Waverly's Vending World

[mxer518]

I would not be so quick to pass on a location that is only doing 20$ per week especially if you are not paying for machines, locations liek that are what I built my business from and without them I could never be in the position I am in today, if they ever become to much of a bother spread out the service cycle and then later sell the locations to a newer vendor who would be happy to have them.

[WillisNYC]

Hi Mxer,

I take your point about the $20 per week locations, however the locations I am talking about are doing WORSE than that.  WORSE yet, I have my own machine on there rather than 3rd party!

I paid $750 out of my own pocket, plus the cost of moving the machine and placing product in it.  At $5-$10 per week, I don't see how it can pay for itself in any reasonable time.    I have two others that I also own that are only doing $15-$20 in their first couple weeks of operation.  They are ones I am watching closely and may keep in place, but I have a strong urge to move them as soon as I can.  I am growing VERY RAPIDLY right now.  I put in 3 new locations yesterday.  I have to put in 4 more next week and 2 more the week after that.  I also have 22 additional service stations to place equipment on in the months of April and May.  I no longer have a 3rd party coke agreement and am currently only working with Snapple 3rd party.  Snapple works great as a second machine on a location here, but I am not sold on putting it on a location as the sole machine. 

And oh yeah, I have verbal approval on a deal to buy 80 additional machines already placed in a route and that deal closes in the middle of May. 

WIth all those locations to 'choose' from coming up in the next two months, I see no reason  to keep this lousy $5 per week performing machine. 

I also have a couple 3rd party machines that only did about $20/week over the winter, but they each averaged around $50 last summer/fall.  I never dreamed of moving those and would keep them in place until told that I have to leave.  If the new location had that kind of promise, I would not have moved it.  However, I didn't feel that it had much hope of EVER doing $50/week if it could not do more than $11 in a week that had my top machines doing over $100 and my two 3rd parties mentioned above doing over $50. 

[mxer518]

One thing to keep in mind that i deal with on a daily basis with other vending besides full line is when you get an account with someone like the gas station owner who has a ton of stores you are going to want to give him a portfolio package. Meaning that you will service every single one of his stations and pay him one commission check per month, by doing this you are going to have to deal with some read bad performing locations as well as some superstars but that's the cost of being able to take over the entire package. And please make sure you are getting installation agreements if you are floating as ton of your own money on these locations, if you need I can send you the one that I use it has a 36 month term with a built in 24 month auto renewal and a non compete for the entire length of the agreement.

[WillisNYC]

Hi Mxer,

Yes, the deal that I made with the owner is to take over all 30 of his locations and I have to take the good with the bad.  Since many of his locations are excellent, I don't have a problem with that.  I only have the deal based on a two week 'placement agreement ' that he signs for every single location as equipment goes in.  However he has agreed to the non compete part of the deal as well.  That is why I am waiting to place equipment  until after my competitors equipment is removed.    The owner was not willing to sign a long term agreement, however I am confident that I can switch him over after he has worked with me for a couple months on the first 8 locations that we agreed to start with.  So I would love to see the paperwork you have used and maybe I can use it as a template. 

[mxer518]

PM me your email address

[WillisNYC]

Must say I am tired but satisfied after this last week.  I put 5 new machines into action on 4 new sites.  2 of the machines doubled up my most successful service station sites.  I removed one unsuccessful machine from its location and moved it to a new service station.    Two of the machines are the first of my new snapple 3rd party machines.  One was a coke 3rd party turned over to me by the big service station owner.  I put  two new soda machines on service station locations.  I also did my first move using myself and one hired hand from the local 'amigo' hiring point.  I picked up the one machine from the bad location as well as the two new soda machines I bought off Craislist.  These three went on 3 new service station sites.  Snapple delivered two new machines to two of my three most successful service stations.  I also moved one of these Snapple machines to a new location outside the normal delivery area that my Snapple distributor services.  The truck rental , rental of a pallet jack, plus gas and the hiring of the amigo cost was less than half of what I was quoted for moving the 4 machines by my usual mover.  That move, plus the setup of the new machines and the normal servicing leaves me tired but looking forward to adding yet more revenue to my burgeoning route.  All this growth gives me added inspiration to get out of the cave and start servicing the new locations next week. 

