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Is There Money To Make In Healthy Vending?

Is There Money to Make in Healthy Vending  An interview with Larry TownerLarry-headshot

Excerpts from the interview: Is There Money to Make In Healthy Vending

“Healthy vending products are hot, they constitute a growing market segment that needs to be capitalized on,but the business opportunities,…Is There Money to Make in Healthy Vending  you need to do serious research on any business opportunity before investing in that opportunity.”

Are there ways to offer Healthy vending solutions besides these Business opportunities?

“A business opportunity wants to sell you machines fronted with a healthy promotional sign. They promise to place the machines. They promise fabulous profits.” Is There Money to Make in Healthy Vending?

“I always suggest to my clients that they partner with a reputable equipment supplier, someone that has many years of experience in the vending industry, a company that has a reputation of providing excellent equipment at a fair price and provides outstanding customer service after the sale. My choice was Joe Nichols and his staff at A&M Equipment.”

“In regards to Healthy product promotion, he has many options available, from machines fully with Healthy Vend logos, to individual column selections promoted as healthy selections.”

“The opportunities abound, just be smart.  Get help from experienced people.  I can consult, Joe Nichols can consult, talk to other business people, network.  Be wary of someone promising the world.”

Listen to the interview:

Episode Transcript:

Tom Shivers:  Is There Money to Make in Healthy Vending   Hi, this is Tom Shivers with the Vending Business Show and Larry Towner is on the call here as well. Thanks for joining us, Larry.

Larry Towner,: How are you, Tom?

Tom Shivers: I’m hanging in there. Today we’re going to talk about healthy vending and I know that’s a very hot topic right now. All kinds of things even up in Congress are talking about it. So is there a business opportunity in vending healthy items?

Larry Towner,: Boy, Tom, you’re not kidding. Healthy vending products are hot right now. They really do constitute a growing market segment that needs to be capitalized on. But the business opportunities, I think you need to do some serious research on any business opportunity before investing into that opportunity.

Tom Shivers: Why do you say that?

Larry Towner,: Well, business is business and there’s several ways to approach business. But one thing all businesses have in common is a desire to make profit. Any business opportunity that offers something of value that you cannot get elsewhere, you now, the offering company wants to make a profit too. So if a guy comes to you and says, “You can make a million dollars in healthy vending,” why wouldn’t he be doing it himself? So I guess the question always is, is what are these opportunities offering? What makes them unique and valuable? If you’re going to spend some money on a business opportunity, what makes it unique? What makes it valuable?

Tom Shivers: Well, are there ways to offer healthy vending solutions besides these business opportunities?

Larry Towner,: Well, there’s always alternatives. The first place to start is with the business plan. Write down your business idea, conceptualize it on paper. Be very specific, run numbers, go in and see how many things you have to sell, do a break-even, things like that. It’s very, very important to write a business plan for any business that you get into. This exercise in writing a business plan can either save you or make you thousands and thousands and thousands of dollars.

Tom Shivers: Get more specific.

Larry Towner,: Well, let’s just say a business opportunity wants to sell you machines fronted with healthy promotional signs and they promise to place the machine, and they promise fabulous profits and what alternatives might be out there? Well, vending companies invest large amounts of money into their equipment. Vending is a very capital intensive business. I suggest to my clients that they partner with a reputable equipment supplier, someone that’s got lots of years of experience in the vending industry, has a great reputation of providing excellent equipment at fair prices and providing outstanding customer service after the sale. I’m going to tell you, if you don’t have customer service after the sale on your vending equipment, you are really going to be left out in trouble because equipment is equipment and I don’t care what business you’re in, if you have equipment, things are going to happen to it, you’re going to need either a repair source or somebody to help you troubleshoot these things. My choice has always been Joe Nichols and his staff at A&M Equipment. Joe started in the vending businesses and actually his family has been in the vending business for 35 years. He intrinsically understands the wants and needs of vending operators because he’s been one.

Larry Towner,: In regards to healthy product promotion, he has a bunch of options to choose from. You can get a machine that’s fully logoed, that has healthy signs on the front and you can customize those signs, you can do whatever you’d like as far as your own branding concept is on healthy vending. Or it can take you right down the column level, meaning if you just want to vend one or two items, he can do a promotional item up inside the machine that says, “These items are healthy” or whatever it is. But my goal always is, is if you can stay flexible with your promotions, it’s almost a better way to do it. You can promote your healthy selections as a part of your total product instead of the whole machine. But that takes you back to your business plan. You want that whole machine to be healthy products or do you want to mix those product selections? Have you even thought about it? A couple of words of caution, a typical snack machine costs around a thousand to 35 hundred dollars used, and 25 hundred to 5 thousand dollars new, depending on options and your customizations.

Larry Towner,: This snack machine should be fully electronic and have the ability to take credit cards and debit cards, as well as coin and paper currency, as it were, to take actual money. These are all things that, again, a reputable equipment supplier will be able to discuss your options and to give you the kind of information that you need as to whether or not this is going to be valuable to you. That’s always been my take. It’s just stay flexible and understand exactly what you’re trying to do.

