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Hints and Tips - Inventory Management


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Inventory Management (or Product Management) is an important aspect of your business.  Buying too much of a product can result in wasted inventory while buying too little of a product can result in repeated trips to the store.  Both cases can easily result in unnecessary expenses.  I have first hand experience of this, as we incurred both types of unnecessary expenses during our first year in the vending business.  This is why we decided to add a product management feature to Vend-Trak.

The Unit.  The basic measurement used to manage products is a "unit."  A unit can be a pound of candy, a bag of candy, a candy bar, or a can of soda.  The unit of measure should be kept the same for each location throughout that locations life.

Recording Inventory.  Two things happen when machines are serviced - money is removed and product is added.  Vend-Trak manages both aspects.  When product is added to a location, simply record how much of each type of product is added.  For instance, if your "unit" is in pounds and you add 1 1/2 pounds of M&Ms, record an entry of 1.5 when recording services.  As time goes by, these records provide a great history of that product at that location, which in turn allow Vend-Trak to estimate what will be needed in the future.

Route Estimate Report.  When you need to service a route, it is good to know how much product you may need so that the right amount can be purchases.  Vend-Trak can estimate how much of each type of product will be needed based on the history of your locations.  Just go to the Reports section and choose Inventory Reports.  The report titled "Route Estimate" will tell you how much of each type of product you would need to purchase if you serviced the route that day.  As time goes by and more inventory records are stored, the data used to estimate the amount of product should become more and more accurate - leaving you with fewer unnecessary expenses.

If you have experiences, stories, problems, or successes with Vend-Trak's product management tool, please let us know either in this forum or through the Contact Us links on our website.

Happy Vending!

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As time goes by and more inventory records are stored, the data used to estimate the amount of product should become more and more accurate - leaving you with fewer unnecessary expenses.

 

Jeremy,

This is a great point that I am starting to realize and I wanted to point out to those who are just starting with the program. That is, as you continue to enter data, whether it be "units used" or service records or anything, the program comes to life. There is much more to look at and analyze once there is sufficient data entered.

When I first started with the program, it took about 3 services before I was able to see a good indication as to how each location was fairing using the graph on each locations page. (photo below). I just wanted to let everyone using this now who has just started with it that the best is yet to come as you enter your data.

Steve

http://www.vendiscuss.com/forums/images/vt_screen.bmp

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  • 3 weeks later...

This is good info for me.  I am about to service my first 4 placements for the first time.  I was wondering what to use the unit as. I think I will call it lbs.  That makes the most sense to me I think so that when I service a machine I will just record accurately how much I put in.  This software as I go along is gonna be awesome for me.

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  • 8 months later...

We just signed up for our free trial. Are we missing something, or is there no way to track income by product?

When you input the amount pulled from a machine, it looks like you have to aggregate the number (1 amount for a 3-head machine) rather than entering the exact amount pulled from each head/cannister.

It seems like it should allow income tracking by product, then on your product page, you could see which product pulled in the most money per location where it is offered.

This seems so basic and obvious, that we were shocked to see that there is no obvious way to do it. Perhaps we're missing something and it just isn't intuitive. Any advice?

If not, I think we'll stick with Excel spreadsheets.

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We just signed up for our free trial. Are we missing something, or is there no way to track income by product?

If not, I think we'll stick with Excel spreadsheets.

Zannah, you are not missing anything, you are correct. Unfortunately like most vendors you are focusing on the money and not the inventory. Vendtrak does tell you how much product you used, can it be improved; sure. Drill downs on products to show location that total is from would be great, and maybe in time it will be there.

I have no idea how many machines you have, but think for a minute of how long you want to be entering data into your computer. Lets say 200 machine all triple so that is 600 heads, that would translate to 1200 entries just for product and money per head, bad enough at 800 entries. And what would the money tell you that inventory will not? Controll of inventory is way more important then knowing how much each product gave you in money. (Can be calculted anyway with knowing vend amounts averages per pound and how many pounds sold)

Just in case you think I'm chastising you, I'm not. I use to think the same way when I only had 1 machine out but now with 100 locations. I think differently, at least a little. I still would like to see drilldown reports with Vendtrak, so that I can see an overall picture and a more detail picture. A more pressing issue to me would be the ability to select a product and see were it is being used. (at what locations)

Spreadsheets can not do what databases can (not easily), put your request in for changes with Jeremy, he is very open to suggestions. (Where is our hyponitist? :D)

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>>And what would the money tell you that inventory will not?<<

Isn't the converse also true?  Seems like the same amount of data entry either way (either inventory or quarters).

