Question from a part-timer.... Follow up or pass?

[Boazcat]

Background - I have a small 10 machine route that has had its share of ups and downs.  I lost a big account that really set me back financially, but have all machines placed and am back to where I was 6 months ago.  My wife and I both work full-time (at a school) and run this business around those hours.    Savings has been wiped out and things are still tight.

I want to expand, but am hesitant to borrow more money. 

I've grown my route north to a town 15 miles outside of the metro area.  I'm seeing lots of opportunities for growth in this area.

I noticed today that the Coke route machine in front of a Family Dollar store and in the same parking lot as a nice tire shop was gone.  I drive right by this location once a week.  I'll assume Coke pulled the machine due to it being too small...  My other stops on this route are all after hours which fits my schedule and makes this an attractive location. 

Would you small time guys look into it and borrow money to pick up a potentially small stop or pass on it. 

What would you veterans do as well? 

Thanks,

Michael

[mission vending]

I absolutely would not borrow money to put a machine in a low volume high risk location. Once it gets vandalized it will wind up in the garageor you will spend several hundred dollats to repair damage and you will still need to make payments.

As for your fustration about your business stalling, I can sympathize. Patience is your friend here, not the enemy. Figure out a way to set aside a little every month for equipment purchases and move when you are ready.

[dogcow]

hardly a veteran but i would pass

[NinnJinn]

Coke will pull machines for various reasons.  I am currently working on a location that coke pulled their own machine from. Reason being "not enough vends"  but location owner states that based on commission checks, the machine was doing roughly 210 vends a month. (or 7 vends/day.) 

Each vendor has their own opinion on when to pull a machine.  If it were me, I would set up a 3rd party account with Coke, and not have to worry about getting money to put your own machine in there.  Have the machine placed and see how it goes!

best of luck, keep us updated please.

[RJT]

Coke will pull machines for various reasons.  I am currently working on a location that coke pulled their own machine from. Reason being "not enough vends"  but location owner states that based on commission checks, the machine was doing roughly 210 vends a month. (or 7 vends/day.)  

Each vendor has their own opinion on when to pull a machine.  If it were me, I would set up a 3rd party account with Coke, and not have to worry about getting money to put your own machine in there.  Have the machine placed and see how it goes!

best of luck, keep us updated please.

Coke will most likely not put a machine back in a location they have already pulled for low volume even for third party. You might get Pepsi to do it because they dont know the volume.

I am not sure why anyone would want to put machines in known bad locations.

The sooner folks realize it is sometimes better to walk away from potential vending accounts the better off you will be. Remember my motto, If it don’t make dollars it don’t make sense.”  It would be like investing in a known stock that made very little money or you would struggle to make a profit. If you know certain types of stocks are not good or have been proven to be bad would you invest? Why worry so much with dog accounts? Why not spend your efforts on accounts that will bring you in the maximum amount of return and profit??

[Boazcat]

I am not sure why anyone would want to put machines in known bad locations.

The sooner folks realize it is sometimes better to walk away from potential vending accounts the better off you will be. Remember my motto, If it don’t make dollars it don’t make sense.”  It would be like investing in a known stock that made very little money or you would struggle to make a profit. If you know certain types of stocks are not good or have been proven to be bad would you invest? Why worry so much with dog accounts? Why not spend your efforts on accounts that will bring you in the maximum amount of return and profit??

Because poor start-up guys like me just want to see a few quarters coming in!  We haven't learned to walk away yet. 

Its just like when I was in the lawn care industry and most guys would charge approx the same rate.  Then you have a newbie come through and lowball your accounts just hoping to get some accounts...  They were hurting not only themselves, but everyone else from a profit standpoint. 

I'm going to leave it alone for now.  If I end up with some extra money or a good deal on a machine, I might look back into it in summer if they don't get a new one. 

Thanks for the advice,

Michael

[RJT]

Because poor start-up guys like me just want to see a few quarters coming in!  We haven't learned to walk away yet. 