[G-Vending]

Must say I am tired but satisfied after this last week.  I put 5 new machines into action on 4 new sites.  2 of the machines doubled up my most successful service station sites.   I removed one unsuccessful machine from its location and moved it to a new service station.     Two of the machines are the first of my new snapple 3rd party machines.  One was a coke 3rd party turned over to me by the big service station owner.  I put  two new soda machines on service station locations.   I also did my first move using myself and one hired hand from the local 'amigo' hiring point.  I picked up the one machine from the bad location as well as the two new soda machines I bought off Craislist.  These three went on 3 new service station sites.  Snapple delivered two new machines to two of my three most successful service stations.   I also moved one of these Snapple machines to a new location outside the normal delivery area that my Snapple distributor services.  The truck rental , rental of a pallet jack, plus gas and the hiring of the amigo cost was less than half of what I was quoted for moving the 4 machines by my usual mover.  That move, plus the setup of the new machines and the normal servicing leaves me tired but looking forward to adding yet more revenue to my burgeoning route.   All this growth gives me added inspiration to get out of the cave and start servicing the new locations next week. 

In my part of the world there is not a lot of service stations left..lol    you are talking about gas stations?

Around here it is c-stores pump your own

[mxer518]

NJ is still quite different than many other states, in fact I believe that you are still not allowed to pump your own gas.

[WillisNYC]

Mxer is correct.  You are still not allowed to pump your own gas here.  I have focused on service stations that do not have convenience stores near the major highways near my hometown.  Those efforts have finally gathered up steam in the last couple months and I am picking up a lot of them lately.    I stay away from the convenience stores since most of them see my machines as competition.

[WillisNYC]

Large office, $791

Snack only, $145

Public works, $131

Small office with snack and soda, $67

Warehouse soda, $14

Assisted living 1, $320

Assisted living 2, $144

Service station 1, $157

Service station 2, $91

Service station 3, $271

Service station 4, $11  and moved so it will not appear on next months list

Service station 5, $284

Service station 6,  $52

Service station 7, $41

Service station 8, $23,  moved equipment next to the pumps for better visibility, it HAS to do better

Service station 9,  $164

Service station 10, $266

Service station 11, $68  not bad for first two weeks

Service station 12, $47  been in service for just over a week

Service station 13, $48  been in service for just over a week

Service station 14, $88  not bad for two weeks, but I hoped for better!

We really only had one hot week this month and it rained heavily on the last two weekends driving down the station sales.  This weekend is supposed to be 90 degrees and I hope it stays there for the whole month.

Still waiting for the old vendors machines to be removed from 3 service stations in which I have one 3rd party machine.  The mechanic sold his business and nixed that deal.  The school told me that they are giving the present vendor 'one last chance' to pick up his service or he is gone.  The manager I was in contact with did not make the decision to let the present vendor stay.  She told me ot call back in a couple months since she has no confidence that the vendor will change his ways.

I am still playing footsie with Mr. Big trying to get him to give me the other 22 service stations.  I think after I pay him his commissions for April he will begin letting me in more stations.  We will see.

I have been negotiating the details of the 84 machine deal for most of the month and we are still set for closing on May 17.  The addition of that route is going to bring big changes to Waverlys!  My brother in law is providing half the capital to buy that route and he is also buying half my current route so that he is a full partner in my business.    Combined, the two routes will gross around $250,000 a year and provide us both with full time jobs.  He will be servicing as much of the route as he can so that I can focus on locating.  Within a year I hope that we are busy enough that  we will need to bring in a true route driver.  In the meantime I will service whatever locations he cannot get to during the week and serve as 'fireman' to go solve whatever problems come up during the week.    Once the deal gets done and I have a minute to breathe I will post the deals details.  If you followed my comments in a  thread about 'valuing a route' you will see how closely my deal follows what I laid out here:  http://vendiscuss.com/forum/index.php?topic=8885.0

50% of gross deals that include some owner financing, machine readings income verification and great locations do exist if you keep looking hard enough for them!

[mission vending]

Congrats on your success!!!!!!!!! You are going to be a vending guru pretty soon.

[spdydre]

Congrats!  You are making some big jumps in a very short time. 

[WillisNYC]

As I alluded to in my last post, I have been negotiating a big deal for approximately 84 machines or so.  They are all located very close in most instances to locations that I am already running here in central New Jersey.    The gross income from the new locations will be $200k and the owner is willing to guarantee that number.  If the first years sales drop below 5% of $200k, he will lower the sales price by whatever percent the income drops.  I have examined his records and he has in some cases, 17 YEARS of machine readings.  95% of his numbers are based on machine readings going back to the locations inception.  So I am reasonable confident that the numbers will add up properly when we take over the route.    The father who works in a different business, started the vending business in his 'spare' time.  As the business grew, his son took over and grew it to a full time business with several routes.    I am only purchasing one of his 'routes'.  The son is getting married and going into his new wifes family business and so the vending business needs to be sold in order to be properly taken care of because it is too large for them to run on a part time basis.  The route I am taking over is also the farthest from their 'home base' and so it benefits both of us as far as location goes.    I also got them to sign a ten year noncompete agreement as part of the deal in case one or both change their minds. 

