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Buy a Route vs Build a Route


jeffbic
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Okay vending professional's ,I got a question for ya. If you were start a vending business and you had a choice to buy a medium size route or to build a route a location by location which would you choose?

There are pros and cons to each way and I would like to get the professional's opinon's.

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I'm no pro but I'll weigh in here.

I started my route with a few triples I purchased off of Craigslist and I'm glad I did.  It allowed me to see what it takes to get machines route ready, find locations and put in all the "dirty work" to get the quarters.  I know now that I learned a lot of things the hard way but I started slow and grew at my own pace as to not get too discouraged or overwhelmed.  I feel that if you are just starting out you need to purchase the machines and locate, do paperwork, etc all yourself so you know what it takes. 

If you are not new to vending and have experience in improving routes, managing stock, waste, COG and the like then save yourself some trouble (hopefuly) and purchase machines already placed.

Overall the things you learn by doing it yourself give you a better understanding and respect of the business itself.

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would have to agree with Gabe, there is nothing better than learning on the job training first with a few machines, this way when a route comes up for sale you have a pretty good idea what its worth, by looking at the locations and machines. Buying a route is a great way to expand but be sure your buying something thats worth you time and money.

Gary

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I am building my own full line route from scratch.    I use 3rd party soda machines and used snack machines to keep my capital costs low.  So far it is working out pretty well.  I am posting results in that section of the site for plus members.  'Pretty well' means ok, not great and not horrible, but about $100 profit per machine placed per month.  I only have 6 locations so far, so it is early days and the numbers may not hold.  However if I can keep placing one location per week, I will have a 50 location route in a year that will generate 5k/mos in profit not counting the capital costs.  That is the goal anyway.

I have to say the experience I am getting is invaluable.  Many small things I never thought of until I actually had to set up and service my machines.  I comment on many of these things in my results postings.  I do know that I can evaluate a route much better now than I could when I started.  Thus, if an opportunity comes along, I can make a much better decision about buying it.  Hope this helps you out some and good luck with your route whichever way you decide to go.

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WillisNYC

It seems to me that you are moving along pretty quickly. One thing I just wanted to tell you is this, if you plan on having 50 snack/soda machines you might want to consider this, stay with the same snack machine(model). Reason for this is repairs, and will make buying and replacing parts much easier for your fleet. Just an opinion.

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Since it is full line I will give my thoughts on buying a route for a new vendor.  When you say medium size route, that could mean a lot of different things.  Getting started is the hardest part, because of such a learning curve.  This is not nearly as easy as many people think it is and on the other hand it isn't as hard either.

If I were starting over I would purchase a smaller size route.  Maybe 5 locations with a drink and a snack on site.  I would only buy the route if the existing owner would run the route with me the first 30 days before I purchased it.  Then I would want a statement from that owner concerning on going training or trouble shooting.

There is nothing more frustrating then owning a machine, having it just stop working and having no one to call for help. Having a smaller investment in this business will protect you in case you don't like it.  Smaller routes can be easier to sell. 

I am not a big fan of just buying a machine, putting it out and starting up your business.  I did it that way and if I had to do it again, I know I would have done it differently.  These are just my thoughts.

Bev

Blue Moose

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Poplady,

I agree with your idea about buying a small route to start.  However I could not find anything appropriate here of that size to start.  I came close to buying a 40 stop route to start, but the owner would not guarantee the income or provide reasonable support.  Rather than continue waiting for the right opportunity to come along, I dove in and got started with 3rd party soda machines because I knew I could learn from the service guys that they provide for their machines.  Those guys referrd me to other guys that could service and/or sell used snack machines at good prices.  I found many, many contacts by just getting started with a couple 3rd party soda machines.  Those contacts proved invaluable when I had problems and needed help with servicing my machines.  Every time I get a chance to talk with these guys I pick their brains for every bit of info I can get.  However I would not get this opportunity without getting started.  If a small route is not an option, I would advise getting started as I did.  It isn't the perfect solution, but getting started with a couple machines is not a bad idea.  Continue to build if you decide you like what you are doing or bail out if you do not.  Either way, a small start will keep you from getting burnt for any 'big' money.  Just two cents from a guy who only started seriously at the end of June as far as full line is concerned. 

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Poplady , this is info I was looking for . The advantage of having an existing route with training and trouble shooting of the machines vs building a route and starting fresh with no previous customer service issues.

Willis, your story of starting from scratch and building a route from nothing is a inspiration to me and should be a motivation for anyone interested in Full line vending just starting out.(By the way beautiful avatar )

I 'm still looking and I see benefits on both ways  Ito start in Full Line vending.Thanks for the warm wishes Summit.

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Hey Jeff, Waverly who is the Waverly of Waverly's Vending World is my 9  month old daughter who says thank you very much on the avatar shout out.    She was the inspiration for the business and this photo is a natural pick for the logo that goes on my business cards.  It will be fun to know what she thinks about this many years from now!

