royalforest Posted April 19, 2011 Share Posted April 19, 2011 I have an account doing $400.00 a week. I think the person I purchased the account has everything priced too low. Can someone tell me how much I should sell cans, chips and candy for? Thanks Rich Link to comment Share on other sites More sharing options...
NinnJinn Posted April 19, 2011 Share Posted April 19, 2011 I have an account doing $400.00 a week. I think the person I purchased the account has everything priced too low. Can someone tell me how much I should sell cans, chips and candy for? Thanks Rich "If it ain't broke, Don't fix it" If you are making at least a 50% profit on each item sold, why would you want to raise the prices any higher? The way the economy is right now, if you go any higher than 50% profit by raising the prices, your $400 a week location might just turn into a $400 a MONTH location. I will probably get flamed but who cares. It seems that the more a location brings in, The higher the vendor wants to raise the prices. Why can't the vendors be happy with doubling their investment? (50% profit) It seems as if when some one finds a good location, they just turn into a Mr Scrooge and wants to screw every dime out of the customer they can get! Link to comment Share on other sites More sharing options...
JEREMYTINA Posted April 19, 2011 Share Posted April 19, 2011 Don't you have a ton of accounts already? I would say you should price everything according to your market and existing accounts, but the pricing question has been answered repeatedly in various recent threads if you are looking for specific prices others charge. I personally would not adjust pricing right now, unless you aren't making money. As NinnJinn says, you may risk the account in doing so. Are you paying a commission on this $1700 per month account? My suggestion would be to change some of the lower margin products to something that isn't in the machine that will make a higher margin, as long as you don't think it will impact sales. This would not likely be seen as a price increase, and could squeeze a few more dollars on net income per week from the account. Link to comment Share on other sites More sharing options...
Technivend Posted April 19, 2011 Share Posted April 19, 2011 If you just got this location I wouldn't change anything until they are comfortable with you as their vendor. A new operator and new pricing just screams to them that maybe it is time to look at all their options. Keep under the radar for now until you have a relationship and then you can review your options. Link to comment Share on other sites More sharing options...
mission vending Posted April 20, 2011 Share Posted April 20, 2011 If you just got this location I wouldn't change anything until they are comfortable with you as their vendor. A new operator and new pricing just screams to them that maybe it is time to look at all their options. Keep under the radar for now until you have a relationship and then you can review your options. Good advice. My first question is what is current pricing and is commission involved? Link to comment Share on other sites More sharing options...
royalforest Posted April 22, 2011 Author Share Posted April 22, 2011 Good advice. My first question is what is current pricing and is commission involved? Thanks everyone! I have: Cans - 60 cents(they want a 5% commission on soda) chips (1 ounce) - 65 cents chips(1.5 ounce) - 75 cents chocolate - 75 cents candy - 75 cents This account is doing 250-300 a week not 400. Thanks for all your help! Rich Link to comment Share on other sites More sharing options...
dogcow Posted April 22, 2011 Share Posted April 22, 2011 Thanks everyone! I have: Cans - 60 cents(they want a 5% commission on soda) chips (1 ounce) - 65 cents chips(1.5 ounce) - 75 cents chocolate - 75 cents candy - 75 cents This account is doing 250-300 a week not 400. Thanks for all your help! Rich ur gonna have to raise the can drink prices for sure. even w/out commission 60 cents is too low the problem is i doubt a 15c jump will go over well with the account. Link to comment Share on other sites More sharing options...
mission vending Posted April 22, 2011 Share Posted April 22, 2011 Thanks everyone! I have: Cans - 60 cents(they want a 5% commission on soda) chips (1 ounce) - 65 cents chips(1.5 ounce) - 75 cents chocolate - 75 cents candy - 75 cents This account is doing 250-300 a week not 400. Thanks for all your help! Rich This is a pretty decent account for you. You mentioned that you bought this account, my first suggestion is that you DO NOT raise prices for the first 6 months, even if they are too low. Then make a very concerted effort to get to know as many people there as possible, especially the decision makers. Once you have some history AND a relationship with them its time to sit down and talk price increase. When you do go in be prepared with the info on your unit cost of items, where it was when you took over, mention that it was already below market norms, and your current cost. Also be knowledgable about what the same items costs at the local convienence store for comparative purposes. I don't think it would be a good idea to get all the way up to where you should be in one jump. I'd try to get and increase in cans to .65, chocolate and candy to .85, the LSS chips to .85 and pastry items (not listed?) up a little as well. Link to comment Share on other sites More sharing options...
mission vending Posted April 22, 2011 Share Posted April 22, 2011 It seems that the more a location brings in, The higher the vendor wants to raise the prices. Why can't the vendors be happy with doubling their investment? (50% profit) It seems as if when some one finds a good location, they just turn into a Mr Scrooge and wants to screw every dime out of the customer they can get! Not necessarily so, larger operators have larger expenses and must pay much more attention to costs and margins in order to survive. With the pricing structure Royal posted he is not at the 50% margin he needs to get. Link to comment Share on other sites More sharing options...
