royalforest Posted October 22, 2009 Share Posted October 22, 2009 I am trying to figure out if I need pepsi to loan me machines. It looks like they charge 3 cents more for their cans then if I go to Sams. Sounds like a good deal, but a company that fixes machines told me to stay away from 3rd party vending. Any experiences to help? Thanks Rich Link to comment Share on other sites More sharing options...
mxer518 Posted October 22, 2009 Share Posted October 22, 2009 Its a great way to grow fast, but it will give you zero equity in your business. I personally have third party machines from both coke and Pepsi but that's only about 25% of all my dink machines. It up to you how you want to grow and structure your business, that's why a business plan would be so helpful so that you have an educated direction to follow. Link to comment Share on other sites More sharing options...
mission vending Posted October 22, 2009 Share Posted October 22, 2009 Third party machines can be a double edge sword. You can grow fast but have no equity. You are contractually bound to buy product from them that in most instances will be a higher cost, reducing your profit, but then again you have no investment. If you don't buy minimum case requirement they can pick up the machines, if they find pepsi in a coke machine they WILL pick up the machine. I used to have over 40 third party machines and have gradually phased them out over the years, I'm now down to 4 that I keep because they are in locations that have experienced vandalism so I'll let coke eat the cost of repairs when it happens. Link to comment Share on other sites More sharing options...
Mercury Posted October 22, 2009 Share Posted October 22, 2009 With third party vending, does Coke/Pepsi require that you ONLY deal with them for the machines? Or can you do both Coke and Pepsi at the same time? (Not in the same machines, of course.) Merc Link to comment Share on other sites More sharing options...
G-Vending Posted October 22, 2009 Share Posted October 22, 2009 Drinks From coke/pepsi are a lot higher than sams or walmart.... If you think not wait till you get the bill. I have 2 pepsi and 1 coke both cans for a reason Link to comment Share on other sites More sharing options...
Mercury Posted October 23, 2009 Share Posted October 23, 2009 Of course they are. SOMEONE is paying for that $2k machine.....and it's YOU! Merc Drinks From coke/pepsi are a lot higher than sams or walmart.... If you think not wait till you get the bill. I have 2 pepsi and 1 coke both cans for a reason Link to comment Share on other sites More sharing options...
royalforest Posted October 23, 2009 Author Share Posted October 23, 2009 Mission My Pepsi bottler only charges 3 cents more per can vs. Sams. They charge me 33.7 cents a can. That includes free delivery. Why did you phase your 3rd party accounts out? How much are you paying for cans? Rich Link to comment Share on other sites More sharing options...
G-Vending Posted October 23, 2009 Share Posted October 23, 2009 Mission My Pepsi bottler only charges 3 cents more per can vs. Sams. They charge me 33.7 cents a can. That includes free delivery. Why did you phase your 3rd party accounts out? How much are you paying for cans? Rich Pepsi cans 24 cents this week at walmart Link to comment Share on other sites More sharing options...
royalforest Posted October 23, 2009 Author Share Posted October 23, 2009 On 1000 cases, that would be a 100.00 savings. I guess that is fine as long as you factor in you have to pick them up vs. having them delivered. Link to comment Share on other sites More sharing options...
Poplady1 Posted October 23, 2009 Share Posted October 23, 2009 Most of the vending companies I work with use some 3rd party machines. Many of them phase them out over time. As you grow your business the equity will become more meaningful when you go to the bank to set up your line of credit. After about 7 years in business I found that I had to have atleast $250000 line of credit with our bank. The only way they gave it to me was equity in our machines, products, vehicles and forklifts etc. Each year they would come to renew it and each year they reviewed our equipment and holdings. As far as when you might use 3rd party machines we got a hotel in Atlanta's that has 18 floors. They want machines on each floor plus employee machines in the basement employee area (that's where all of the money will be made too). This vendor has already talked to Coke and Pepsi to have their machines placed on this account. As you go up each floor in a hotel the income on the machines goes down and down. If this vendor bought all of those machines the account would kill his bottom line but with the 3rd party machines, it makes sense. Thank God they only wanted snack s on the first 3 floors. So 3rd party machines play a role in every vending business. Blue Moose B Link to comment Share on other sites More sharing options...
royalforest Posted October 23, 2009 Author Share Posted October 23, 2009 B When you took that credit line out did you fund it back and then take it out then fund it back.....or did you use the credit and hold off funding it back for years? Thanks Rich Link to comment Share on other sites More sharing options...
