andyinchville Posted August 19, 2011 Share Posted August 19, 2011 HI All, I have expanded my vending to the point where I now want a driver to work full time (actually about 36 hours over 3 days). The route the driver would be responsible for would pull in about $1750 gross weekly. (3 days he is responsible for....I would vend the other 2 days myself and used the days he is out vending to scout for more sites or do other business related things / repairs etc...). My question is how much would you pay to the driver in the situation? (should the pay be based on a flat hourly rate? (if so what amount), A base rate plus commission (if so what base and what percentage?) or straight commission (if so what percent). The driver is experienced in vending and is mechanically very good (can fix machines and the truck itself if it breaks). The driver in this situation wants $400 for his 3 days...is that fair? How would you pay your help? FWIW... I typically price chips at 50 cents (cost is about 19 cents), Nabs at 50 cents (cost about 15 cents), cakes at 75 cents (cost 41 cents) and candies at 75 cents (cost about 49 cents). Machine vends accounts for about $1375 of the $1750 gross weekly sales Convenience stores account for about $375 weekly sales (for convenience stores we have the same costs above but sell chips to stores for 35 cents, nabs for 30 cents, and cakes for 75 dents)...Typically less profit per piece w/ a store BUT it does overall increase business income. Other costs : $500 / yr business insurance , $500 / yr vehicle insurance , $200 / month storage fees , Gas averages about $85 per week (his 3 days) plus another $75 for my 2 days.... (taxes ? , maintenance, ?) aarg....the more I look at costs maybe he should only be paid $100 !...OK, I realize that probably won't work So what do you all think? Thanks in advance for any and all help. Andrew Link to comment Share on other sites More sharing options...
mission vending Posted August 19, 2011 Share Posted August 19, 2011 HI All, I have expanded my vending to the point where I now want a driver to work full time (actually about 36 hours over 3 days). The route the driver would be responsible for would pull in about $1750 gross weekly. (3 days he is responsible for....I would vend the other 2 days myself and used the days he is out vending to scout for more sites or do other business related things / repairs etc...). My question is how much would you pay to the driver in the situation? (should the pay be based on a flat hourly rate? (if so what amount), A base rate plus commission (if so what base and what percentage?) or straight commission (if so what percent). The driver is experienced in vending and is mechanically very good (can fix machines and the truck itself if it breaks). The driver in this situation wants $400 for his 3 days...is that fair? How would you pay your help? FWIW... I typically price chips at 50 cents (cost is about 19 cents), Nabs at 50 cents (cost about 15 cents), cakes at 75 cents (cost 41 cents) and candies at 75 cents (cost about 49 cents). Machine vends accounts for about $1375 of the $1750 gross weekly sales Convenience stores account for about $375 weekly sales (for convenience stores we have the same costs above but sell chips to stores for 35 cents, nabs for 30 cents, and cakes for 75 dents)...Typically less profit per piece w/ a store BUT it does overall increase business income. Other costs : $500 / yr business insurance , $500 / yr vehicle insurance , $200 / month storage fees , Gas averages about $85 per week (his 3 days) plus another $75 for my 2 days.... (taxes ? , maintenance, ?) aarg....the more I look at costs maybe he should only be paid $100 !...OK, I realize that probably won't work So what do you all think? Thanks in advance for any and all help. Andrew Based on your comments about pricing I'd first take a much closer look at my business from the numbers side. At 1750 a week that's 91k a year. In multiple route operations a full time route driver should be pulling somewhere in the neighborhood of 225-250K, and that's without remote monitoring and prekitting technology. So on a percentage basis your payroll is going to suck out a lot of your free cash flow. Are you paying cash or doing a real payroll? I know many people pay cash under the table but sooner or later doing things that way will catch up to you. IMO if you want to survive over the long term you should being doing things the right way and as much as it sucks..... paying the appropriate taxes. Payroll taxes are a part of that. Payroll taxes (social security and medicare) are an additional 7.65% on the gross payroll that the business is required pay. This is not the part that gets withheld from the employee's check which the employer is responsible for collecting. Then you will need to set up an account with your state for unemployment insurance, rates will vary depending on the state. This is also a percentage rate applied to gross payroll. OK, enough pontificating. .... for three days of work I'd be looking at somewhere between 300-400 gross pay. Link to comment Share on other sites More sharing options...
