How is your Bulk Vending Business doing...?

[dsimms]

"Be careful how you spend your money. Your system thus far looks like you'll be out of the business within 2 months and managing to have lost at least a grand"  Lurtsman

This business is not cheap at all, maybe this should be seen as an investment, as there is

no money in the short run of this business. He is right about one thing, I am already over

a grand, and I only have managed to get 4 machines out there. Even if i get the remaining

machines located, well, I will be running -$1500 or more, even if 10 machines bring in

$100/mo - it would take 15 months just to brake even, at this point, you either do nothing,

or you keep buying machines, and keep getting them out there so cause and effect, as

you keep buying machines, and keep getting them located, your balance sheet goes deeper

in the black...

are you in the black with your Bulk Business, are you giving up?

How is your Bulk business doing?

What is your opinions?

[alyssamma]

dsimms, several vendors on here operate in the black from almost day one. If you want to know how it is done, here it is:

1) Pick up a cheap used machine for under $50.

2) Self-locate

3) Buy candy

At this point your investment is somewhere between $50 and $70 depending on how much the machine is for. If you get a good location, you can make your $ back in 2mo.

Now, in month 3, take your profit and repeat steps 1-3 above. You might now be in the hole $20 or so. But now you are pulling in $50/mo. You are now in a position to purchase 1 machine/mo while you make a profit. After 6mo you can probably start to buy 2. At the end of a year you'll have close to 20 machines and can be making a nice little profit.

If you follow this approach, you can be making good $ in a few years - all without going in the red.

I'm not recommending (or advising against) this approach - just showing you how it can be done.

Even with paying locators and growing quickly you can make your $ back fairly quickly. In vending your typical ROI is less than a year, which is pretty short compared to other businesses.

NOTE: this is if you do things right. If you follow the advice of others on this board, you should get your investment back w/i the year.

Kevin

[alyssamma]

Also, above, I assume you mean "deeper in the red" and not "deeper in the black".

But again, this is not true if you follow the advice in this forum. Your machines pay for themselves very quickly. Even taking a worst case scenario - $100 to purchase machine + pay for a locator. Machine is in a poor location and does $10/mo. Assuming a 25% COGS you've still made your $ back in 13mo. True, more than a year, but you shouldn't really leave a machine in a location doing $10/mo. Like I said, worst case scenario.

To answer your other Q, my business averages have fallen about 20% this year. However, I have many poor locations and am working now (slowly, but surely) to replace them. Also, since I have a lot of restaurant break rooms, I've taken a hit from the economy.

Kevin

[dsimms]

well, I am watching the cost of machines closer then I did before. If I was totally

out of machines, and I did not see a deal, then I would pay $100 for a machine,

but only if i had too.

and for me, a locator will be a nesc expense. I have talk to some business,

and my wife has talked to a few, we are just not having luck with that. I am

not going to persue wasting time, or gas running around.

I have no plans on buying any more machines until the ones I have are located.

although that deal I saw for 40 VS at $50/unit looks very appealing, and includes shipping...

then I have to think, they would be sitting in the garage until i can get them out a few at a time.

[dsimms]

Also, above, I assume you mean "deeper in the red" and not "deeper in the black".

But again, this is not true if you follow the advice in this forum. Your machines pay for themselves very quickly. Even taking a worst case scenario - $100 to purchase machine + pay for a locator. Machine is in a poor location and does $10/mo. Assuming a 25% COGS you've still made your $ back in 13mo. True, more than a year, but you shouldn't really leave a machine in a location doing $10/mo. Like I said, worst case scenario.

To answer your other Q, my business averages have fallen about 20% this year. However, I have many poor locations and am working now (slowly, but surely) to replace them. Also, since I have a lot of restaurant break rooms, I've taken a hit from the economy.

Kevin

Red and black are negative points

I have one machine that does look like it will do $15-20/month, I see no reason why those

4 machines i have no should not at least pull $50/mo...I just have to continue to work

and get them out on the street...

I think the ecoomy has hurt everyone...