The deal also includes a van (which my little Toyota Corolla will greatly appreciate) and ten unplaced vending machines.  The sellers also agree to 'consult' a bit as needed to retain accounts or help me repair some of their machines that I am unfamiliar with.    The machines and the van are worth $15k on the conservative side.    The price is $125k total of which the owners are financing $50k.  The financed portion of the deal will be paid out in 25 payments over the next 25 months with no interest. 

In order to finance the deal I am bringing my brother in law on board  and he will serve as the route driver for the majority of the stops.  This enables me to continue expanding the business and serve as 'fireman' and helping him as needed.  I am married to a Chinese lady who is a relatively new citizen.  Knowing how hard she and her sister are willing to work, I am confident that my brother in law will be a diligent worker whose only drawback is weak English skills.  I just have to teach him how to call me and put whoever he is talking to on the phone when necessary. 

I also need the brother in law if I wish to continue expanding.  Having him service the route allows me to concentrate on sales once the new route is up and running properly.  I also needed his help to finance this deal.  It was going to be a much smaller deal if my wife and I did it alone as we originally considered.  However her sister and brother in law finally got on board so we could do the bigger deal and make it a 'family affair'.   

The best part of this deal is that it complements my current, already tightly knit route.  Traffic is bad enough in central New Jersey and I always wanted to avoid NYC and its close environs because of the bad traffic there.  The new route complements mine very well and stays away from NYC.  Thus I quintuple in revenue while only doubling or so the size of the area that I cover. 

I also got Coke to negotiate a better pricing deal that enables me to hit the 'targets' that they have set for my 3rd party vending agreement with them..  This will also enable me to restart getting machines again after a few months of increased ordering.

On a lighter note, 4 of my service stations did more than $100 this week and one of my indoor machines came very close as we had 90 degree heat again for the past weekend and close to that for a lot of the week!  That made this week my biggest collection week ever by far.   

With the addition of all the new locations, I doubt that I will be able to keep updating the figures here as I have been in the past.  I will have to think about how I want to handle that going forward.

[mxer518]

So when you said that coke shut you down on getting additional machines it was because you were not meeting the minimum case requirements of the gold. silver and bronze packages? All this time I was nervous that it was because they were just shutting down the third party program but that makes sense now if you were not buying the required amount to be eligible for third party.

[WillisNYC]

Yes, I just found that out Mxer.  They didn't explain that earlier when they told me no more machines.  I finally had a 'sit down' with the area manager and he explained it to me.  I explained that they had misled me about the availability of the machines in the past when I was told I could get a glass front and then told that I could not get it.  The manager told me that they did not give more equipment  because I was not ordering enough product.  After we straightened that out, they told me I could get more machines if I was meeting the minimum orders they wanted from me.  So I brought it on myself although they never explained that to me until I had the meeting with the manager last week.  Sorry to have worried you but I was originally told that "No one is getting more machines.'  not anything along the lines of 'You are not ordering enough product to deserve more machines.

[mission vending]

That's good news for a lot of folks, thanks for the clarification.

As for your revenue updates how about making some groups and putting up the total for the group?

[WillisNYC]

I am now one week into the large purchase of 85 placed machines that we just made.    After visting all but 5 of the locations this past week and servicing my ongoing accounts, I have one word: EXHAUSTED.  My brother in law and I have worked 7AM to 11PM every day since Monday to get this route inspected, inventoried and fully changed over.  Today I am done servicing at 3PM and getting ready to load the van for the finish of the inspection tomorrow.  We have gone together with the owner  to nearly all the locations and my experience so far has been a happy one.  Ok machines but many excellent revenue generators that have been in place for many years.  Decent pricing and good relationships with most of the business owners or facilities managers.  The owner was employing a 'driver' to run this route for the last year and we have found MANY, MANY things that he has been doing wrong.  Not rotating product, putting multiple rows of the same chips or cookies when it was not called for, putting soda bottles next to the condensors of the soda machines and the list goes on and on.  However, all these things are things that we fixed immediately and now expect to help increase our revenue from what this 'driver' did last year.  He was paid a straight salary and his lack of motivation about the route was obvious.  These locations are thrilled that they are getting a new 'guy' to fill their machines.    I will post many more comments as the weeks go by and update you all on how this purchas is going, but for now I am exhausted but very pleased with the route that I have purchased.  I am off until I get a few more spare minutes later!

