BoKnowsVending Posted May 12, 2011 Share Posted May 12, 2011 Just trying to get you guys opinion. Ive been at this account for about a month and some change. The owner called me and asked if I could place full size drink and snack machine in his location. He was complaining about having to go to the store for them and assured me that a lot of people would use the machine. I had a couple machine on dead locs that needed moving so I accepted. So now out of the blue he wants "some share of the profits" Account does about $100-$125 a week. I dont want to pay him nuthing. Am I tripping? Is this normal? Link to comment Share on other sites More sharing options...
NinnJinn Posted May 12, 2011 Share Posted May 12, 2011 10% commission wouldn't be out of the ordinary. You have to realize he is paying the electric each month for your machines to operate. If you don't want to pay him anything, be prepared to move your machines out and into your garage, because someone will replace you and pay him what he deserves. Nothing in life is free. Link to comment Share on other sites More sharing options...
JEREMYTINA Posted May 12, 2011 Share Posted May 12, 2011 10% commission wouldn't be out of the ordinary. You have to realize he is paying the electric each month for your machines to operate. If you don't want to pay him anything, be prepared to move your machines out and into your garage, because someone will replace you and pay him what he deserves. Nothing in life is free. I agree with that. If he wants more than 10% talk to him about raising the price of your products by a dime. Link to comment Share on other sites More sharing options...
mission vending Posted May 12, 2011 Share Posted May 12, 2011 Paying commission or some other sort of consideration is pretty much the norm. As mentioned, 10% is also pretty much the standard for an account this size. Use this as an opportunity. I'd be willing to bet that you don't have a contract or service agreement with this location either. So here is what I would do. Go in and sit down with the guy in person. Explain that you don't recall any discussion about commission when you agreed to set the machines. Go on with that's its not a big deal, however, the prices you have are "noncommission" prices and that if he wants a commission some of the items will have to go up a nickel or dime. (Know before going in what prices you want to raise.) After going over this present him a "service agreement" to sign with the pertinent info filled in. (If you need a service agreement you can PM me with your e-mail and I'll be happy to send you one.) Now you will have a written agreement and in three months when he tries to change it again you can pull it out for reference. If he still wants to change at that point then it gives you a better negotiating position. Another benefit of a service agreement is that it helps to prove ownership and recover equipment in the unlikely event the location closes. Link to comment Share on other sites More sharing options...
BoKnowsVending Posted May 12, 2011 Author Share Posted May 12, 2011 Thanks guys for the 2 cents. I just thought it was shady for him not mention commission before placing machines. I guess I have been spoiled with non-commission accts. Link to comment Share on other sites More sharing options...
sherlock Posted May 12, 2011 Share Posted May 12, 2011 Thanks guys for the 2 cents. I just thought it was shady for him not mention commission before placing machines. I guess I have been spoiled with non-commission accts. Listen to Mission -- he knows what he's talking about. Now as far as you thinking "it was shady" for him not mention commission until after your machines were in place, DON'T. It's the beginning of your business relationship with this guy. It's good practice to assume good intentions and give the guy the benefit of the doubt until he proves he doesn't deserve it. He could have just been so excited about getting your machines that he was telling everyone about it. In mentioning your machines to other business owners/managers, they may have asked him what kind of commission you were giving because maybe those owners/managers get something from their vendor. Understandably, that would lead him to question you about commissions. OR, he may have called several vending companies for machines when he called you. You responded first and got the location. Now, your customer is getting responses from those other companies AFTER you got your machines in place. Those other companies may be offering commission to steal the account from you since they know you are not "established" in that particular location. Now your customer is wondering if you are the guy to stick with. He's thinking, "Will this guy offer commission too or should I switch to another company who will?" Just 2 examples of why it may not have been shady dealings..... Link to comment Share on other sites More sharing options...
NinnJinn Posted May 12, 2011 Share Posted May 12, 2011 Very good points Sherlock.. + rep Link to comment Share on other sites More sharing options...
