what they are doing, never get to a $450/month location so you're doing pretty good there.  I downsized when I failed to win my Postal service contract again and then Worst Vendors (AKA Best Vendors, a horrible vending management company) decided that the substantial amount of quality retail locations I had (some of which were my own before they contracted with them) needed to be handed over to Inland Empire Vending from Kalifornia because they got in bed with each other.  This all had to do with Canteen being in bed with Best Vendors as well. Eff them all.  Between vending management companies and "Services for the Blind," independent vendors really take it in the shorts sometimes. 

[Fermo Vending]

1 hour ago, AZVendor said:

Yes, most vendors, not knowing what they are doing, never get to a $450/month location so you're doing pretty good there.  I downsized when I failed to win my Postal service contract again and then Worst Vendors (AKA Best Vendors, a horrible vending management company) decided that the substantial amount of quality retail locations I had (some of which were my own before they contracted with them) needed to be handed over to Inland Empire Vending from Kalifornia because they got in bed with each other.  This all had to do with Canteen being in bed with Best Vendors as well. Eff them all.  Between vending management companies and "Services for the Blind," independent vendors really take it in the shorts sometimes. 

I don’t understand- how could another company demand you hand locations over to another company? I understand losing the contract, but I assumed you would just lose those locations and the other company would place their own machines.

 

services for the blind has all of the rest areas on the parkway in New Jersey. Is this legit?

[AZVendor]

Yup.  Services for the Blind always have first refusal for food service in state and federal locations because of the Randolph/Shepherd Act.  Also in some local government locations as well.  They even have first refusal for Postal facilities.  That's how I lost that one.  The blind operator in the postal cafeteria wanted to do all the machines I had in his building and in all of the buildings around Phoenix. It didn't matter to the Post Office that I would have to lay off two of my three drivers because of their one blind operator and his minimum wage morons.  To make matters worse, the Blind operators also get free machines from the government, free cafeteria equipment, free cafeteria remodeling, free storage facilities inside government buildings where required, and the first product fill of all machines. In return, the operators pay just 10% of their gross to the agency administering the program in each state which covers repairs to the machines.  Then the machines are routinely retired after about 5 years of service and new ones are installed.  It's quite the scam being played on America and actual vending operators that employ people at living wages. 

As to Worst Vendors, when they sold their "management 'service'" to the corporate level of a major retail account I had a contract with (9 locations and 45 machines), they agreed to let me live out the contract while they determined whether they would allow me to continue beyond the contract for servicing the locations.  They realized we were good and knew what we were doing so they let us stay.  The local locations didn't like it because the commissions I paid to them were then paid to Worst Vendors instead because that was how they made their money.  The retail corporate office had so many complaints about the stores not having the money for their Xmas parties that corporate had to give money to every store employee association for that purpose.  The head-nod agreement with Worst Vendors paid off for a few years as they fed me a bunch of more retail accounts around the valley here, some good, some okay. I knew I didn't own the accounts and that they could kick me out whenever they wanted to - and they did.  Just so they could give Inland Empire Vending a foothold in Phoenix.  And they admitted this to me. So I pulled all of that equipment and Inland put their crappy stuff in.