New to vending - seeking advice and guidance.

[Rossi fan]

I'll give the commission angle some further thought. But there is something about this that puzzles me.

Put yourself in the shoes of a site-owner. If we assume an average monthly take of £30.00 per machine, then 20% is somewhere between £72.00 to £216.00, depending on the number of machines.

Do people really jump at that? I just don't see how you can sell it, and even then many machines will take significantly lower than the average.

Maybe at 40-50% commission, it starts to look like serious money as long as you have sited multiple machines at the same location, but this is over the course of an entire year, so the monthly or quarterly payments are still going to be chicken feed. For instance, 50% commission on £30.00 average take with three machines works out at £540.00 p.a. or £45.00 p.m.

Wouldn't a small business owner just pay the overhead and put their own machine in???? Maybe the reason they don't is because they don't want the added overhead and they see it as free money? I can understand it in a garage or office or dentist's waiting room, and the like, because those people just won't want the hassle of self-managing it, but if I owned a shop or cinema or something similar involving retail, I'd wonder whether the money going into the machine could be going into my till, and maybe from there I'd reach the conclusion that 50% isn't enough! Why not 100%? Yes, it would involve an initial investment, but if you're a retailer anyway, then it's just a diversified part of your business, and if vending works so well, then why not?

Sorry if I'm not seeing something obvious.

Its often back pocket money Eustace. That said, you need to keep records of comissions paid for obvious reasons.

Anything above 20% would make tower vending less of a choice for an operator. Taking into account, machine damage; losses, product losses and other business costs, you have to have a good margin and sell lots of tubs.
Thanks,

Paul

[Eustace]

OK, well I've had some excellent advice. I'll follow-up on the points and maybe update you all once I've made a decision on how I wish to proceed.

Cheers,
Eustace.

[choice vending]

H4H and other charity machines are fine. I beleve you must be ready to change them over to commission machines if the signs are there for you to:-

1 expand a good site into a multipal machine mega site
2 ward off potential poaching from a operator offering commission

[Venderbase]

Hi Eustace,

The none commission/charity sites will always be the dregs after the 20% commission payers have had their pick. (With the odd exception)

I disagree with you Daz. Many of my H4H sites are excellent. I agree, site type is key however.

Paul

I knew you'd say that Paul. Which is why I said with exceptions.
I was really meaning the lower percentage unknown charity commissions.
Lately there are a lot of pubs doing Help 4 Heroes events, so you can get good sites this way, but as Brian says you need to be in a position where you can switch to commission if needs be. Which means you need to not be contracted to only pay a charity.

[Eustace]

The commission aspect to this is really interesting, and as much as I respect you blokes - you've made it in a tough business - I can't help but question your reasoning that commission must be paid.

To my (novice vendor) mind, a site-owner has no incentive to accept 20% commission when, for a relatively small investment, he can install the machines himself. It just doesn't compute with me.

The way I see it, I need to approach site-owners with this proposal:-

"I specialise in vending services. I will provide all vending services for your site, for no fee. You need do nothing. I will stock, insure, maintain, and service the machines. In return, all I ask of you is that you give me reasonable co-operation in positioning the machines on site and you allow me to retain 100% of the very modest revenues from each machine. This is because I make my money through a process of leverage, and it is only by siting a high volume of machines that I can earn a decent return, and thus provide your staff and customers with high-quality product, which in turn adds value to your business. If you agree to this arrangement, I can also provide you with a good level of service because I will be receiving a decent return. Simple. No rigmarole, no messing around with charities, no arguing over commissions".

I am tempted to try it and see how it translates into practice - I have a plan worked-out. I suspect I am going to be proved wrong and you wise guys are going to be proved right - but let's see.

[KASE]

I'm new so I cant comment too wisely, but I can see this working in doctors and maybe other such organisations, but I am not sure about pubs and clubs.

[Eustace]

Yes, it will probably go down better in places such as professional clinics and office-based businesses. It will be a harder sell in retail environments, but I can always adapt the pitch to different places.

I suspect our more experienced friends are going to be proved right on this one, though. What will probably happen is I'll get one or two to agree it, but the rest will insist on commissions.

But we'll see. I still think it's worth a go because if it works, it's an excellent business model - even if it's only a percentage of your sites. What I also like about it is that it focuses your mind on customer service and product. If you can provide quality product and good service, then people will still want to use the machines regardless of whether you're paying commission to the site-owner.

I know that's going to sound like so much waffle from someone sat behind a computer - so I'm going to give this a go!!! If I fail, I promise I'll let you know.

[Happyvending]

stop trying to complicate thing my friend..

you will be wasting alot of time and energy finding sites that dont mind not getting anything out of the vending...they will ask you who will clear all the empty pots capsuals ect..

i do alot of site finding and i can tell you here and now that no good site will just let you pout machines in for nothing..welcome aboard..keep things simple,offer a good service and a decent reason for them to say yes to you...if i were calling on a customer and i found out you were not paying them anything i would be in there like a flash...it business i am afraid mate..


good luck with it though..

Dave

[Coin Operated Group]

Offices yes you can get in on no commision but sales are crap and they go for from crap to worse after a couple of months. Doctors/dentists surgerys I can hardly see agreeing to sell sweets in as it would raise one or two questions regarding healthy eating and dont even bother going down the healthy vending route (you will lose a lot of money!!)

Had you started in this business maye ten years ago when it was a new concept you may have had some success but most landlords or business know commissions are paid. Also in a recession all businesses are looking at making extra revenue wherever possible and Im sure as soon as any zero commision sites see the money you take out they will either demand commision or get their own.

Saying all that though, give it a try!! Im sure if you are sucessful you will have many operators asking for a copy of your sales pitch. Good Luck!!!

[Eustace]

Fair enough. I suspect you're both right.