abbott1999 Posted October 9, 2009 Share Posted October 9, 2009 I just had to write about this one and get some comments. Who in there right mind can give 50% of the gross take out of a superball machine? There is no way possible and still stay in business. I would love to hear other comments on this. I pay commission, I do not do charity, put 50%? These will be the machines we see on craigslist and ebay in a few months. I mean, what goes through their minds? Please someone help me understand. Link to comment Share on other sites More sharing options...
kai1836 Posted October 9, 2009 Share Posted October 9, 2009 Some people are just crazy. I wouldn't pay 50% on a superball. Perhaps on flat vending or gumballs.......But hey, without those people eager to put themselves out of business we wouldn't have a source of cheap machines! Link to comment Share on other sites More sharing options...
abbott1999 Posted October 9, 2009 Author Share Posted October 9, 2009 never thought of it that way! Link to comment Share on other sites More sharing options...
mxer518 Posted October 9, 2009 Share Posted October 9, 2009 I bet I can blow all of your minds, I do some vending where I am paying 80% commission of gross, and still making a ton of money. Link to comment Share on other sites More sharing options...
kai1836 Posted October 9, 2009 Share Posted October 9, 2009 I thought those illegal drug vending machines were a joke! Link to comment Share on other sites More sharing options...
PLAYTOWINBOB Posted October 10, 2009 Share Posted October 10, 2009 some places will only give you the account if you pay 50% do you say no or do you need the business? try putting lower end stuff with a lower cost like bulk candys,cheaper 2" items,27mm super balls times are tough out there,what do you do. i also put out type machines in to make up the % like a arcade game,crane, kiddie ride ect. also when you buy bulk items,ask if they have any items on sale,or anything you can get at a deal,i do! i often find many off these companys calling us for orders and getting better then listed prices. Link to comment Share on other sites More sharing options...
lurtsman Posted October 10, 2009 Share Posted October 10, 2009 I bet I can blow all of your minds, I do some vending where I am paying 80% commission of gross, and still making a ton of money. Is the 80% on air vending machines at gas stations? Link to comment Share on other sites More sharing options...
abbott1999 Posted October 10, 2009 Author Share Posted October 10, 2009 With the way the economy is, at 50% of gross, I may as well just hand the store owner the keys to the machine. It would be cheaper in the long run. Link to comment Share on other sites More sharing options...
BluePlate Posted October 10, 2009 Share Posted October 10, 2009 With the way the economy is, at 50% of gross, I may as well just hand the store owner the keys to the machine. It would be cheaper in the long run. I think you are looking at it wrong. Do you have a specific situation that you can share. I have a Pizza Place. They will accept nothing less than 50% gross. They do well over $100 in bouncy balls consistantly. I pay about .05 per ball. Do the math, in some months it profits $50 a month - a little better than the nation average Link to comment Share on other sites More sharing options...
The Mage Posted October 10, 2009 Share Posted October 10, 2009 I got a call earlier this week from one of my locations complaining that the deal was 50%, not the 30% I paid him. When I called him back he told me to either pay 50% or take the machine out. Personally I would rather take the machines out then pay 50%, so I said OK, that was fine, being as polite as possible. At the time I thought this was a guy trying to get one over on the new guy, but myself, I would rather just pull the machine. Well anyway, I called the previous owner of this route, and he assured me it was 30%. I called the guy back, and told him about my conversation, and found out he thought I had bought 2 of the machines, not 1. (A sticker machine.) I also pointed out that it had only been about 2 weeks since it had been serviced before. Anyway he is letting it stay for at least a month, and then would decide. So I am convinced he didn't remember what the deal actually was, and was used to seeing the results of 2 machines over a month, and was taken aback when he saw half the machines with half the time. And what I assume is the less profitable of the 2 machines. I will give him the benefit of the doubt though. But if he still wants 50%, they will be pulled. Also, this is a machine I need to adjust. After trading out one of the machines, I took a closer look at it, and it looks like he was selling skittles @ 46% of gross, and Hot Tamales @ 56% of gross. @ 30% it is my second best location, but @50%, drops to third, and after COG, (at least what my goal cog is,) it drops to 7th. If I moved it to a charity location doing only a third of what it does here, I am ahead of the game. Link to comment Share on other sites More sharing options...
BudLeiser Posted October 10, 2009 Share Posted October 10, 2009 I think you are looking at it wrong. Do you have a specific situation that you can share. I have a Pizza Place. They will accept nothing less than 50% gross. They do well over $100 in bouncy balls consistantly. I pay about .05 per ball. Do the math, in some months it profits $50 a month - a little better than the nation average Where are you getting superballs at .05 AFTER shipping? There are products that can do 50% of gross. Be creative. Link to comment Share on other sites More sharing options...
pdavid Posted October 10, 2009 Share Posted October 10, 2009 Where are you getting superballs at .05 AFTER shipping If you buy at least 10 cases from A&A you can get them for a little less than that. Link to comment Share on other sites More sharing options...