andyinchville Posted August 20, 2011 Author Share Posted August 20, 2011 HI, Thanks for the reply....You are right, there are a bunch of other expenses that probably need to be figured in as well. I wish I could get a route going that could pull in 225K a year.....WOW Right now we have a lot of small accounts BUT without them we would probably be making nearly zero....I am attempting to get some of the bigger ones BUT we are in a small area without a lot of large plants etc....so I guess for now it is small / medium accounts of nothing. I think I will try getting a PT person to let me get some time to better scout for other opportunities. Thanks! Andrew Link to comment Share on other sites More sharing options...
RJT Posted August 20, 2011 Share Posted August 20, 2011 One way to hire a route driver is to put him in business. What I mean is you sell him product each week and he pays you back with the money he pulls. Lance and other companies used to do it this way years ago. The first stock he buys on credit and then you work it out each week or every two weeks you settle up. This method makes the driver pay attention and take "stock" in his route and not just go through the motions of filling machines. Drivers on this method look at it like its "their route" and they take care of things better. You can still do a small base pay with this method but it makes him pay attention to lost product due to stales, being lazy, etc. The only thing you have to watch out for is the driver going to Sam's Club (or anywhere) and buying product cheaper than you are selling it to him and putting it in the machines. Link to comment Share on other sites More sharing options...
dogcow Posted August 20, 2011 Share Posted August 20, 2011 One way to hire a route driver is to put him in business. What I mean is you sell him product each week and he pays you back with the money he pulls. Lance and other companies used to do it this way years ago. The first stock he buys on credit and then you work it out each week or every two weeks you settle up. This method makes the driver pay attention and take "stock" in his route and not just go through the motions of filling machines. Drivers on this method look at it like its "their route" and they take care of things better. You can still do a small base pay with this method but it makes him pay attention to lost product due to stales, being lazy, etc. The only thing you have to watch out for is the driver going to Sam's Club (or anywhere) and buying product cheaper than you are selling it to him and putting it in the machines. this is how it works on lunch truck (roach coach) routes. the owner owns the trucks and the commissary and the drivers buy their product from the owner and pay a lease fee for the vehicle. Link to comment Share on other sites More sharing options...
ThankYouComeAgain Posted September 5, 2011 Share Posted September 5, 2011 thank you for "pontificating". Link to comment Share on other sites More sharing options...
andyinchville Posted September 5, 2011 Author Share Posted September 5, 2011 HI, Thanks for the additional ideas.....I do like the idea of having the drivers run the route and lease / buy product from me....on the flip side I have been toying w/ the idea of just paying a percentage of the gross receipts. Anybody out there do it that way (just paying out a percentage of the gross receipts)?...If so what is a fair percentage to pay out?....As an aside and please let me know what you think, I have a chance to service 80 bulk machines (gumball / candy )....most of the machines are close to where I am now BUT some of the machines will require driving to areas not on my regular rout (out of town)...The owner claims all the machines can be serviced in 1 long day or 2 shorter days...Owner wants service every 40 days and claims a gross of $500 per service....He wants to pay me 50% of the take after expenses (after taking out the cost of the goods sold and after gas expenses since I will use my vehicle). I figure I can service most of the route when I am doing my snack / drink machines and do the balance in a car.....50% sounds like a lot so I don't think I would want to make an offer like that to my route driver....On the flip side maybe 50% is needed in bulk vending since the take would be lower per service....Back figuring that the route my driver runs (assuming $1750 per week on his part of the route and the fact that I currently pay $400 works out to 23% of gross)....Do you think that is about right, too high or too low in terms of percent of pay? As far as cake and candy prices, I think I will have to move up a little....Right now we charge 75 cents for cakes and candies....My current cost on cakes is 45 cents each (up from 41 cents) and my candies (from Sams) is 55 cents each (up from 49 cents). To be honest, I have been somewhat reluctant to raise prices to non even quarter amounts because I worry about running out of change in the changers (I had a few stops w/ prices like 60 cents, 65 cents, 85 cents but the problem was dimes and especially nickles would get really low and sometimes the nickles would just about run out)....I know quite a number of vendors who charge upwards of a $1.00 for these items but in our area the only one that does that is Canteen....There are a couple other companies that charge 85 cents per piece for cake and candy. Andrew PS - since it was mentioned, sticky fingers are always a concern...I am not sure of a perfect way to ensure that it is not happening but I do try to track expenses VS income....I do make the driver keep fuel receipts and individually bag (ziplock) and label each stop so I know what kind of $$ are from each stop...I get all the lance / hostess paperwork so I know what my suppliers are charging me....I do the misc shopping at Sams so I know what I am spending there....On the average we have about 7 boxes of waste per week (to determine how many $$ are lost to waste I took the boxes for the week and counted each and every old item in them (per respective category...chip, cake, candy, nab, misc). Based on a 2 week 14 box average it was determined that each box of waste costs me about $23....Other than knowing costs vs $$ driver brings in any better way to determine if the driver has sticky fingers? Link to comment Share on other sites More sharing options...