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What about using a company like 1800 vending to start  with. I know it woulnt be a good idea to build a large route with them but what about just buying 5 to start and get the feet wet and learn the biz a little.  Bad idea?

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Why buy any soda or snack machines before you get started?  Each location is unique in full line.  The dual snack and soda machine offered by 1 800 vending is a one size fits all solution that may not work for all locations that you find.  Additionally, I don't know much about these machines, but my experience with this type is that the amount of product is limited so that it requires much more frequent refilling than would be necessary with a 'normal' snack or soda machine.  Lastly, buying them from 1800 vending MUST be vastly more expensive than buying quality used equipment that will be better suited to your location.  I highly doubt that you can buy their 'dual' machine for less than $1000 and I can get a used soda and snack machine separately for under $500 each either on Craigslist or from guys who do refurbishing. 

One final note, why even think of buying more full line equipment than you have locations unless A) You are getting a super cheap deal or B) You are such a great locator that you always have locations waiting for machines?

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Over the years I have always thought that it is always better to have the location before you have the machine.  That way you can outfit the spot with the proper equipment (proper equipment meaning what the account wants and whether you want to provide it, ie fresh food machines or too many drink machines).  The machine is the tool that you can design to close the account if it makes sense.

I have been locating for a company in Ventura county CA for the past two years now.  He started off buying 25 Gains combo machines.  He wanted to build a vending route for his retirement.  Well the group that sold him the equipment promised locations for all of the equipment. This is not meant to slam Gains machines but of the 25 machines that were located only 7 were keepers.  A keeper means locations that earn enough each week to justify keeping the machine on site. 

Somewhere along the line he was referred to Blue Moose by Vending World in Ontario.  He wanted to upgrade 18 of the machines to better locations even if it meant putting two machines in one spot.  As we started working together (we work well with combo owners who work in our service areas because so many of the accounts we contact are borderline full line accounts which will work very very well for a combo) he started realizing how much more money he could make if he installed full size equipment.  Well, I believe he has sold most of his Gaines Machines.  He is now one of our best closers on large accounts for full size machines.  Last week he installed a school with 900 students, 175 teachers and the machines are for student use because it is a ROP operation.  He is installing 3 drink machines, one water, one can, one uncarbonated beverage unit with bottles, two snacks and a food machine. 

He has installed a large account weekly for the past 18 weeks.  He has gone from one of our smaller combo operators to a major player in the Ventura County Area.  He is knocking out Canteen and some of the other large vendors, WHY, because he purchases the machines he needs to get the business and they are almost entirely refurbished machines.  Once he signs up the account he gives them a installation date.  He rounds up the equipment he needs, does the installation and gets ready to do the next account. Now as time goes by he will lose some of those accounts and he will have them in his warehouse but he knows how to talk to accounts to bend their elbow to his way of thinking so he will be just fine.

Before you spend any of that hard earned start up money, check out your market.  Take a drive.  Stop in at some oil change places, look at the pricing.  Walk into a couple of hotels, check that pricing.  If you see a vending machine outside, walk up to it and check it out.  Be sure to take note of any empty lights (good sellers) See what products people are putting into their machines, bottles or cans.  Go to your local Sams Club or Costco.  Look at the beverages they are selling from waters, cans, bottles, energy drinks, smoothies, milk, juices.  Make a list with the current product size and pricing.  Then once you get a feel for your market, then start looking for a location.  Pick up the phone and call a few good categories in your area, maybe collision centers.  Ask if they would be interested in a free vending machine.  If they say yes, ask if they would like bottles or cans.  Then tell them you need to stop by to see the spot to be sure the machine will fit into the spot they have available, once you stop by look to be sure you have electric, you can get the machine to the spot (check the doorways measurements) and then go buy what you need...

Hope that helps.

Bev

Blue Moose

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over 5 years ago I bought 3 doubles and started my first attempt at vending. I moved and a year latter I bought 2 can machines and 1 snack machine.  Then I moved.

This gave me enough experience to know that I wanted to get into vending. Last year I bought a full line business from a retiring vendor and paid cash at a good price. 4 months I bought a bulk route and the owner financed it. (Yes, I paid too much)  The bulk route cost me $300 per month for $1200 gross.

It depends on your situation. If you have the time, you can build it your self. If you need the instant cashflow like I did, buying a route might be the right choice for you.

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Sorry JD I just saw your question.  A ROP stands for a Regional Occupational Program.  Normally it is an adult operation or special needs type of account.  They are often times a little easier to get for machines because they are not so heavily governed by the local Public School system.  You do need to become proficient in the NAMA fit for life program so you know what products you can sell.

Thanks to all for your comments and your up arrows.  Its the first time in a long time we have been on the right side of the grass.

Bev

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