[WillisNYC]

It is now been five weeks since the purchase of the new route.  Lots and lots of things have happened during the course of those weeks.  I had brought on my brother in law as a partner in the business when we bought the new route of 85 placed machines.    He supplied 50% of the purchase capital we put down for the route and was going to be the primary 'driver'.  I was going to be the route 'fireman', salesman, bookkeeper and  purchasing/managing agent.  At the four week mark that plan went by the wayside as my partner called it 'quits'.  He said his back was too sore to continue and he wanted out before he broke down permanently.  We also had some philosophical disagreements as our personalities are very different.  However, even though he has pulled his labor effort, his capital is pretty much held captive at this point.  I am going to run the route myself and slowly pay him off as well as the guy we bought the route from.  In two years, the route should be entirely paid off and I will be making a tidy profit the whole time as well.  The numbers for the new route are coming in almost exactly as expected.  The collections are currently coming in at a level that will meet the guarantee at a 105% level or so.  Unless it falls to 90%, my payments to the seller will not be adjusted.  My own original route is also doing very well.  A couple of the new service stations are doing VERY well.  One service station with a sole coke machine did $249 a couple weeks ago.  Snapple finally brought a machine to that location and this week will see the first full week with both machines on location.  A bp service station did $250 in 5 days with a coke and snapple machine this week.  With the addition of 4 more machines on 3 locations last week (two new) and the advent of hot weather, my original route has nearly doubled its income since the month of May.  One of these days I will find time to post the details, but I am just giving highlights for now.    The income is coming in quite strongly and I am very pleased with the progress.  I also managed the route on my own for the first week and wasn't nearly as exhausted as I was the first week I took over the new route and had help.    The biggest headache I have at the moment is keeping up with all the paperwork.  If not for the requirements of the IRS this business would be a 'breeze'!  I just took a break from that same paperwork to post this and need to get back to it.  Just wanted all to know that I am surviving and thriving here!

[mission vending]

This can be a very tough business, over the 15 years I've been in it I only know of one other owner/operator (locally) like us that is still around in this area from when I started. On one hand I am saddened to hear that your partner bailed on you, but on the other it's good that it happened before you got so big that could not handle the business by yourself.

It might also be a long term blessing, family's and partnerships can be very difficult to sustain over a long period of time. Have you considering hiring a grunt, for the summer at least? By grunt I mean a teenager 17-19 year old that wants a summer job for 8-9 bucks an hour and have him ride with you and do all the heavy work so you don't wear out and have a little more time at the location to do maintenance and talk with contacts.

I've got one for the summer and my only regret is that I didn't do it years ago.

Sounds like you are doing great. I like hearing success stories.

[NinnJinn]

Good idea Mission. 

Willis, You do the money and contacts.  He/she does the stocking! 

I never knew loading 288 cans into one machine would be such a pain in the back!  (literally!)

[NinnJinn]

 

My first full line machines went into action on the Tuesday before the 4th of July. 

Willis,  Congratulations on your one year anniversary of full line vending my friend! 

I have really enjoyed reading your posts from day one,  starting with 2 machines and now you have over 80 machines!

I'm sure others will agree when I say, "Congrats, and hope you have another adventurous and successful  year!"

[WillisNYC]

LOL NinnJinn,

Just wait til it is loading 280 cases into a truck or van instead of 280 cans!  I frequently load 100 cases at my local wholesaler to take home and put in my warehouse/garage!  Every night I load at least 40 cases into the van and of course unload most of them during the day.  Physically, I had no challenges with 35 machines but my first week with the 125 machines I have now, really pushed me to the limit physically.  My body is more used to it after nearly 6 weeks, but I am still pretty tired at the end of the day now.  I am seriously considering what mission called a 'grunt' and what we locally call 'amigos'.  However if it doesn't get any worse than this week with 90 degree plus heat every day I will probably do it myself for the next couple years.  Then I might consider getting a part time grunt or maybe hire a full time driver if I grow big enough.    Either way, I am holding up physically currently and think I will be fine long term.  Nothing like humping cases of soda to knock the rust out of this body that has spent too much of the last few years sitting at a desk instead of doing anything remotely physical!