dogcow Posted September 5, 2011 Share Posted September 5, 2011 HI, Thanks for the additional ideas.....I do like the idea of having the drivers run the route and lease / buy product from me....on the flip side I have been toying w/ the idea of just paying a percentage of the gross receipts. Anybody out there do it that way (just paying out a percentage of the gross receipts)?...If so what is a fair percentage to pay out?....As an aside and please let me know what you think, I have a chance to service 80 bulk machines (gumball / candy )....most of the machines are close to where I am now BUT some of the machines will require driving to areas not on my regular rout (out of town)...The owner claims all the machines can be serviced in 1 long day or 2 shorter days...Owner wants service every 40 days and claims a gross of $500 per service....He wants to pay me 50% of the take after expenses (after taking out the cost of the goods sold and after gas expenses since I will use my vehicle). I figure I can service most of the route when I am doing my snack / drink machines and do the balance in a car.....50% sounds like a lot so I don't think I would want to make an offer like that to my route driver....On the flip side maybe 50% is needed in bulk vending since the take would be lower per service....Back figuring that the route my driver runs (assuming $1750 per week on his part of the route and the fact that I currently pay $400 works out to 23% of gross)....Do you think that is about right, too high or too low in terms of percent of pay? As far as cake and candy prices, I think I will have to move up a little....Right now we charge 75 cents for cakes and candies....My current cost on cakes is 45 cents each (up from 41 cents) and my candies (from Sams) is 55 cents each (up from 49 cents). To be honest, I have been somewhat reluctant to raise prices to non even quarter amounts because I worry about running out of change in the changers (I had a few stops w/ prices like 60 cents, 65 cents, 85 cents but the problem was dimes and especially nickles would get really low and sometimes the nickles would just about run out)....I know quite a number of vendors who charge upwards of a $1.00 for these items but in our area the only one that does that is Canteen....There are a couple other companies that charge 85 cents per piece for cake and candy. Andrew PS - since it was mentioned, sticky fingers are always a concern...I am not sure of a perfect way to ensure that it is not happening but I do try to track expenses VS income....I do make the driver keep fuel receipts and individually bag (ziplock) and label each stop so I know what kind of $$ are from each stop...I get all the lance / hostess paperwork so I know what my suppliers are charging me....I do the misc shopping at Sams so I know what I am spending there....On the average we have about 7 boxes of waste per week (to determine how many $$ are lost to waste I took the boxes for the week and counted each and every old item in them (per respective category...chip, cake, candy, nab, misc). Based on a 2 week 14 box average it was determined that each box of waste costs me about $23....Other than knowing costs vs $$ driver brings in any better way to determine if the driver has sticky fingers? does your equipment have vend meters or account functions, if so have the driver take a meter reading on each service and log it. You can run the route behind him and check the meters now and then, also check that the changer levels are consistent. Link to comment Share on other sites More sharing options...
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