Jax Snacks Posted October 10, 2009 Share Posted October 10, 2009 This problem just wont go away will it??!! I have no 50% deals, but I do have a few 40% deals. I will do a "stupid" commission only deal if: 1. I have excess equipment and inventory in storage so that the start up cost for that location is virtually nil. Hey, let that location pay you to store that equipment for you until you can find a better place for it. 2. I want to test certain products in that location. I learned a lot about flat tattoo/sticker vending and 2 inch toy vending in those type of places. So the educational "cost" was worth it to me. 3. The location will allow me to vend high margin products like gumballs and superballs ( preferably in a shootin hoops) as well as not having other strange conditions. I may eventually pull those "stupid" locations when I need that equipment rather than buy new equipment for new accounts. I am also focusing on growing the charity side as well to obtain more diversity. I used to think that commission was the answer to fix all of my charity woes. I was wrong and now realize that neither is a silver bullet and both methods have pros and cons. Jax Link to comment Share on other sites More sharing options...
dperry Posted October 10, 2009 Share Posted October 10, 2009 We talked about 50% commission in here before. I think the discussions led us to start thinking about raising our costs per vend. If you are doing toys, then you can switch from 25c to 50c 1" toys and from 50c to either 75c or $1 for the 2" vends. If the location owner balks, just tell him you have to eat too. Link to comment Share on other sites More sharing options...
BluePlate Posted October 10, 2009 Share Posted October 10, 2009 Where are you getting superballs at .05 AFTER shipping? There are products that can do 50% of gross. Be creative. pdavid is right. I do a lot of BB, I have ordered 10 cases once. It is $1000+ at a pop (ouch), I also order from www.bulkvending.com they have a warehouse near me, I can pick them up. 1 case from A&A shipped to me is .0605 cents a ball. And sometimes I can get crappy balls from www.rinovelty.com pretty cheap. I get them from a bunch of different places. I try to average 5.5 cent a piece. Link to comment Share on other sites More sharing options...
sterling Posted October 10, 2009 Share Posted October 10, 2009 I had a guy that wanted me to up it from 25% to 50% yesterday. Well after a machine broken that may not be able to be fixed. Two machines that had product stolen one of which also had the money stolen, I about had it. Then the guy told me I could leave the machine there if I handed over my keys and he'd would buy it for $50.00. I told him why in the world would I sell an asset that is making me money. I then told him, no problem on the 50%, you buy the candy. I told him 33% of the grossis 50% of the profit but I won't give him any more then 25%. Do you want me to take it out or leave it? I paid him one quarter more than 25% and he said, ok leave it. I was frustrated tired and really didn't give a Golpher at that point. The 3 headed candy machine does only about $15/6-7 weeks anyway I didn't care and he knew it, just trying to get a better deal I guess. Link to comment Share on other sites More sharing options...
dsimms Posted October 10, 2009 Share Posted October 10, 2009 I had a guy that wanted me to up it from 25% to 50% yesterday. Well after a machine broken that may not be able to be fixed. Two machines that had product stolen one of which also had the money stolen, I about had it. Then the guy told me I could leave the machine there if I handed over my keys and he'd would buy it for $50.00. I told him why in the world would I sell an asset that is making me money. I then told him, no problem on the 50%, you buy the candy. I told him 33% of the grossis 50% of the profit but I won't give him any more then 25%. Do you want me to take it out or leave it? I paid him one quarter more than 25% and he said, ok leave it. I was frustrated tired and really didn't give a Golpher at that point. The 3 headed candy machine does only about $15/6-7 weeks anyway I didn't care and he knew it, just trying to get a better deal I guess. for such a small amount $7-8 per month..I would have pulled it out if a business wanted 25% what is $2-3 a month reallly going to do for their business? You could have put a extra gal of gas in your car or something...now if it was a $100 account, then it might be something to think about...but paying a business $2-3/mo...do not waste my time...I think most business do not really know, and they think these machines make a killing when they do not. Link to comment Share on other sites More sharing options...
sterling Posted October 10, 2009 Share Posted October 10, 2009 Your right it is a canidate for re-location. It just happens to be on the way to a bunch of other machines. I have 9 machines that need to placed so I just let the $12/pick up ones ride. If I was full time I'd be constantly moving my bottom 20% until my average was 2x what it is now. As far as the guy thinking it makes killing, he watches me open it and count the quarters. The only thing I could think of it the guy sees $16 and thinks it's all profit? Link to comment Share on other sites More sharing options...