[mission vending]

Speaking from someone who has been in your shoes before. It's not holding up physically that is the hard part, its the silly stuff that will get you. By that I mean silly little injuries that happen at home or on the route that don't get a chance to heal properly because you have to work to keep the machines full.

Case in point, I sprained my ankle horsing around with some buddies on a hunt, it was fairly severe, a grade 2. Doc put me on crutches and said to stay off of it for a couple of weeks. Well after three days I had to throw the crutches away and get to work. I did hire some day labor to help and spent most of the next three months in moderate to severe pain on a daily basis hopping around trying to keep the machines full and not lose accounts.

Moral of the story: Slow down and pay attention about what you are doing and evaluate the possible risk of injury. If that fails, to have a backup plan in place that will keep the route going if you can't work for a couple of weeks, for whatever reason.

[WillisNYC]

Finally I have everything caught up on this route including the paperwork!  The numbers for the new route still look very good.  After 6 weeks of collections on the new route I was finally able to start analyzing the numbers and am happy with the results that I see.  The owner guaranteed 90% of the gross income as part of the deal and the revenue is coming in at 104% of predicted gross for the first 6 weeks.  I have been able to make some small changes in selections on some stops and this will boost sales over the coming months as well.  For instance, one warehouse location I have with two drink machines ran out of gatorade two weeks ago.  They had two gatorade columns in the two machines total.  I added two more columns the following week and they sold out again. This week I added two more columns for a total of 6 columns in the two machines and expect that will finally meet the demand.  If not I will add another couple columns.    Changes like this are just beginning to hit the bottom line but their collections should only increase over time. 

My original route expanded by two additional service station stops in the last couple weeks.  Two machines on one and one on the other.  The biggest producer finally got its snapple machine as well.  These machines immediately boosted my bottom line by quite a bit.  This was coupled with a very hot weekend and beginning of the past week.  These additions have pushed Junes revenue numbers to nearly twice what they were in April.  April is when I started adding many additional service stations and the bottom line is finally feeling their full effect with hot weather. 

I still have 3 service stations with poor numbers and I am definitely moving one of them as soon as an opportunity presents itself.  The other two will probably have to stay since they are part of my big service station owners group of stations. 

The new route has 2 locations that MUST be serviced twice a week and has 2 more that need servicing twice a week when the weather is really hot.    The MUST serve locations are a roll factory that runs 24/7 in the summer and a big car dealership.  The other two are a hotel and another car dealership.    The roll factory and the second car dealership have NO commissions and so servicing them twice a week is a good problem to have.  The MUST car dealership and the hotel have high commissions but the pricesare high to make up for the commission.    So I come out ahead on both of those as well.  There are also many solid weekly stops on the route like a truck stop that does very well and the warehouse I disussed above.    The truck stop has a 10% commission but the warehouse does not.    Overall, most of the route does not have commission and where it does, the commission is priced in. 

There are also a couple of very slow stops that only need to be serviced every other week just like my own slow stops.    One of these slow stops had placed its Pepsi machine in the corner of its sales floor.  It used to be by the door and did about $20/week.  It was making $5 or less in the new location.  The employees here primarily used another machine located in the office area so I told the owner that I needed to move the Pepsi if he was going to leave it in the corner.  The next time I saw him, he told me it was definitely staying in the corner so I told him I was moving it that weekend and I did.  It now sits on a service station where it did $40 in its first and second weeks and $60 this past week.  Since the deal makes me count the machines revenue as equalling what it would have made if it remained in place when I move it, I am coming out far ahead on moving this machine so far.    I have 8 machines remaining in storage and one 'on station' that are ready to be placed as soon as I get new homes for them.  I have several leads I am following up on like that and I am sure that some of them will come on in the next few months. 

This marks one year in business as remarked by NinnJinn.  I have grown from two machines to over 130 in the course of that year.  The business has gone from a part time gig to one with a 'real' income and my wife will have the ability to quit her job if she wants at the end of the next two years when we pay the route off fully.  The work is hard but the rewards are high and I am quite pleased with this venture.  Now that I have my hands full with a full time route I am considering where to go next.  I intend to put a few ATM machines in over the next six months and learn how that business works.  I think that lugging $20 dollar bills around will be easier than humping sodas long term!  I am going to try to leverage some of my relationships to get ATM machines placed and see where that goes.    Regardless, I intend to keep you all posted and want to wish all of you a HAPPY BIRTHDAY AMERICA!

[blu Vending]

Do you have a business membership with Sam's Club, Costco etc?