brendamca Posted April 27, 2011 Share Posted April 27, 2011 Yesterday I went out for the first time to try to do some locating on my own. I visited four places -- two gyms, a nursing home, and an auto body repair shop. One of the gyms and the auto shop were pretty positive. The gym already has a large fridge (not a vending machine) behind the front desk that holds specialty energy beverages for bodybuilders, plus some large bottled water and a few Gatorade. The front counter has protein bars for sale. The front desk guy sells all that stuff and the location keeps the money. The guy already had it in mind to put in vending machines to provide more mainstream snacks and drinks that they don't already offer -- Sun Chips, gum, Diet Coke. He'd prefer not to have to monitor sales for those products from the front desk. Of course, they want commission. There's only two problems with this scenario -- 1) his preferred location for the snack machine is upstairs near the cardio, and I don't think they have an elevator. I didn't even think about the hassle of installing and servicing a machine upstairs until after I'd left. 2) He made noises about starting off with just one machine. If he wants Diet Coke and Sun Chips, I'm looking at a combo unit. I tried to steer him away from the combo idea, but I'd have to look around the location a little more to see if I can even find a spot for a full-size snack and soda pair. On the upside, he did mention the possibility of putting a machine in the women's locker room down the line. This week I'll be emailing him a list of product to choose from, and possibly a full proposal. I need to choose a few potential machines to show him. He wants something reliable, but modern-looking ("not something that looks like it belongs in a hospital"). He seemed OK with a branded-front soda machine. So for this location, if he really wants a combo, which one? I'm avoiding USI machines, fyi. ----------------------------- The auto body repair shop is a busy collision repair center that gets lots of referral business from the insurance companies and local car dealerships. They used to have a soda machine, but don't now. (Did I ask why? Of course not!) There is a liquor store next door. The previous machine was kept in a bungalow-office conversion. Pro: a cleaner machine! Con: not customer accessible. Inside the main office, there's a little conference room with OCS. If I can't get them to put the machine in a customer-accessible location, should I put a mini fridge in that little room and sell them a set quantity of drinks each month? I was thinking about putting my DN 501T in there. I haven't refurbished it yet, but I could get it done fairly quickly. I would earn my money back pretty quickly on that, since I'll have spent only a few hundred to get it location-ready. The manager said he'd talk to the owner and get back to me by tomorrow. ----------------------------- That reminds me -- I visited that swanky assisted-living location last week. The guy pulled about $100 total from both machines, and he hadn't been there in nearly a week. That tells me he's doing $400-$500 a month, not $750. Is that a fair assessment? Maybe the $750 comes in during a SoCal heat wave. The location is 20 miles from my house, and I drive a Suburban. I've calculated that if I service it 2x a week, it will cost me $22/week in gas alone. I was pretty excited about this place at first, but I'm losing enthusiasm for it, and I need to fish or cut bait. I appreciate all the helpful advice and input I've gotten from these boards, and I just need a little guidance to help clinch these two locations. Thanks for all your help! --Brenda Link to comment Share on other sites More sharing options...
dogcow Posted April 27, 2011 Share Posted April 27, 2011 Yesterday I went out for the first time to try to do some locating on my own. I visited four places -- two gyms, a nursing home, and an auto body repair shop. One of the gyms and the auto shop were pretty positive. The gym already has a large fridge (not a vending machine) behind the front desk that holds specialty energy beverages for bodybuilders, plus some large bottled water and a few Gatorade. The front counter has protein bars for sale. The front desk guy sells all that stuff and the location keeps the money. The guy already had it in mind to put in vending machines to provide more mainstream snacks and drinks that they don't already offer -- Sun Chips, gum, Diet Coke. He'd prefer not to have to monitor sales for those products from the front desk. Of course, they want commission. There's only two problems with this scenario -- 1) his preferred location for the snack machine is upstairs near the cardio, and I don't think they have an elevator. I didn't even think about the hassle of installing and servicing a machine upstairs until after I'd left. 2) He made noises about starting off with just one machine. If he wants Diet Coke and Sun Chips, I'm looking at a combo unit. I tried to steer him away from the combo idea, but I'd have to look around the location a little more to see if I can even find a spot for a full-size snack and soda pair. On the upside, he did mention the possibility of putting a machine in the women's locker room down the line. This week I'll be emailing him a list of product to choose from, and possibly a full proposal. I need to choose a few potential machines to show him. He wants something reliable, but modern-looking ("not something that looks like it belongs in a hospital"). He seemed OK with a branded-front soda machine. So for this location, if he really wants a combo, which one? I'm avoiding USI machines, fyi. ----------------------------- The auto body repair shop is a busy collision repair center that gets lots of referral business from the insurance companies and local car dealerships. They used to have a soda machine, but don't now. (Did I ask why? Of course not!) There is a liquor store next door. The previous machine was kept in a bungalow-office conversion. Pro: a cleaner machine! Con: not customer accessible. Inside the main office, there's a little conference room with OCS. If I can't get them to put the machine in a customer-accessible location, should I put a mini fridge in that little room and sell them a set quantity of drinks each month? I was thinking about putting my DN 501T in there. I haven't refurbished it yet, but I could get it done fairly quickly. I would earn my money back pretty quickly on that, since I'll have spent only a few hundred to get it location-ready. The manager said he'd talk to the owner and get back to me by tomorrow. ----------------------------- That reminds me -- I visited that swanky assisted-living location last week. The guy pulled about $100 total from both machines, and he hadn't been there in nearly a week. That tells me he's doing $400-$500 a month, not $750. Is that a fair assessment? Maybe the $750 comes in during a SoCal heat wave. The location is 20 miles from my house, and I drive a Suburban. I've calculated that if I service it 2x a week, it will cost me $22/week in gas alone. I was pretty excited about this place at first, but I'm losing enthusiasm for it, and I need to fish or cut bait. I appreciate all the helpful advice and input I've gotten from these boards, and I just need a little guidance to help clinch these two locations. Thanks for all your help! --Brenda i would not do the gym location i have heard nothing good about gyms. the gym i go to has vending i have never seen them used most people drink from the fountain or bring their own drink. i would not put a 501 at a collision place. that is way too big a 368 is probably as big as you'd want to go in that place. i have 2 collision places which are very big and they are good for maybe 20 bucks a week on drinks. my guess is the old vendor got fed up with low volumes. i have 368 and 276 in the collision shops Link to comment Share on other sites More sharing options...
