What Commission do you pay?

[zanygames]

Hey T-Bird.

I have been reading your posts and they have helped me out a great deal.

I have just four charity locations so far, but it's only been two weeks.  I know commission locations will come up at some point on my journey from reading your posts.  I know commission depends on a bunch of things based on the specifc location, but what do you offer to start?

I figure the conversations will end up going like this:

Owner "  We want your charity machine removed "

Me after calming them down " We are happy to offer a commission on the machine so you can donate to the charity of your choice."  "We can offer 20% of gross.  We collect once a month still and service the machine and count the coins here and bag them up with a signed receipt for your records."

My question is do I start with 20% of Gross, or offer X percent of Net (minus 35% COG)?  What is the range here?  At what point do the numbers just not work out to be worth it?  If the guy wants 40% of gross or even of net I have to figure after my COG and gas, etc and a national average of just $7 a head a month, I should just walk out.

Thanks

Steve

Atlanta GA

[T BIRD]

Hey T-Bird.

I have been reading your posts and they have helped me out a great deal.

I have just four charity locations so far, but it's only been two weeks.  I know commission locations will come up at some point on my journey from reading your posts.  I know commission depends on a bunch of things based on the specifc location, but what do you offer to start?

I figure the conversations will end up going like this:

Owner "  We want your charity machine removed "

Me after calming them down " We are happy to offer a commission on the machine so you can donate to the charity of your choice."  "We can offer 20% of gross.  We collect once a month still and service the machine and count the coins here and bag them up with a signed receipt for your records."

My question is do I start with 20% of Gross, or offer X percent of Net (minus 35% COG)?  What is the range here?  At what point do the numbers just not work out to be worth it?  If the guy wants 40% of gross or even of net I have to figure after my COG and gas, etc and a national average of just $7 a head a month, I should just walk out.

Thanks

Steve

Atlanta GA

Steve..........I am not sure about the amount of saturation and competition you have with bulk where you live.  Here on Long Island and Staten Island and Westchester County where I have machines, there's plenty of vendors.  Shop owners know it and ask for high commissions.  I basically do not go over 30% of the gross.  I have some accounts that do over $300 per month,  so those spots get a little more commission.  I run approximately 100 locations that do charity and about 400 locations that do commission. 

Its funny, when I switch back and forth and do charity for a few days?  Its seems easier to manage. And I do not have to fork over any cash to the locations.  The other side of that is the gross amounts of my charity locations are less than the commission ones in most cases.  But then again that being the case, paying out commission evens the field with alot of them.

The thing with charity that I am learning and finding out is those locations are temporary basically.  As much as we would like to think that charity locations are forever, they aren't.  You have no flexibility with charity in terms of changing out machines to make more money.  And the managers or owners can simply say please leave when they want to.  I always feel like I am walking on egg shells when I go and service charity locations.  I tip toe in, get the money, clean the machines, replace product, and tip toe the hell out of there quickly!.........lol.

With commission, I feel the total opposite way. I guess part of that is because lots and lots of my commission locations date back to the mid eighties and early nineties and so I have that comfort level knowing that those machines are not going anywhere.

[zanygames]

Thanks T-bird.

If you go into a new location or one of your charity locations wants you out.  What do you offer to start with commissions?

Here in Atlanta I don't think there is a shortage of venders so I am probably in the same boat with you, maybe I can get away with a little less.

Do you always offer Gross to start and start at 10%, 20%, 25% of gross?

Thanks,

Steve

[zanygames]

Hi, T-Bird

I see you have about 500 locations from your post and 1667 machines in your signature file.  Do most of your locations have several machines?

Steve

[havending]

Zany I see that your in Ga.  I operate in AL, GA, MS, TN.  Here in the south the Com. Is high.  30 to 45%.  The way to off set the high rate is to vend .25 toys for .50 and .50 toys for .75 and 1.00.  I have found great sucess in using this aproach.  Also helps to have more than one gumball choice per location.

[lurtsman]

Zany I see that your in Ga.  I operate in AL, GA, MS, TN.  Here in the south the Com. Is high.  30 to 45%.  The way to off set the high rate is to vend .25 toys for .50 and .50 toys for .75 and 1.00.  I have found great sucess in using this aproach.  Also helps to have more than one gumball choice per location.

How much does that lower your sales? I've seen a few people around here doing it also and assumed the sales volume would be cut down dramatically and the bulk of the advantage was to get away with the company thinking they are getting more money (higher percent for the commission means they make more, right? Who cares if noone buys the crap at those prices), or increasing profit per service and putting the machine on a very long service cycle -- such as for rack locations that are far away.

I had a rack plopped next to one of my charity stops. I do sea mania there for 25 cents and it does 7-13$/month. The machine was less than 5$, and I found the location myself, so it's worked out well. A rack goes in with overpriced junk, and low and behold they put in sea mania at 50 cents. I don't know what the commission is, but the next time I was there the manager who does not speak much english, said she was sorry he had the same item, and she had told him to fix it because I was selling them first. I was a little surprised, but pleasantly. If people still buy it just as well, I need to start selling toys for twice the regular price in good charity locations.

[zanygames]

Wow, that's a long way to drive.

I like the toy idea, but am not sure what locations toys would work in. 

I just got some used NW 60 machines.  I hear I need a toy wheel and right now they have the 1" wheel for gumballs and bouncy balls and a bulk vend wheel.

I have a pizza location and put a nine head rack in there.  But other than that type of location I have some auto repair break rooms, and apartment leasing offices.  Those spots I do bulk candy since it is really for the workers. 

Steve

[T BIRD]

Hi Steve........I offer commission based on gross.  I start at 20%.  Hope that helps.

[T BIRD]

Hi, T-Bird

I see you have about 500 locations from your post and 1667 machines in your signature file.  Do most of your locations have several machines?

Steve

I guess the average is 3 machines per location.