I have begun my training at Chow Time Vending, and I have to say that this job is much harder than I initially anticipated. There have been a number of challenges I had to face during my initial training. From vending routes to machine servicing, I will share some of the things I have learned so far that I did not expect in a series of blog posts.
The Business
My overall impressions of the vending business have changed dramatically since I began working with my friend and his vending business. Some people believe that vending is simple; all one has to do is put the machines out there, and the product will sell itself. People can make money while they sleep. In truth, there are many subtleties in the business like vending a good vending route.
It’s true that one could earn money while they slept, but getting contracts, machines, product, and hiring and managing quality vending route drivers to service machines and keep customers happy is not something one can do during sleep. It takes a lot of patience, know-how, and strong organizational skills to keep everything together and running smoothly.
During my time in vending and on a vending route, I have seen large to small warehouses filled with vending machines and product. Some were organized and easily accessible while others were thrown together with some thought into where things should be put. Since Chow Time Vending was in the process of moving to a new warehouse, there was not a lot of organization with some machines in a large truck, over a hundred machines grouped into one warehouse, and product stored between a small section of the front of the warehouse and stacked somewhat neatly in the back of another truck. My friend knew where everything was, but for me, learning everything for the first time, it was a difficult transition. Luckily, my friend was accommodating enough to allow me to customize where I wanted things to be in the truck I would be using for a vending route.
While on the vending route with my friend, he talked to me a lot about the state of the vending industry from his and other vendors’ perspectives. We also talked about telemetry and vending management systems and why they really have not become the standard in the vending industry. Basically, for those of you who have not ever owned a vending business, in vending everyone is taking a little bit of money from vendors, and vendors work extremely hard to make money for other people, namely the people who make the products that they sell.
The Upside of an Efficient Vending Route
Consider the profit they make from selling honey buns, for example. If a vendor purchases the honey bun for 30 cents a unit and sells them for a dollar, the profit made is 70 cents. The vendor pockets roughly 20% of that, so 14 cents. The remainder, 56 cents, goes to pay for the overhead expenses, such as vending route drivers, commissions, electricity, fuel, etc. If the vendor uses other services, such as telemetry, credit card readers, or vending management systems, the cost of using those is taken from the profit from selling those honey buns. In order for a vendor to maximize profit, they have to sell a variety of products people will want to buy in machines that are working all of the time, and they have to make sure a vending route is efficient enough to keep these products in supply.
Looking at vending from an insurance perspective, vending machine in their respective locations are like big “safes.” For example, a Royal 804 can hold up to 804 cans of soda, and if each can is sold for 75 cents, that’s $603 worth of product. If the machine sells well, then there will be a significant amount of money in the change box and bill validator. If at some point the machine gets broken into, all of that money is lost, and the vendor has to eat the costs. There is no getting that money back. As a result, finding an optimal vending route ensures that these “big safes” don’t just hold money.
What all of this made me realize was that if one truly loves vending, they will find success in it. This is not a business one enters to make money while doing nothing; it’s a very hands-on business when starting out. Once the vending business grows into a large company, then it is less hands-on, but before getting to that point, it takes a lot of hard work, organization, and negotiation to solidify locations and start selling product. A proper vending route, for example, is a hard thing to efficiently calculate.
I have other impressions and lessons learned, but I will share those in future blog posts. Be sure to read my expectations blog to see how far I have come with learning about vending.
Keep checking back with us at the Parlevel Vending Resources to learn more about the vending industry and how Parlevel Systems is here to help.