Maybe we'd feel differently if we had more than 100 machines, but it just seems simpler to count the quarters per head.  We're counting the quarters anyway.

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>>And what would the money tell you that inventory will not?<<

Isn't the converse also true?  Seems like the same amount of data entry either way (either inventory or quarters).

Maybe we'd feel differently if we had more than 100 machines, but it just seems simpler to count the quarters per head.  We're counting the quarters anyway.

Again you are correct if you were only doing one or the other. If I was a cashier or a bank teller then the goods I deal with would be money, it would be my first and only concern.

But we deal with product, lets take hot dogs for an example we vend $90.00 worth of hot dogs we feel good. I vend 100 hot dogs and only collected $90.00 dollars, now I have to question why, they sell for $1.00 each so there should be $100.00 not $90.00. Then there is the question of how many hot dogs do I have left, to vend next week as they only have a two week expiry life. It will affect what I order and when I order it.

In reality they both go hand in hand, inventory and money, you need to know both. Break it down to each individual head for both is more work which some I'm sure are willing to do. (like you) But the one the holds the most power in your business decision is not money, even though we all like to think so. 1 mil in sales is still a losing business if you provide 1.2 mil in product.

I can look at a locations total dollar collected on each service and compare it to the product that I have provided for that location on each service no matter if it is 2 heads or eight heads and I can tell if they are not vending properly or there is theft. All because I can see a pattern and I know how much money should be collected on a 1 lb of product. No I can not automatically tell how much to the quarter.

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Well, there is also the issue of vending machine sales taxes in Virginia. We have to track sales per head and COGS per head on a monthly basis in order to properly file and pay those taxes.

So, until that feature is added, we can't use Vendtrack.

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Zannah, I pay sales tax too but it is calculated on each quarter. (PST due on sales of > $0.21) So each vend is subject to tax hence it does not matter if I calculate per head or the whole route)

 How are your taxes calculated?

Mine is as follows

$1000.00 / 1.08 = sales ($925.93)

$925.93 X .08 = PST ($74.00)

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  • 3 weeks later...

Ours is 5% state, 1% local for a total of 6%.

However, it is charged on the COGS not on the retail price -- which is great on the one hand because it means much lower taxes but a pain on the other because it requires more record-keeping.

It seems to me like it would be much easier on everyone for the state to just collect the sales tax from us at the wholesale level and be done with it. It's the same bottom line to us and the state. But, instead, we are exempt from paying the 6% when we buy the product, only to pay it out little by little as we sell the product.

So if we have 1000 vends of gumballs in a month, and our COGS is $0.02 per gumball, then our tax due at the end of the month for those sales are:

$0.02 * 1000 = $20 COGS

$20 * 0.06 = $1.20 tax due.

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God I love living in Massachusetts!

I know I keep saying this but I just have to rub it in once more...

No tax at the wholesale level and no sales tax owed once product is sold. Quick, clean, efficient and profitable!

There, I'm done, sorry! :)

Steve

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Wow! That Virginia tax system sounds like a real pain. I feel for you. I have never heard of such a crazy system - just goes to show what clueless government bureaucrats can dream up. What irks me the most about these lifelong government legislators is that most of them have never owned a business and have no idea of the challenges the small business owner faces. They treat us small guys as large cash-cow corporations to fund their programs. I know this can turn into a political discussion, but government should help small business and not hinder them with excessive/complicated taxes and regulations.

Here in Florida, we do not pay sales taxes on the wholesale price if we are reselling the product AND we have a re-sell certificate from the state.  All vending sales in Florida are subject to state sales tax except 25 cent candy with a charity affiliation.  We also have annual license fees for each machine and a tangible property tax on each machine - even if they are in storage! 

But we have no state income tax and lots of warm sunshine :D - except during hurricanes :(.

Jax

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