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Sunday, February 27, 2005

Museums, Malls, and SuperMarkets

Lately I've been thinking alot about "Good Locations". I am often asked what locations are best and I never know exactly what to tell people. As I said yesterday the two primary things I look for are corporate offices and low hassle accounts. Now while these locations are nice they simply don't make that much money - usually about $40 - $50 a month. Now don't get me wrong. So long as you buy machines at the right price you'll have a nice ROI (return on investment). I could easily run my business on only small locations - I just wouldn't have a huge profit (in dollars - NOT percentage).

I like having several "big locations" that gross $200+ a month. The best way to get these locations is to approach Museums, Malls, and Supermarkets. The locations don't rely on the comission income (but they do expect 25%) so the "hassle factor" is very low plus the shear volume of foot-traffic makes it a vendor's dream. Realize that most of these accountants have contracts with Vending Management companies - so placement will be difficult. I only acquire about 3-4 a year (I also lose about 1 a year) but that still leaves me with a net gain in my number of "big locations". I've found that if you use a specialized machine (i.e. stickers or super balls) that does not compete directly with the current machines a manager will let you place your machine there.

Once you have about a dozen or so of these locations your monthly numbers start looking real nice. Personally I hit the my "small office" locations during the week. This revenue pays for all my costs. At the end of each month I hit my "big locations" and they provide me with my profit. It is a two tiered system that has worked very well for me. Good Luck!

Saturday, February 26, 2005

The trouble with comissions

The subject of comissions is always a troubling one for both new and experienced operators. Unfortunately there really isn't any easy answer to the question. Typically I only pay comissions to "Bulk Candy" locations and usually NEVER pay comissions on "Snack/Soda" locations. T his is due to profit calculations - being that bulk candy has a greater margin than snack or sodas.

Here is the problem I run into though. About this time of year (i.e. the holiday spending season) many location owners are low on cash. They sit and stare at my machine all day thinking about how the comission money in the will solve their problem. They dream and hope that it'll be a "good comission" this month. Of course when I get there and the comission isn't as high as they hoped they get mad at me - the vending guy. If the consequences weren't so dire to my business (they may kick me out hoping to get a "better" machine) the situation would be comical. I mean why get made at me? I'm not the one who spent too much money during the holiday.

Anyway because of this recurring problem I've developed a few placement strategies you should implement and follow. I prefer to use a charity system (local charities only), and perfer corporate locations were the money goes into an "employee party fund", and above all I avoid locations if the owners are constantly telling me stories of financial woe.

I realize the "newbies" out there will take any location in the beginning (just as I did) but as you grow begin to filter and sort your potential locations. You want consistent earners with as little hassle as possible. No one (other than you) should be depending on he money coming out of your machine.

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