BoKnowsVending Posted May 13, 2011 Author Share Posted May 13, 2011 Thanks sherlock...that makes sense Link to comment Share on other sites More sharing options...
sbishop Posted May 16, 2011 Share Posted May 16, 2011 Paying commission or some other sort of consideration is pretty much the norm. As mentioned, 10% is also pretty much the standard for an account this size. Use this as an opportunity. I'd be willing to bet that you don't have a contract or service agreement with this location either. So here is what I would do. Go in and sit down with the guy in person. Explain that you don't recall any discussion about commission when you agreed to set the machines. Go on with that's its not a big deal, however, the prices you have are "noncommission" prices and that if he wants a commission some of the items will have to go up a nickel or dime. (Know before going in what prices you want to raise.) After going over this present him a "service agreement" to sign with the pertinent info filled in. (If you need a service agreement you can PM me with your e-mail and I'll be happy to send you one.) Now you will have a written agreement and in three months when he tries to change it again you can pull it out for reference. If he still wants to change at that point then it gives you a better negotiating position. Another benefit of a service agreement is that it helps to prove ownership and recover equipment in the unlikely event the location closes. I am with Mission, I always tell the location that I have accounts that want to keep the prices lower for their employees and so They do not get a commission. If they want a commission the prices will be higher. I had that conversation with the last 2 locs I landed (check my Blog I'm up to 7 new accounts for the year) Once of them said keep the prices lower and is not getting a commission and the 2nd said lets go somewhere in the middle. Each location is different. THE KEY IS RAISE YOUR PRICES IF HE WANTS A COMMISSION!!!! Link to comment Share on other sites More sharing options...
spdydre Posted May 16, 2011 Share Posted May 16, 2011 With commission what is the best way to set prices? Say if they want 10% commission should I raise my prices 10% also? I only have one commission account and they want $75 a month for 8 machines that do about $900-$1000 a month. I think this is too high but am I wrong? Link to comment Share on other sites More sharing options...
dogcow Posted May 16, 2011 Share Posted May 16, 2011 With commission what is the best way to set prices? Say if they want 10% commission should I raise my prices 10% also? I only have one commission account and they want $75 a month for 8 machines that do about $900-$1000 a month. I think this is too high but am I wrong? yes , commission shouldn't come out of your margin. Link to comment Share on other sites More sharing options...
mission vending Posted May 17, 2011 Share Posted May 17, 2011 With commission what is the best way to set prices? Say if they want 10% commission should I raise my prices 10% also? I only have one commission account and they want $75 a month for 8 machines that do about $900-$1000 a month. I think this is too high but am I wrong? Are you already paying the commission or do they you want you to start paying it. IMO 75 a month for the volume is a pretty good deal. at the 900/month figure that's a little more than 8% commission. Don't know what your current pricing structure is but if you are going to start paying this commission use it as a way to get a price increase, maybe not on everything but a nickel or dime on several categories would not be out an out of line request. Just be sure to go in and have the discussion with them first, don't just walk in there one day a raise prices without talking to someone first. Link to comment Share on other sites More sharing options...
RJT Posted May 25, 2011 Share Posted May 25, 2011 I agree with some of what has been said. However to say "10% is fair" is not accurate. It is not accurate without knowing what your current prices are and your COG's. If you went in at .75 candy .50 crackers, .55 can drinks, etc then 10% would not work (for me at least). Asking for a commission is all well and good and "fair" as long as the price set makes sense. He should have mentioned it to you before machines going in and prices set. Better yet you should have been very clear with him what was expected either by written agreement or verbal. Now you have to look at your current prices and decide is 10% “fair” or not. If not then you have to explain to him that you went in with pricing that did not reflect paying a commission and you need to adjust accordingly for it to work. If you cant make the numbers work with him in agreement then pull out and move on with a lesson learned. If you want to bear with it until you have a new location for the machines then do that. Your $75 commission for $900/$1000 gross account is "resonable". I try to stay away from set amounts and do a precentage. Link to comment Share on other sites More sharing options...
caserri Posted May 25, 2011 Share Posted May 25, 2011 $75 for $800-$900? Where do I sign up? Sent using the Tapatalk Forum Viewer for Android. Link to comment Share on other sites More sharing options...
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