[alyssamma]

dsimms, I use locators all the time. That being said, what others on here will tell you is that if you plan on growing, you'll need to learn to self-locate.

I agree with this and probably self-locate 10% of my machines.

Why? Well, first of all you get kicked out of places. Or places will dry up. Or places will get overloaded with other machines. Or your machine will be moved. Or a full line machine will be placed there.

There are a lot of things that can happen, that will cause a location to go bad after it is out of the locator warranty period (if you have one). If you pay a locator again, you are messing up your ROI. A place might only make a *profit* of $15/mo. The cost of the locator alone will eat up 3-4mo of your ROI.

It is really easier than you think. When we started, we tried spending a day going door to door. Then we tried phone calls. Neither worked that well. Now we just stop into businesses when we are out doing our normal errands (which might include servicing machines). We don't get many this way, but it a) doesn't take any extra time and is enough to handle when we need to relocate a machine.

Others who self-locate can probably give better advice.

Kevin

[alyssamma]

Red and black are negative points

In accounting (and business) black is positive and red is negative. The term "in the black" means you are doing well. "In the red" means you are losing money.

[dsimms]

I have no problem trying when I happen to be in a business. I have talked to

several businesses this way. I have just made up some business cards, maybe

that will help.  I do know the person at our local auto shop...maybe I will

drop in on him...I dont think he will say no, but you never know..

[dsimms]

In accounting (and business) black is positive and red is negative. The term "in the black" means you are doing well. "In the red" means you are losing money.

ok, let me clear this up... I am in the "RED"  

I think this can make money..I think it will take more money and time also.

[mxer518]

One thing that drove me crazy when just starting and was using locating services was all the places that the locator got me that I know the owner to and could have very easily secured the location on my own but instead had the pay the lcoator at that point.

[dsimms]

One thing that drove me crazy when just starting and was using locating services was all the places that the locator got me that I know the owner to and could have very easily secured the location on my own but instead had the pay the lcoator at that point.

You would not have known who the locator was going to contact...

if you had known before hand, sure you would placed them yourself...

[mxer518]

the point I am trying to make is, if there are contacts that you have that you think might be very open to taking a machine  go locate it before you end up having to pay for the location you could have received for free.

[mike777]

You're not really "in the red" as far as you think you are.  If you depreciate the machines and locator fees over time (not sure yet about the accounting treatment of these), you will see that your monthly cost is probably below what you are pulling in.  Yes, it takes capital investment to get into this business, as with just about any business.  However, these will be paid back hopefully within a year and after that, it is all profit.

As far as locating, I am also using a locator to place my first machines.  After the first ones are in, I will try to get better at networking and advertising/locating myself.  As some have said before, look for locations on your normal day-to-day activities.  Talk to friends, family, colleagues and see if they have any leads.  I talked to my roommate last night and he said he might be able to get me a couple bulk spots at his school.  He also said they were having problems with their current pop/snack vendor so that might be a possibility in the future.  

[dsimms]

You're not really "in the red" as far as you think you are.  If you depreciate the machines and locator fees over time (not sure yet about the accounting treatment of these), you will see that your monthly cost is probably below what you are pulling in.  Yes, it takes capital investment to get into this business, as with just about any business.  However, these will be paid back hopefully within a year and after that, it is all profit.

As far as locating, I am also using a locator to place my first machines.  After the first ones are in, I will try to get better at networking and advertising/locating myself.  As some have said before, look for locations on your normal day-to-day activities.  Talk to friends, family, colleagues and see if they have any leads.  I talked to my roommate last night and he said he might be able to get me a couple bulk spots at his school.  He also said they were having problems with their current pop/snack vendor so that might be a possibility in the future.  

It all makes sense...if I happen to run across a place, then its free location for me..

otherwise I will just keep plugging away...

I just got shot down by my own auto shop...I give about $500-1000 a year

to this guy, and he told me no...

[MrEen]

While I agree with the networking part of Kelly's post, I have to conditionally disagree with first part.

If you keep taking your car there, and every couple of visits casually mention how you need to get more machines placed to be able to afford the maintenance on your car in this economy, they may appreciate the loyalty you've shown and let you in.