JEREMYTINA Posted April 27, 2011 Share Posted April 27, 2011 That reminds me -- I visited that swanky assisted-living location last week. The guy pulled about $100 total from both machines, and he hadn't been there in nearly a week. That tells me he's doing $400-$500 a month, not $750. Is that a fair assessment? Maybe the $750 comes in during a SoCal heat wave. The location is 20 miles from my house, and I drive a Suburban. I've calculated that if I service it 2x a week, it will cost me $22/week in gas alone. I was pretty excited about this place at first, but I'm losing enthusiasm for it, and I need to fish or cut bait. I appreciate all the helpful advice and input I've gotten from these boards, and I just need a little guidance to help clinch these two locations. Thanks for all your help! --Brenda Most assisted living and nursing home locations tend to experience a drop in census during the spring and summer. Your calculation seems correct. Service it once a week. I wouldn't let that one go if the price is right. Link to comment Share on other sites More sharing options...
brendamca Posted April 27, 2011 Author Share Posted April 27, 2011 Most assisted living and nursing home locations tend to experience a drop in census during the spring and summer. Your calculation seems correct. Service it once a week. I wouldn't let that one go if the price is right. Well, that's the trick. The guy wants a year of gross based on $750/month (with no verifiable data, of course). This guy services it 2x/week, but he lives a few minutes away from the location, and he drives a Civic. The soda machine's an FSI. He said I should stock it with 12 12-packs each visit. Link to comment Share on other sites More sharing options...
dogcow Posted April 27, 2011 Share Posted April 27, 2011 Well, that's the trick. The guy wants a year of gross based on $750/month (with no verifiable data, of course). This guy services it 2x/week, but he lives a few minutes away from the location, and he drives a Civic. The soda machine's an FSI. He said I should stock it with 12 12-packs each visit. is he claiming that is the average? 6cases a week is a respectable gross i'd be happy with that Link to comment Share on other sites More sharing options...
brendamca Posted April 27, 2011 Author Share Posted April 27, 2011 is he claiming that is the average? Yeah. Link to comment Share on other sites More sharing options...
mission vending Posted April 27, 2011 Share Posted April 27, 2011 Yesterday I went out for the first time to try to do some locating on my own. I visited four places -- two gyms, a nursing home, and an auto body repair shop. One of the gyms and the auto shop were pretty positive. The gym already has a large fridge (not a vending machine) behind the front desk that holds specialty energy beverages for bodybuilders, plus some large bottled water and a few Gatorade. The front counter has protein bars for sale. The front desk guy sells all that stuff and the location keeps the money. The guy already had it in mind to put in vending machines to provide more mainstream snacks and drinks that they don't already offer -- Sun Chips, gum, Diet Coke. He'd prefer not to have to monitor sales for those products from the front desk. Of course, they want commission. There's only two problems with this scenario -- 1) his preferred location for the snack machine is upstairs near the cardio, and I don't think they have an elevator. I didn't even think about the hassle of installing and servicing a machine upstairs until after I'd left. 2) He made noises about starting off with just one machine. If he wants Diet Coke and Sun Chips, I'm looking at a combo unit. I tried to steer him away from the combo idea, but I'd have to look around the location a little more to see if I can even find a spot for a full-size snack and soda pair. On the upside, he did mention the possibility of putting a machine in the women's locker room down the line. This week I'll be emailing him a list of product to choose from, and possibly a full proposal. I need to choose a few potential machines to show him. He wants something reliable, but modern-looking ("not something that looks like it belongs in a hospital"). He seemed OK with a branded-front soda machine. So for this location, if he really wants a combo, which one? I'm avoiding USI machines, fyi. ----------------------------- The auto body repair shop is a busy collision repair center that gets lots of referral business from the insurance companies and local car dealerships. They used to have a soda machine, but don't now. (Did I ask why? Of course not!) There is a liquor store next door. The previous machine was kept in a bungalow-office conversion. Pro: a cleaner machine! Con: not customer accessible. Inside the main office, there's a little conference room with OCS. If I can't get them to put the machine in a customer-accessible location, should I put a mini fridge in that little room and sell them a set quantity of drinks each month? I was thinking about putting my DN 501T in there. I haven't refurbished it yet, but I could get it done fairly quickly. I would earn my money back pretty quickly on that, since I'll have spent only a few hundred to get it location-ready. The manager said he'd talk to the owner and get back to me by tomorrow. ----------------------------- That reminds me -- I visited that swanky assisted-living location last week. The guy pulled about $100 total from both machines, and he hadn't been there in nearly a week. That tells me he's doing $400-$500 a month, not $750. Is that a fair assessment? Maybe the $750 comes in during a SoCal heat wave. The location is 20 miles from my house, and I drive a Suburban. I've calculated that if I service it 2x a week, it will cost me $22/week in gas alone. I was pretty excited about this place at first, but I'm losing enthusiasm for it, and I need to fish or cut bait. I appreciate all the helpful advice and input I've gotten from these boards, and I just need a little guidance to help clinch these two locations. Thanks for all your help! --Brenda I would stay away from the gym deal as well. If you want to go ahead and do it any way for the experience then only if he stops selling his stuff, offer to buy the inventory at cost. Bear in mind though that you will want to relocate the equipment at some point as I don't see you ever making much more than covering your costs. I agree with Dogcow on the body shop, a smaller drink machine would be better suited. Putting the 501 in there just to get it out making money is not a bad idea other than the fact you will wind up moving it AGAIN when you find a better location for it. As for the nursing home, count the money with him at the location if he is agreeable to get a better handle on the revenue. Sounds like around 6K annual revenue for the location. There are a number of variables to consider here, contract, equipment etc. but there is also the lost opportunity to consider as well. How long will it take you to get this amount of business somewhere else? For me, with the info you have provided, I would be willing to purchase between 3-4K. I would not upgrade the equipment as previously discussed until the contract was up for renewal and offer the upgrade as an incentive to get a 3-4 year agreement. Link to comment Share on other sites More sharing options...
brendamca Posted April 27, 2011 Author Share Posted April 27, 2011 I would stay away from the gym deal as well. If you want to go ahead and do it any way for the experience then only if he stops selling his stuff, offer to buy the inventory at cost. Bear in mind though that you will want to relocate the equipment at some point as I don't see you ever making much more than covering your costs. I agree with Dogcow on the body shop, a smaller drink machine would be better suited. Putting the 501 in there just to get it out making money is not a bad idea other than the fact you will wind up moving it AGAIN when you find a better location for it. As for the nursing home, count the money with him at the location if he is agreeable to get a better handle on the revenue. Sounds like around 6K annual revenue for the location. There are a number of variables to consider here, contract, equipment etc. but there is also the lost opportunity to consider as well. How long will it take you to get this amount of business somewhere else? For me, with the info you have provided, I would be willing to purchase between 3-4K. I would not upgrade the equipment as previously discussed until the contract was up for renewal and offer the upgrade as an incentive to get a 3-4 year agreement. If there's no good place for a machine at the gym, then that pretty much settles it. But I figure if the contact at the location saw a need for some alternative product, then I think I'd like to give it a try. If I can get a customer-accessible location for the body shop, then the 501 might be OK. Are they outdoor-capable? I'll price out smaller machines and see if I can score a deal. At the assisted-living location, I'd be looking at paying for the location, possibly replacing the soda machine w/ at least a 10-selection unit, then only pulling in 30% profit. That pushes my ROI into years, not months. I e-mailed him and said the numbers weren't looking favorable, but that I was open to any creative ideas he had. I haven't made him an offer at this point. Link to comment Share on other sites More sharing options...
brendamca Posted May 2, 2011 Author Share Posted May 2, 2011 I've called the collision shop guy three times to follow up, but he's not returning my calls. I sent the gym guy a list of snacks to choose from, and will call him tomorrow to follow up. I'm doing a product cost analysis on the assisted living location, and chocolate bars are running 45-48 cents each at Sam's. The snack machine has them priced at only 85 cents (the average vend price across the whole machine), so it looks like a price increase is needed. I need to find out from the current owner how much he's paying for candy bars right now, and how long ago he raised prices. If I buy the location, should I have him raise prices before I take over? Link to comment Share on other sites More sharing options...
mission vending Posted May 2, 2011 Share Posted May 2, 2011 If I buy the location, should I have him raise prices before I take over? If you go in as the new owner and immediately raise prices you will likely jeopardize the location. So you are stuck with taking the chance or having to live with making less money until you get a strong enough relationship to get a price increase. Not worth it IMO, have him get the price increase before you buy. Link to comment Share on other sites More sharing options...
Phil Posted May 22, 2011 Share Posted May 22, 2011 My 2 cents is that i have found taking face to face works a lot better than a phone call. Go talk to them face to face an they won't duck your calls. Link to comment Share on other sites More sharing options...
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