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Vending Management Companies


jasonkw

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Hi all,

I'm new to this board here and have a few questions about vending management companies. Already have a bunch of machines currently on location doing business but looking to expand.

I still haven't quite figured out how these vending management companies work. How exactly do you become a vendor for them, and what are the terms that are usually given? Do they let small independents become their vendors, or are they looking for someone larger?

A lot of machines are run by Canteen and Aramark in my area. Are these food service providers franchised? I can't seem to find much information on them - I'm guessing it's a hefty investment to begin one of these operations?

Thanks

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There are several vending management companies (in an effort of full disclosure Blue Moose is one). Best Vendors is owned by Canteen. They provide their franchise owners National Accounts under that franchise agreement. If the National chain has locations in areas not serviced by Canteen (or one of their vending partners) then they will contact indepedent vending companies in those areas. To accept the business you must install the same equipment required by the National Contract at the same set pricing. They will also let you know how much commission you must pay each month based on that pricing. Basically they will offer you the same deal as their franchise companies, except they don't give you free equipment. You must report your sales by machine and product type each month along with your monthly commission check. One caution with Best Vendors would be taking on too much of their business. If you live in a area that is under served by Canteen you may receive a long list of accounts but as soon as someone becomes a Canteen franchise company they will give all of your locations to the new company. So if you have taken on a bunch of accounts you can lose a bunch unexpectedly. They do not hide this fact so you know when you get on board you might lose them.

Blue Moose is also connected to Canteen. We do not compete or approach any account handled by Canteen in Southern California. If we should come across one that wants to change vendors it is turned directly over to them. Of course that also applies to Canteen franchise companies such as Rainbow Vending in San Diego, North County Vending in Riverside. If we contact an account and then discover they are serviced by Canteen/Rainbow/NCV...we turn the call into a customer service call by explaining how lucky they are to have them as their vending company. We play up Rainbow Vending being the NAMA Vendor of the year in 2010. Then we find out what the problem is and get it resolved with a phone call to our Canteen/Rainbow contact. Then we follow up in a couple of days to be sure the problem is fixed.

Vending Solutions is another vending management company. I am not connected to that company so I can't help you with details on how they operate but I do understand you can get some solid locations with them.

Poplady

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There are several vending management companies (in an effort of full disclosure Blue Moose is one). Best Vendors is owned by Canteen. They provide their franchise owners National Accounts under that franchise agreement. If the National chain has locations in areas not serviced by Canteen (or one of their vending partners) then they will contact indepedent vending companies in those areas. To accept the business you must install the same equipment required by the National Contract at the same set pricing. They will also let you know how much commission you must pay each month based on that pricing. Basically they will offer you the same deal as their franchise companies, except they don't give you free equipment. You must report your sales by machine and product type each month along with your monthly commission check. One caution with Best Vendors would be taking on too much of their business. If you live in a area that is under served by Canteen you may receive a long list of accounts but as soon as someone becomes a Canteen franchise company they will give all of your locations to the new company. So if you have taken on a bunch of accounts you can lose a bunch unexpectedly. They do not hide this fact so you know when you get on board you might lose them.

Blue Moose is also connected to Canteen. We do not compete or approach any account handled by Canteen in Southern California. If we should come across one that wants to change vendors it is turned directly over to them. Of course that also applies to Canteen franchise companies such as Rainbow Vending in San Diego, North County Vending in Riverside. If we contact an account and then discover they are serviced by Canteen/Rainbow/NCV...we turn the call into a customer service call by explaining how lucky they are to have them as their vending company. We play up Rainbow Vending being the NAMA Vendor of the year in 2010. Then we find out what the problem is and get it resolved with a phone call to our Canteen/Rainbow contact. Then we follow up in a couple of days to be sure the problem is fixed.

Vending Solutions is another vending management company. I am not connected to that company so I can't help you with details on how they operate but I do understand you can get some solid locations with them.

Poplady

Had a friend that lost over half his business when Canteen acquired Best Vendors. :-[

Like Bev said, they can be a good opportunity for some quick and easy growth but don't count on them long term. One that I have done business with in the past is International Vending Management, these guys are tied to the Wittern group and for the most part if you want to do a deal with them you have to buy Wittern equipment from them.

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Had a friend that lost over half his business when Canteen acquired Best Vendors. :-[

Like Bev said, they can be a good opportunity for some quick and easy growth but don't count on them long term. One that I have done business with in the past is International Vending Management, these guys are tied to the Wittern group and for the most part if you want to do a deal with them you have to buy Wittern equipment from them.

