Vending?

Anyone have experience in the vending business? A friend of my got involved with a new vending product, Buzz Bites - (http://www.vendingsystems.com/) and is doing extremely well, I’ve done some research and it seems like a good product with valid returns, im just curios what others think and if anyone has any good, bad or overall experiences in vending business.

Thanks

C-Man

My niece's husband owns vending routes. My uncle owns a Mission Tortilla route.

Basically, it's selling. They tell you all you have to do is set up a machine and it sells itself, but it's not that easy. You need permission to set up a vending machine (or in the case of a product like tortillas, you need room for a table or a rack), and quite often you pay for that privilege. Ever wondered why the Lays potato chip section in the grocery store is soooo big? -- because Frito-Lay buys the space, in a constant competition with other potato chip vendors. Some days, Wise or Golden Flake might decide to pay a higher price for an extra two or four feet of space, and then Frito Lay might come back and bid higher, effectively evicting the other potato chip manufacturers.

When you own your own route, you have all the hassles of a business owner -- liability insurance, tax accounting, pre-payment of income tax, collecting employee withholdings, etc. There's also purchasing a suitable vehicle to transport your goods (and in the case of a vending machine business, a truck capable of loading, transporting, and off-loading enormously heavy machines that can be quite expensive), maintaining the vehicle, insurance, etc.

It can be difficult to establish a route. My nephew-in-law (NIL) spent the first year living off of his parents (he, his wife, and two (then) children), as he tried to find a way to evict the current vendors, and establish his own machines in their place. He's been at it about eight years now, and quite successful -- enough to build his own very nice house. You really have to be a good salesperson not only to promote your own product, but to make the other guy seem incompetent and stupid, so that they like you better. This is what it's like to break into an established territory. It's quite cut-throat, and if you rest for a moment, another guy is gonna do it to you, right back!

My uncle was working for a potato chip manufacturer when they decided to go from having employees who ran routes, to having independent contractors. The initial experiment was a massive failure. They offered to sell routes to current employees, and my uncle tried it out. Unfortunately, the company kept imposing sales and prices that were unsupportable compared to the cost they were charging the route operators, and my uncle lost money hand over fist. When he left a year later, he owed the company nearly $40,000, and had to declare bankruptcy.

It was my cousin (then 12) and myself who persuaded him to get into Mission Tortillas. He's been an owner of a route in a rural area of a midwestern state for about 16 years now (which means, unlike my NIL who didn't have to drive far, my uncle puts a thousand miles a week or more on his company truck -- but my NIL has to compete harder for city business, while in rural areas, they are sometimes in grateful tears for seeing the product finally arrive on their shores!). About 9 years ago, he hired his first part time employee, and a year later put that person in full time. He now has three employees, and for the first time in all those years is able to take a vacation. He runs a route same as his employees -- and he decided to sell a portion of his territory to that first employee, so he will now become an owner!

You have the usual pressures of small business ownership, especially the long hours, the lack of vacations, etc. We haven't seen NIL at a family function, at Christmas, at T-giving or whatever for three years. I haven't seen my uncle in 10 years, because he can't come see me (I'm making a point to go see them this Xmas). You can't really decide to take a day off, because that means your product goes stale, and that will be the day some competing vendor comes in and uses your stale product against you, and takes your space, and you show up the next day to find your product packaged up, and your table shoved out the back door.

Once, my uncle fell quite ill -- he was running the route with full blown pneumonia. After two days of that, my aunt called me with a plan. She would take two days off work and run the route, which would put me at the end of the semester, and I would drive down from school and run the route until he was well (which was four days). My cousin was allowed to stay out of school and help me, since he was familiar with the route and the store managers. So, between the three of us, we managed his route for a week (tortillias is a six-day-a-week business, which is okay, because bread routes are SEVEN!), while he recovered. It was either that, or allow the business to fail. This was back when he was the only employee.

Sorry that was long. My uncle loves it, and my NIL loves it. There's lots of money to be made, but like many other small businesses, it depends A GREAT DEAL on your dedication to the business, your determination to do well even if it means you don't take vacations for a decade, etc. It also depends on your sales ability -- my uncle is a master salesperson of the old school, capable of selling your own watch back to you, without working on a script! My NIL is personable and charming, and very dedicated to succeeding, because he wants the nicer things in life for himself and his family. Vending is not a "set it and forget it" kind of job, nor is it the kind of job where you can take a day off now and then because you're sick, you're injured, or you just feel like it. It's cut-throat, but it's very rewarding, and for many is a path to if not wealth, at least to middle-class comfort, without having to work for The Man.

Wow, I just happened to click on this thread while passing through but that was an extremely interesting post, Puck. Thanks so much for sharing.

I think nobody here is more qualified for the "Been-There-Done-That" award than Puck. Whether it is timber leases or tortilla routes, Puck either has first-hand experience, or knows someone close who does, in that subject.

P.S.: I mean that as a positive comment. I made another positive comment a few months back about another forum member which included the word "sarcastic" and I think it was taken the wrong way. :o

Feh! -- I think we've just about covered most of my areas of expertise, that's all! My dad and my uncle were step-van vendors all their working lives -- bread, potato chips (mainly), etc. Notice I can't chime in much on the insurance and annuity threads -- wayyy outside my areas of expertise! If it's blue collar or low class -- and especially if it involved a little undetected thievery or underhandedness -- my ancestors have probably done it. Thanks, though!

BTW, today is an excellent example of the dangers in taking a day off from vending work. I teach at a four-year university, and there's a little room off the hallway with three soda machines (all serviced by the same vendor) and a snack machine serviced by a second vendor. It appears the soda guy took the day off yesterday, or for some reason, decided not to service the machines yesterday. So, the two most popular machines (with water and fruit juices) are empty, and the third -- filled with ridiculous caffeine double-shot drinks and some new-agey infusion blah-blahs) is being ignored.

Now, by all that is right and holy, a competing soda vendor could probably come in, and with a few minutes talk, convince the university to evict that vendor, and put his machines in their place instead (providing for the usual per-sale kickbacks, rent for the floor space, which reimburses the school for utilities used, etc). If he's a pretty good vendor, he probably has another guy who does nothing but install the machines, and he could call him, and in a couple hours, have fancy new machines up here, filled with the kinds of things we in this building like to drink, and none of the stuff we don't like.

It's a day like this -- where your regular vendor appears to have let you down -- when an enterprising competitor can swoop in, and take away your biggest client from you.

And that's why you never take a day off.

Speaking of timber, it made #5 in the this top 10 investement list of 2007! This is some wacky stuff! I found it while looking at that link for Infinite Banking.

https://www.nuwireinvestor.com/articles/2007s-top-10-investments-under-25000-51231.aspx

#11 should be invest in Kool-aid and Adidas sweatsuits and share with your friends after losing $25,000 in one of these ideas.

So, did you ever get into the Buzz Bites business?

A friend of mine sold his 4 vending machines - they were combination soda and snack machines. His business was pretty small scale obviously, but he enjoyed it overall. We were getting ready to deploy at the time he sold them - he didn't want to burden his wife with it while he was gone. He had one machine in a business office building, and another one in a high school faculty office - I don't remember where the others were located. He said he spent one day a week refilling the machines, usually on a Saturday, and he would usually take one of his kids with him to help. And he spent half a day every two weeks buying supplies. He claimed to earn about $260/month per machine after expenses, which isn't bad considering the small amount of time he spent working on it.

Check out this business opportunity, it's working for myself and thousands others.

Goodluck,
Benjamin

yeah selling. which means theres a peak anf offpeak.