50% commission

[sherlock]

My last couple times out making sales calls, I have come to find that there is a local vending company offering 50% commission on racks.

There have been too many businesses in a specific area telling me this for me to assume that it's not so.

The business owners have each been positive the guy is offering commission off of GROSS, too.

More than one told me how the guy explains his payment method and it is apparent the guy is talking about GROSS and not NET.

I could see if the guy just wants "in" at some hot spots.

But, a lot of these places are NOT likely to be gravy locations.

50% of gross!?! WTF?!

How does someone afford that?

I can't compete with that ---- can't even come close.

[Big Mike]

He is a liar.

[sherlock]

He is a liar.

I don't know. He may be.

But, he's killing me out there.

half my "No's" today were because of that dude.

Couldn't recover from the owners saying "I just had another guy in here offering 50%"...no matter what I said.

I know the business owners were being honest.

I've heard about that "50% commission" guy  too often this past week.

[havending]

If he is doing it every where then hes is " skimming off gross"  Or hes is selling cheap crap at jacked up peices

EX.

Moustash mix at .75 cost is .09    .75/  50%  is 35.5  less cost .26 cent net.    my point is that it could be done but im thinking hes not. 

Think about it if hes selling that item at .50 and parying a more normal 30% hes making the same net. 

[sherlock]

If he is doing it every where then hes is " skimming off gross"  Or hes is selling cheap crap at jacked up peices

EX.

Moustash mix at .75 cost is .09     .75/  50%  is 35.5  less cost .26 cent net.    my point is that it could be done but im thinking hes not. 

Think about it if hes selling that item at .50 and parying a more normal 30% hes making the same net. 

Hmm. Could be.

I don't know.

Any advice from you experienced folks?

Any of you all come across this before?

I need to come up with a response that works because I don't want this guy stunting my growth for too long.

[antoniocinisi]

I need to come up with a response that works because I don't want this guy stunting my growth for too long.

with that kind of commssion he will soon be going under soon.

[Rick Falcon]

I know what you mean Sherlock I'm out in N.Y. and I see this all the time The Great American Vending company is going around offering 50% commission this makes it impossible for the little guys to compete.

[Faith Vending]

Sherlock; you cannot compete and I don't know a response except thanks for your time and please let me know if I can be of any help in the future, here is my card. I would put those locs on a follow up list and wait for the guy to implode, which he will. You'll know by the machine not being serviced or all of a sudden the rack is gone.

[lurtsman]

The 50% off gross is a lie.

I have a chain where I pay 50% off gross--for sales in the spiral. In return, they let me put in toys at a lower rate. They are very clear about understanding the toys come at a much lower commission, and the 50% spiral is a service I offer to them to close the deal.

[havending]

I know what you mean Sherlock I'm out in N.Y. and I see this all the time The Great American Vending company is going around offering 50% commission this makes it impossible for the little guys to compete.

Great American has deep pockets.  the larger companies that also offer cranes can aford not to make as much as we need to on bulk because they make it up on cranes and scales etc.  And like with any other type of big business they lose a little here and make it up over there.  For example super markets make little to no money in two areas deli and bakery.  But they are 2 big traffic drivers into the store so they make it up on other items.  Im sure Great  American is getting great prices on products and machines and that also helps.  The photo on their site with the coin bags is neet.  I ship coin in the same bags but never have 20 of them laying around like in the pic.  I run to the bank 

[mizugori]

I saw those great american b--tards have some machines around a few areas I have been considering attempting to place machines. How should this influence my business plan? Is there any way I can compete with them?

[Big Mike]

You cant compete with them. You just have to be where they are not.

Mike

[mike777]

You should say to the owner "Really? 50%?  Well I'd call him back and have him put some machines in.. and in a few months when the product is stale, machine is dirty, or you're tired of him skimming off the top.. call me for a fair deal."

Honestly though, if 50% wasn't enough to get the location, I don't know if you had a chance in the first place.

[havending]

I saw those great american b--tards have some machines around a few areas I have been considering attempting to place machines. How should this influence my business plan? Is there any way I can compete with them?

I compete with Service Vending in alot of the area that i service.  They have imposed on a few of my locatons and i can be an golpher when it comes to my money and cutting in on my business.  In a few of these locations I put in the best looking racks i had and in one case bought a brand new one.  In these locations I ordered the best toys many of them dollar vends and sold everything for .50 and for one inch all at .25.  Now a bit about service vending all their 2 inch are .75 and one inch .50 and they sell the smaller gumballs at .25.  Oh ya i had nerds and jelly belly gum at .25 in these locations.  Service drivers can not offer more than 40% comm.  so i paid 40%.    well after a few service cycles they pulled their machines and left.  I DO NOT RECOMEND doing this in your position.  I was able to because i have many more machines to cover the loss of just a few.  i was dead set on proving a point to service vending and for the most part they leave my locations alone.  They made me so mad i had to kick them in the nuts a few times.  So i feel your fustration with this company trying to "big boy" every one and paying there so called 50% every where.  But i still go after their locations  .  There is only one operator that i i have an agreement with and we never go after each others locations.  We service much of the same area and look out fr or one another.  we will service for each other in a pinch ect.