Its just like when I was in the lawn care industry and most guys would charge approx the same rate.  Then you have a newbie come through and lowball your accounts just hoping to get some accounts...   They were hurting not only themselves, but everyone else from a profit standpoint. 

I'm going to leave it alone for now.  If I end up with some extra money or a good deal on a machine, I might look back into it in summer if they don't get a new one. 

Thanks for the advice,

Michael

The difference is with the lawn care situation you at least knew what you were going to make each time off the account. Knocking off $10.00 on a mowing is one thing to get accounts, going into know bad vending locations is another.

You might be a “start-up” but the help you get from the forums gets you going in the right direction to learn to walk away from certain things. Just like this account you asked about, it gives you a chance to ask questions and make decisions based on what information people give you.

Stick with it and take your time, ask questions and make sound business decisions and you will be fine.

Good luck and Happy New Year!!!

[dogcow]

Because poor start-up guys like me just want to see a few quarters coming in!  We haven't learned to walk away yet. 

Its just like when I was in the lawn care industry and most guys would charge approx the same rate.  Then you have a newbie come through and lowball your accounts just hoping to get some accounts...  They were hurting not only themselves, but everyone else from a profit standpoint. 

I'm going to leave it alone for now.  If I end up with some extra money or a good deal on a machine, I might look back into it in summer if they don't get a new one. 

Thanks for the advice,

Michael

difference in lawn care the marginal cost of mowing a lawn is zero.

that is to say to mow the first  lawn you have to have alot of  equipment, mowers, edgers, blowers, etc.. to mow the second, third,four,fifth,sixth,etc.. lawn, you dont have any additional costs because you are just re-using the same equipment. so the marginal cost of mowing a lawn is nothing. the first one is very expensive but the rest are cheap so its not a big hit to charge less.

in vending its much different. each location is going to have roughly the same marginal cost. that is to say to open 1 soda location, it costs maybe $500 for a machine and some cost to stock it. to open the 2nd one, its gonna be another $500 for a machine,etc..

so if it costs the same $500 to put a machine in a good location as it does a bad one, that doesnt make much sense to bother with bad ones.

this example is simplistic, because there are some 'returns to scale' in vending but hopefully you get the idea.

[RJT]

difference in lawn care the marginal cost of mowing a lawn is zero.

that is to say to mow the first  lawn you have to have alot of  equipment, mowers, edgers, blowers, etc.. to mow the second, third,four,fifth,sixth,etc.. lawn, you dont have any additional costs because you are just re-using the same equipment. so the marginal cost of mowing a lawn is nothing. the first one is very expensive but the rest are cheap so its not a big hit to charge less.

in vending its much different. each location is going to have roughly the same marginal cost. that is to say to open 1 soda location, it costs maybe $500 for a machine and some cost to stock it. to open the 2nd one, its gonna be another $500 for a machine,etc..

so if it costs the same $500 to put a machine in a good location as it does a bad one, that doesnt make much sense to bother with bad ones.

this example is simplistic, because there are some 'returns to scale' in vending but hopefully you get the idea.

Great analogy.....

[mission vending]

difference in lawn care the marginal cost of mowing a lawn is zero.

that is to say to mow the first  lawn you have to have alot of  equipment, mowers, edgers, blowers, etc.. to mow the second, third,four,fifth,sixth,etc.. lawn, you dont have any additional costs because you are just re-using the same equipment. so the marginal cost of mowing a lawn is nothing. the first one is very expensive but the rest are cheap so its not a big hit to charge less.

in vending its much different. each location is going to have roughly the same marginal cost. that is to say to open 1 soda location, it costs maybe $500 for a machine and some cost to stock it. to open the 2nd one, its gonna be another $500 for a machine,etc..

so if it costs the same $500 to put a machine in a good location as it does a bad one, that doesnt make much sense to bother with bad ones.

this example is simplistic, because there are some 'returns to scale' in vending but hopefully you get the idea.

Well said.