New to vending - seeking advice and guidance.

[Happyvending]

Hi Eustace,

Dave's given you some good advice.....use it. I've read you initial post and if I applied them to my business I'd be down to 40-50 sited machines, which is no use to me as I run a full time business.

But is the extra profit you earn through the 40-50 additional machines worth the additional work they cause you?

My feeling is that this business is about three elements:-

- maximising the profit at each site;
- using leverage to multiple profits across sites;
- minimising costs.

Those three elements needs to be balanced carefully. I suspect that a lot of people in this business would realise they are actually losing money if they sat down and crunched the numbers. Personally, I think 20% is a huge dent on your revenue when you take account of maintenance/servicing, visits, travel expenses/fuel, vehicle insurance, vehicle maintenance, business insurance, marketing, re-investment in machines and other equipment, sundries, not to mention your own salary/drawings.

I was running some numbers on a franchise the other day, and I figured out that with 100 tower machines, I'd probably be turning-over about £20k. by Year Two, at the most. Of that, 70% would come out of the business in overhead. What was left over - about £4-5k. - would be for salary/drawings and re-investment. Actually, that's pretty optimistic.

do you know what mate i didnt even read your post then apart from the first line....

i am not being rude here at all but as the saying goes''you have two ears and one mouth,use them in that order'' as i said not being rude but you really need to listen to what ppl are telling you here or you will be spending so much tme trying to get these no com sites that you will be missing out on some great ones selling shed loads.....


keep it simple,cultivate each site,pay them a com everytime you visit and everyones a winner..look too deep into it all and you will do your own head in please believe me..

Happy dave

[Happyvending]

I can understand all the working outs your are doing and profit margins etc But I think you are looking into it far too much( IMO) Unless of course you are about to spend massive amounts of cash to start off??but best thing to do is buy a few second hand machines a bit of stock and see how it goes.
Don’t get me Wrong this is just what I have done and is working for me. This is also not my full time job and more of a hobby at the moment.

If I'm going to put down my own money, then it's a business, whether I am running 10 machines or 100 machines. I'm happy to take the risk, and I don't mind working with probabilities and 'unknowns', but it will be after carrying out the necessary research.

I think vending looks like a tough business. Like you, I'm starting off by buying cheap machines, doing them up and so on. I think that's the right approach rather than going with a franchise.

Having thought about this further, the problem I see with franchises is that you pay high-end prices for the machines and stock, and in doing so lose a great deal of value (depreciation of machines) and stock (loss of profit). I think the right way to proceed and build-in value and profit is to spend as little as possible on machines and obtain the best value stock you can find.

my new friend



listen and listen good buddy..


VENDING IS NOT FOR YOU..


Happy Dave

[david@naughtyvend]

Hello Eustace and welcome to the forum of opinions.

Firstly I am a former franchisor in vending and although no longer use said legal structure still retain the good bits of what was learned from operating as, obviously you have performed extensive diligence and are an intelligent individual so far as to say that perhaps you are either someone looking to start up as a franchisor under your own brand, are a reporter or student researching a paper. However hats off to you regardless for doing your homework...

What's been said to you so far is correct from the perspective of an operator (and absolutely correct) as well as your own opening statement, the 'perspective' is why I opened by telling you a little about me because whilst independents have more lateral scope the existence is far more fragile in that not only could other independents come looking for your business but your customers could sign exclusive national agreements with larger operators whom most likely will be franchisors or similar. The reason that multiple machines 'towers' as most refer to them (because that is the vending niche they are involved in) may exist in one site is that your venues really don't give a damn, rather you do as do other operators in vending... the commission - who cares - if you gave them 100% you would still be giving them sweetie money in any venue where the public come to spend i.e. bars, shops and so forth. In other words your turnover in multiple sites matters to you but in that one site you have that one relationship compare your commission / sales to their turnover. So how important are you in their mind? To understand your business look at it from every angle not just your own.