mxer518 Posted October 23, 2009 Share Posted October 23, 2009 In vending bank lines of credit are not easy to come by, I urge as many people as I can that getting established with a great leasing company will do 10 fold that a Bank line of credit will do for you. Link to comment Share on other sites More sharing options...
royalforest Posted October 23, 2009 Author Share Posted October 23, 2009 What are you leasing? Link to comment Share on other sites More sharing options...
mxer518 Posted October 24, 2009 Share Posted October 24, 2009 What are you leasing? its not the type of lease you are thinking of, its a lease with a dollar buy out at the end of the lease, it will require nothing down and none of your assets get tied up. Link to comment Share on other sites More sharing options...
mission vending Posted October 24, 2009 Share Posted October 24, 2009 its not the type of lease you are thinking of, its a lease with a dollar buy out at the end of the lease, it will require nothing down and none of your assets get tied up. Agreed. I've found a leasing company that I am about to do some business with for the first time. So far they have been great to work with. The application was one page, then last three months bank statements and credit check. I'll be making the purchase sometime next month and will let you know how it goes with them. Link to comment Share on other sites More sharing options...
mxer518 Posted October 24, 2009 Share Posted October 24, 2009 You will love it, it is soo simple to get it going and once you establish yourself with a good company you will be able to just make a phone call if you need some new equipment in a short time frame and they will add it right to a current lease or just start a new one. Not to mention the tax advantages of a lease is amaizing compared to traditional financing. Link to comment Share on other sites More sharing options...
Poplady1 Posted October 24, 2009 Share Posted October 24, 2009 We normally had our line paid back by years end. If not when they renewed our line of credit (line less balance due) the new line amount would be that adjusted balance. Of course if they call the line (which happened to so many good vendors this year) you need to pay it back within 30 days. That can be difficult. We often used our line of credit for product delivery, sometimes purchasing equipment, autos and sometimes we used it to get financing/leasing from other companies. Once you have a established line of credit your company becomes very attractive to other companies. Lots of people come knocking at your door. Sometimes your bank will set your line of credit up alongside your company checking account (they basically take control of your account). Each day your deposit is applied to any outstanding balance on your line of credit and of course any checks reduce the line of credit balance. We used that for many years and it drove our bookkeeper crazy but it worked very well for us. We loved it on days when we showed a plus deposit on our account (that meant we were even with the line). It was really a joy if we managed to really pull ahead of the line and be able to withdrawl some money to put into other investments or accounts. Bev Link to comment Share on other sites More sharing options...
Poplady1 Posted October 24, 2009 Share Posted October 24, 2009 I have a great deal of respect for each of you trying to establish your companies in this economy or any economy for that matter. I just want to put out a word of caution on leasing companies. They will feed you leases as long as you make each and every payment on each and every lease each and every month. Once your late or show any sign of weakness, that's it. You will never get another lease again. So be very careful and be sure you really need that lease before you sign. I have known vendors (personal friends) that missed a couple of payments and they picked up the machine right off the site with the sheriff. Save up those pennies and pay cash for equipment as often as you can without a lease. Now I am going to stop mothering you.... Blue Moose Link to comment Share on other sites More sharing options...
mxer518 Posted October 24, 2009 Share Posted October 24, 2009 I have a great deal of respect for each of you trying to establish your companies in this economy or any economy for that matter. I just want to put out a word of caution on leasing companies. They will feed you leases as long as you make each and every payment on each and every lease each and every month. Once your late or show any sign of weakness, that's it. You will never get another lease again. So be very careful and be sure you really need that lease before you sign. I have known vendors (personal friends) that missed a couple of payments and they picked up the machine right off the site with the sheriff. Save up those pennies and pay cash for equipment as often as you can without a lease. Now I am going to stop mothering you.... Blue Moose I agree with poplady, when I talk about leasing on this board I sometimes forget that there are people of all stages of the business reading this information. There needs to be a whole list of things that need to be in place before you consider leasing and it needs to be right for your business plan as well. Link to comment Share on other sites More sharing options...
mission vending Posted October 24, 2009 Share Posted October 24, 2009 While we are still discussing leasing stuff I thought that I'd also mention that I also have my new Isuzu on a lease. It has a 10% buyout at the end and if I get into a bind my lease allows me to return it with a 60 day notice with no penalty. Link to comment Share on other sites More sharing options...
Poplady1 Posted October 25, 2009 Share Posted October 25, 2009 Sweet...I loved those auto leases too. Blue Moose Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.