If the no was quite emphatic and their service is really no better than most others, drop them now.

If you've been getting great service from them, yet the no was set in stone, just let it drop. Where I live, finding a mechanic that gets the job done properly in a timely manner at a fair price is as easy as finding 10 Northwestern Triple Play machines for $100.

Scott

[sherlock]

If you keep taking your car there, and every couple of visits casually mention how you need to get more machines placed to be able to afford the maintenance on your car in this economy, they may appreciate the loyalty you've shown and let you in.

If the no was quite emphatic and their service is really no better than most others, drop them now.

This is sound thinking. I think this is a great idea.

If I could add something though...I recommend next time you stop by there, you ask him point blank, "Why won't you let me put a machine in your shop?"

If you don't know the reason for the objection, there's little chance of overcoming it.

Let us know how it goes.

[antoniocinisi]

I agree find out why he wont let u place a machine there if you don`t know already.I would go there 2-3 more times and to try to get a machine in there if the issue can be resolved as to why he said no.after that 1 quickie oil change place is worth another imo.

I am a firm believer in suporting the business that suports you.

[lurtsman]

This is sound thinking. I think this is a great idea.

If I could add something though...I recommend next time you stop by there, you ask him point blank, "Why won't you let me put a machine in your shop?"

If you don't know the reason for the objection, there's little chance of overcoming it.

Let us know how it goes.

Use "How come" instead of "Why". Why is a trigger word for emotional defenses because at a young age many mothers begin rants with this word, as do managers attempting to trap an employee into being a scapegoat. Asking "how come" will give your conversation a more pleasant tone and prevent the "no" from being more firmly grounded. It opens up discussion rather than accusation.

[caserri]

Use "How come" instead of "Why". Why is a trigger word for emotional defenses because at a young age many mothers begin rants with this word, as do managers attempting to trap an employee into being a scapegoat. Asking "how come" will give your conversation a more pleasant tone and prevent the "no" from being more firmly grounded. It opens up discussion rather than accusation.

Respect on that lurts. I had to read it twice to absorb it. The board is full of little gems like this that may go unnoticed but are really great tips to understand and implement.

[dperry]

I"m too lazy to search for the tread, but there has been discussion on alternative methods of locating.  I had once suggested going to a networking group like Leads Club or BNI.  There's also the method of enlisting the highschool band or football team to go out an find locations for you and you pay them a commission that you may otherwise pay to the charity.  That would be a simple and easy fundraising opportunity for them, and many times their parents would work in a location that would be good for vending, and it might be easier to get your foot in the door if you had an 'inside man' to help you.

[caserri]

Darryl,

The school fundraising method works great! I have done it with great success. Here is a link to the thread about it. It is in the PLUS area.

I had also attached a copy of the letter I used to get the program started if anyone wants to use it.

http://vendiscuss.com/forum/index.php?topic=781.0

[joebob051977]

Steve,

I'd love to hear about your experience using the school fundraising method. I have considered this method, but I never had enough machines or capital to try it.

[caserri]

Joe,

In the letter I presented to the school, it states that I will give them 10 machines to locate. You can offer more or less. You really don't need a lot to start.

As far as capital, you would only be placing machines you already have on-hand. Don't you have a few machines sitting around not making money?

[joebob051977]

Steve,

All my machines are making money except for one I have promised to drop off, and a dbl from Oak coming in the mail. I'm still cash strapped, but I think I may try this. I have enough money for 1 more machine since I am one of the crazy folks here who buys only new machines. I am operating lean, but in a few months I should be able to do this. My bank account is nearing $0 right now.

[joebob051977]

To answer the question posed in this thread: My business is doing very well. I am starting to see some results (finally). I have been patient since I like my shiny new machines. I am reducing the number of different keys I have. I am growing with Oak 300's set up as Doubles. It is so nice. I feel like a big burden has been lifted from me now that I run doubles. We will come close to reaching my business goal for this year. It will come down to the wire unless I get a gravy location soon. My business is broke like always, but that is a good thing. It means that I am constantly reinvesting and growing the business.