You seem to have nailed most of the other fundamentals (too well) and yet have only looked at one type of vending, towers... which is contradictory to your apparent diligence to date- what about healthy vending? Now 'happyvending' is correct about the zero percent commission and when they appear take them with both hands but do not go looking for them or base your business model around them.

[PGBrew]

Dave, You will be pleased to know......you are correct!

Pete

[Eustace]

Hello Eustace and welcome to the forum of opinions.

Firstly I am a former franchisor in vending and although no longer use said legal structure still retain the good bits of what was learned from operating as, obviously you have performed extensive diligence and are an intelligent individual so far as to say that perhaps you are either someone looking to start up as a franchisor under your own brand, are a reporter or student researching a paper. However hats off to you regardless for doing your homework...

What's been said to you so far is correct from the perspective of an operator (and absolutely correct) as well as your own opening statement, the 'perspective' is why I opened by telling you a little about me because whilst independents have more lateral scope the existence is far more fragile in that not only could other independents come looking for your business but your customers could sign exclusive national agreements with larger operators whom most likely will be franchisors or similar. The reason that multiple machines 'towers' as most refer to them (because that is the vending niche they are involved in) may exist in one site is that your venues really don't give a damn, rather you do as do other operators in vending... the commission - who cares - if you gave them 100% you would still be giving them sweetie money in any venue where the public come to spend i.e. bars, shops and so forth. In other words your turnover in multiple sites matters to you but in that one site you have that one relationship compare your commission / sales to their turnover. So how important are you in their mind? To understand your business look at it from every angle not just your own.

You seem to have nailed most of the other fundamentals (too well) and yet have only looked at one type of vending, towers... which is contradictory to your apparent diligence to date- what about healthy vending? Now 'happyvending' is correct about the zero percent commission and when they appear take them with both hands but do not go looking for them or base your business model around them.

That's exactly what I'm going to do.

[Eustace]

I can understand all the working outs your are doing and profit margins etc But I think you are looking into it far too much( IMO) Unless of course you are about to spend massive amounts of cash to start off??but best thing to do is buy a few second hand machines a bit of stock and see how it goes.
Don’t get me Wrong this is just what I have done and is working for me. This is also not my full time job and more of a hobby at the moment.

If I'm going to put down my own money, then it's a business, whether I am running 10 machines or 100 machines. I'm happy to take the risk, and I don't mind working with probabilities and 'unknowns', but it will be after carrying out the necessary research.

I think vending looks like a tough business. Like you, I'm starting off by buying cheap machines, doing them up and so on. I think that's the right approach rather than going with a franchise.

Having thought about this further, the problem I see with franchises is that you pay high-end prices for the machines and stock, and in doing so lose a great deal of value (depreciation of machines) and stock (loss of profit). I think the right way to proceed and build-in value and profit is to spend as little as possible on machines and obtain the best value stock you can find.

my new friend



listen and listen good buddy..


VENDING IS NOT FOR YOU..


Happy Dave

Don't be daft. We've never even met. I'll see if it's for me and make up my own mind.

[Happyvending]

i dont need to meet you to know that you will either do as we are all telling you or not get involved...mark my words,save this threas somewhere and look at it again in 6mnths time and you will see what everyone has told you is the only way to do this...

wait and see

[Eustace]

Thanks for the advice - I suspect you're right, and I'd rather start that way.

Anyway, sorry we couldn't do business on the machines - all the best.

[Happyvending]

what machines i dont have any?

[valiant016]

Having read through the entire thread I tend to agree that Eustace's approach is at variance with the established way that all other vendors do business, Re: Commission etc.

Although I believe that many of the points raised against Eustace's business ideas are valid, specifically that he will miss out on a load of good sites that want commission. I am nevertheless intrigued to see how he does.
So can I firstly ask Eustace to stay with the Forum and update us all, in say, 6 months on how his approach is working, or not as the case may be.
For the rest of the Forum, treat it as an experiment, if it fails we can still offer sound advice and help, if he succeeds, then it maybe something that we can all try.

Lets wait and see!

Either way it causes no harm to the rest of us, so good luck Eustace!

Valiant