West Coast Vend LLC Posted October 11, 2009 Share Posted October 11, 2009 If anyone is paying 50% of the gross than they should really make sure they are not working for nothing. If you are paying an account 33% of the gross, that is 50% of your profits. If you have to pay that much to get in to an account, you better make sure that your mix of products are 80%-90% profit items. Stickers and tattoos is a good example of that. ($.10 cost/$.50 selling) Superballs that cost you $.05 (90%) profit, and selling for 50c is another good one. You could also buy close-out items with no shipping or sales tax. The only issues with that is you don't have the hottest products in the market and you are usually selling old out-of-date items. Gary Link to comment Share on other sites More sharing options...
Smiley Posted October 11, 2009 Share Posted October 11, 2009 I'm not a big fan of setting arbitrary limits for cost of goods sold. There is a simple way to determine which item you should have in the machine. This formula holds true even if the commission rate is 50. BTW, I don't recommend paying 50% unless there are some extraordinary circumstances. Anyway let's take a hypothetical example. In a 50% Com. location, If you put 5 cent superballs in the machine your margin will be 30%. If you were to put a 1.1" cap costing you 7 cents in same location your margin is 22%. But let's say the capsule item sells twice as fast as superballs. Do you still want to stay with the balls? Link to comment Share on other sites More sharing options...
Bravo Duck Posted October 11, 2009 Share Posted October 11, 2009 I'm not a big fan of setting arbitrary limits for cost of goods sold. There is a simple way to determine which item you should have in the machine. This formula holds true even if the commission rate is 50. BTW, I don't recommend paying 50% unless there are some extraordinary circumstances. Anyway let's take a hypothetical example. In a 50% Com. location, If you put 5 cent superballs in the machine your margin will be 30%. If you were to put a 1.1" cap costing you 7 cents in same location your margin is 22%. But let's say the capsule item sells twice as fast as superballs. Do you still want to stay with the balls? No, you switch to the caps. Whats the formula? Link to comment Share on other sites More sharing options...
BnDVending Posted October 12, 2009 Share Posted October 12, 2009 Well...in my non-expert opinion I look at this from a straight business stand point. I can't think of one industry, other than vending, that gives over 30% commission for ANYTHING. I am sure they are out there, but I personally can not think of any off the top of my head. If you buy a franchise, you're not paying anywhere NEAR 30%, selling cars, Amway, ect. ect. I think vending business owners have begun to cut their collective noses off. I am sure many of you will say "but I make X amount of dollars a month and I pay 50%..." That's great for you...and if that works, go for it. I however am not going to do the amount of work involved, that the business owner does NOTHING for, I pay for ALL the cogs (not just the product), and then give you 50%....I think that's nucking futs! I understand that the vending business is much different than the "real world" but do you know how many businesses would fail if they paid out 50% commission?! I don't pay out commission so I don't have a dog in this fight, but if I did...I surely wouldn't be paying out 50%!! I say we start a revolution here on Vendiscuss...start taking BACK commission that is rightfully yours. Tell business owners that you can no longer give them 50, 40, or even 30% commission. You may lose some accounts, but if we all band together and the business owners can't make the money, they will come down. I'm probably dreaming, but I think it's a good start.... Barry S. Link to comment Share on other sites More sharing options...
The Mage Posted October 12, 2009 Share Posted October 12, 2009 Well, an update on my location. I was called about the machine being low on candy. Unfortunately I was out of town, and had no way back until the next day. I was more worried about us getting off to a bad start. But I did get in Sunday, and filled the low selections. (They were not out, but low.) I finally met the guy in person, and he was very nice, and nothing was said about what we talked about before. I think he realized his mistake, and this will be a good location, even at 30%. Link to comment Share on other sites More sharing options...
Jax Snacks Posted October 12, 2009 Share Posted October 12, 2009 Many vendors play the perception-reality game. The location has the perception of getting 50%, but the reality of what the vendor actually gives him may be a different story! When I prospect for new accounts and the location tells me they get 50%, I am almost certain that the current vendor is not really paying that or they are twisting the gross down to give 50% of a smaller number. Most locations do not verify the collection amount nor do they observe the final number in the coin counter/scale. It has turned into an ugly game. Jax Link to comment Share on other sites More sharing options...
Mercury Posted October 12, 2009 Share Posted October 12, 2009 Jax, Where I'm from, that is called LYING!!!!!! Don't be afraid to call a liar a liar. A liar is nothing but a thief who hasn't acted yet! I hate them both. Merc Many vendors play the perception-reality game. The location has the perception of getting 50%, but the reality of what the vendor actually gives him may be a different story! When I prospect for new accounts and the location tells me they get 50%, I am almost certain that the current vendor is not really paying that or they are twisting the gross down to give 50% of a smaller number. Most locations do not verify the collection amount nor do they observe the final number in the coin counter/scale. It has turned into an ugly game. Jax Link to comment Share on other sites More sharing options...
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