NinnJinn Posted April 23, 2011 Share Posted April 23, 2011 Not necessarily so, larger operators have larger expenses and must pay much more attention to costs and margins in order to survive. With the pricing structure Royal posted he is not at the 50% margin he needs to get. On Royal's pricing, I would agree that the income is well below 50% And I guess I have to realize and accept the fact that some vendors on here live in a "higher cost of living area" And as my wife puts it, "I was born and raised and we live in a small "Hickerbilly town" (full of hicks and Hillbillies) as my wife says. She is from Fort Wayne, IN And If I were to price my cans at $1 and my bottles at $1.50+, I would most likely go out of business really quick! I have my Bottles priced at $1.25 and have about a 44% profit Yet, some places have gone down in price and have their bottles priced at $1 Also, around here, in order for me to get 50% on chocolates, I am looking at having to charge over 90cents, Hence, reason I haven't went into snack vending. Back to your original reply Mission, Are you saying that some of the bigger vendors actually have to bring in over 50% in order to survive? Link to comment Share on other sites More sharing options...
royalforest Posted April 23, 2011 Author Share Posted April 23, 2011 Thanks I will try and raise the prices. Link to comment Share on other sites More sharing options...
mission vending Posted April 23, 2011 Share Posted April 23, 2011 Are you saying that some of the bigger vendors actually have to bring in over 50% in order to survive? Everytime that I can remember seeing info on the industry avg COGS it is 50-55%. So based on that vending operators need to see 45-50% gross margin. With large operators looking at a 1-2% net profit, it doesn't take much to upset the apple cart. Small vendors, especially owner operators, that don't have all the overhead to maintain can probably do allright at a COGS that approaches 60%. Link to comment Share on other sites More sharing options...
coinvestor Posted April 23, 2011 Share Posted April 23, 2011 Thanks I will try and raise the prices. Just to be clear, I think that the general consensus (and my opinion) was to let them be for now. I have bought quite a few accounts with the same issues. My rule of thumb is to work the account at current pricing until I get my ROI after COGS. Whatever that calculates out to be in your situation. This way the account has a chance to get to know you. After I get my money back, I sit down with them and agree to upgrade any really old machines (which there usually are some in these instances) in exchange for bringing their pricing to market rates. This gives you some good leverage and if you get the boot at least you won't loose money. JD Link to comment Share on other sites More sharing options...
NinnJinn Posted April 25, 2011 Share Posted April 25, 2011 Very good advice coinvestor! 1 rep Link to comment Share on other sites More sharing options...
coinvestor Posted April 25, 2011 Share Posted April 25, 2011 Very good advice coinvestor! 1 rep Thanks! Link to comment Share on other sites More sharing options...
Poplady1 Posted April 26, 2011 Share Posted April 26, 2011 Thanks everyone! I have: Cans - 60 cents(they want a 5% commission on soda) chips (1 ounce) - 65 cents chips(1.5 ounce) - 75 cents chocolate - 75 cents candy - 75 cents This account is doing 250-300 a week not 400. Thanks for all your help! Rich Rich, the pricing in Southern California is starting to go up because they are paying over $4.25 a gallon on gas. New accounts are pricing at .85 on cans, 1.50 bottles, choc is now .90 to 1.00, there is a little room to wiggle on chips but not much these days. These prices are considered the low ball now. So your account is priced low. You do need to let it settle before talking with them. I know you have an unusal situation since you will not personally ever be able to build that relationship. You can be creative though. Is this a multi-price machine? You could convert some of your selections to bottles for better pricing and they won't notice it especially if you put in some 16oz bottles at 1.25. On the Choc you can put in the bigger bars and up the price. Again they won't complain too much because they feel they are getting a lot more product. You would want to be sure you let management know you are going to try some new products before doing anything. Just be careful on how you handle it. Congrats on getting the account. Link to comment Share on other sites More sharing options...
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