Yep that group does a good job finding decent locations for their machines. I had several of their car dealers when they first came out with the custom fronts. They were great for me.

Poplady

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If I wanted to get some information on Wittern or Canteen in my area, who would I be looking to contact to see what they can offer?

Canteen would not do anything for you in your area because they are a vending company and a competitor. If you want to deal with Best Vendors (owned by Canteen) I wouldn’t bother either. Why would you want to deal with a competitor for accounts?

Wittern can be contacted direct and can offer machines (USI) and have a division for vending management that could get you some accounts possibly Wittern is not a vending company so they are "ok" to deal with for accounts.

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If I wanted to get some information on Wittern or Canteen in my area, who would I be looking to contact to see what they can offer?

To get additional information about Wittern here is a link.

http://www.wittern.com/About_Us/

For Best Vendors here is their link.

http://www.bestvendors.com/

Both of these companies are good reputable companies which have a place in vending.

Poplady

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Their are MANY vending management companies that are not owned or associated with the Canteen or Aramark. Canteen and Aramark are known for signing national contracts on their own without the vending management arm being involved with companies like hotel chains, hospitals and such. You are not going to be able to “work with them” on any accounts. They do not sub out their vending unless they just have to because of logistics of a large national contract and it makes sense to sub a few locations out. My old company did an account for Canteen because it was out of their way. They were obligated to do the account because of a national contract but it made better sense to sub it out.

Here is my advice, stay away from vending management companies all together. Can you gain some business with them? Yes, you can but at what cost. I will give you a couple examples. I was a sales manager for a company that had a contract with Best Vendors to do all the Lowes stores in a certain area. We had like 7 of them doing about $250K a year in revenue. Best Vendors lost the contract and so did we. That’s $250k gone with the stroke of a pen. In the end they were “ok” accounts but far from great. The reason is, the requirements by the vending management company. In order for vending management companies to strike these deals they set the bar pretty high (at times) and that is their selling tool to get these accounts. I had a vending management company call me the other day and say they had a 60 person account and wanted new equipment, card readers, 18% commission and all sorts of crazy stuff. I told them no thank you. They offer things like remote monitoring, glass front beverage machines, food machines, etc that makes no sense in the account. They can be reasonable in their requirements but in the end it comes down to commissions.

I have seen stuff like that happen and you can loose accounts and not do a thing wrong. Also keep in mind these vending management companies are going to take a piece of the pie from all accounts through them. For what? Being a middle person and striking the deal? Just strike your own deals and not mess with vending management companies. Why give a portion of the profits to a company that does very little other than work the original deal and you do all the work.

Like I said, you can gain some business that you might not have gotten but to me it is not worth the hassle. I would just assume do it on my own. In my area their is a large independent and their attitude is the same way, they will not do any vending management companies accounts.

Another huge disadvantage is when it comes time to sell your company it is worth very little if you are heavy with vending management company accounts. The value of a vending company is worth very little unless they are your direct accounts and contracts. If you become sick, want to retire, etc and need/want to sell you want all the accounts to be yours and the main worth to be your company. Basing your company off of vending management company business is a VERY weak business model and not a solid foundation. In the end it can cause many problems because of the possibility of in-stability.

IMO companies/corporations are crazy to sign up with vending management companies to handle their accounts. They take the power away from their local managers in their area to make decisions. They take away some a chance to use some good/great vendors because of letting a vending management company handle their account. Just like in my area, myself along with some other great vending companies will not do vending management accounts so those companies will not even get a chance at our service. They are stuck with who is willing to do accounts for that particular vending management company. What happens if their service is terrible? Their hands are tied because their corporate office did a national contract with a vending management company. I have seen that many times where the company hates their vending company but their hands were tied to who they had because of a vending management company. They also could possibly make more money if the vending management company was not in the picture taking a percentage of the revenue. Let corporate set a “standard “ to go by and let their local managers hire the vending company they see fit. That way if they are not performing up to their expected standard then the manager can find another company.

Vending management companies have been around forever and will continue to play a part of the vending industry. You just have to decide if you want to risk dealing with them and giving them a portion of your profits. Like mission said you can gain some business you might not had a chance at but to me the risk reward factor is not worth it to me. I stay away from using vm companies and reccomend the same to my clients. Some folks might say stay away from consultants and learn on your own for free. So it is a matter of what works for you and your business. :) Good luck!!!

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