Tom Shivers: You didn’t address the placement of machines.

Larry Towner,: Well, machine placement, it’s real common for people to promise they’ll place a machine out there for you and one of the things that we always say in that is is that sales basically is a … Or machine placement, if you want to call it that is a sales prop. It’s just a numbers game. If you call in enough people, you’re going to be able to place your equipment. In vending, placement is relatively easy. My numbers ran, and I’m not a stupendous sales person, but if I called on 10 businesses, I would end up placing one machine. And again, that’s a general average. It always seemed to work out this way. I had to make 50 calls before I got that one placement, but then I got 5 in a row. So when I took my long-term statistics, I knew if I knocked on enough doors, I would get the business.

Larry Towner,: But it depends on a bunch of factors and things like that. But that’s the kind of thing that if you think about it as it’s just a sales process, you need to do it. A lot of these business opportunities promise placement, but usually they provide you with locations that you could obtain by yourself with minimal efforts. I wouldn’t be paying a premium for placement of machines if they’re in marginally profitable locations. If there was so much profit to be made in these accounts, why would you be giving them away? That’s what I always say when it comes to the placement issues.

Tom Shivers: What else can you tell us about healthy vending?

Larry Towner,: Well, opportunities abound right now. As you said, we’ve got legislation going on in congress, we’ve got … It’s really a hot button right now. The big thing is just be smart. Get help from experienced people. I can consult, Joe Nichols can consult the vein of equipment. Talk to other people in the business, network. Just be wary of somebody promising you the world and talking about net profits and how you can place these and make tons and tons and tons of money. So that’s just always my words of advice to anybody that’s considering starting a new business is just be smart. Be patient. The opportunity will be there. The healthy vending opportunities are here now and they’ll continue to be here as our society gets more and more health conscious. And so be smart.

Tom Shivers: Well, thanks for sharing, Larry. Tell us about your business and what you do.

Larry Towner,: Well, we do consulting for the vending industry and we do videos and podcasts just like this. We can be reached at servicegroupinternational@earthlink.net. That’s S-E-R-V-I-C-E-G-R-O-U-P-I-N-T-E-R-N-A-T-I-O-N-A-L. I don’t know my own spelling. @earthlink.net. Anyway, that’s how you reach us. We would love to consult with you on any of your leads and things like that. We’re extremely reasonably priced and things like that. Or contact Joe at A&M Equipment.

Tom Shivers: You’ve been listening to Is There Money to Make in Healthy Vending at  the Vending Business Show, a production of A&M Equipment sales.

Other Vending Business Show blogs How To Start A Vending Machine Business

Should Schools Have Vending Machines

school vending machinesShould Schools Have Vending Machines  As many of you know, Congress has been debating legislature to regulate vending machines in all K-12 schools to require that vending machines provide only healthy options. The debate is rather interesting…

Should Schools Have Vending Machines  Those in support of this bill argue that:

  • There’s an obesity epidemic among America’s youth and vending machines are aggravating the problem.
  • The market for healthy snacks will improve if this action is taken.
  • Sugar and caffeine often cause students to lose attention and focus.

Should Schools Have Vending Machines  Those who oppose the bill argue that:

  • It’s not up to the schools to decide the eating habits of students or teachers.
  • Revenue from vending machines is used to pay for all kinds of school expenses like football uniforms, band trips, etc. Healthy snacks aren’t expected to bring in as much revenue.
  • In banning these machines, schools are saying that some foods are “bad.” Instead schools should provide educations on healthy eating and exercise habits.
  • Banning these foods on campus will cause some students to leave in search of their desired snack, increasing tardiness, etc.

Should Schools Have Vending Machines  See more details about the bill in Congress and how some representatives have voted.

Over at debate.org, a site that promotes open discussion between all members of the community on a wide range of topics, people have weighed in on this issue. As of today:

  • 81% say “Yes, schools should have vending machines” and
  • 19% say “No, schools should not have vending machines.”

In addition to the above arguments, there are a number of other arguments or opinions on this issue. On the “Yes” side of the debate:

Chele72 says “There is no reason a vending machine HAS to be filled with garbage they can just as easily be filled with fairly healthy choices like granola bars or 100 calorie packs or perhaps nuts and trail mixes.”

Kurta234 says, “IF the parent teaches the child the good and bad foods early on kids would know that its okay to have a snack every once in a while without overstuffing.”

alyssaa says, “There is nothing wrong with giving students choices about what they will consume.”

On the “No” side of the debate:

Anonymous says, “Putting vending machines in school is putting temptation in school for our kids – a poor choice on our part as adults.”

Anonymous says, “It wouldn’t be fair to have vending machines in school because the children that don’t have money to get vending food would feel left out and if a friend gave them money for vending foods they might not have the money they need and go after the kid who he has given the money to”

What’s your opinion on this debate?  Should Schools Have Vending Machines  More Vending Business Blogs   Gym Vending Machine

 

Best Vending Machine Products Of The Year

This year’s Best Vending Machine Products  is

The winners of the Automatic Merchandiser’s Readers Choice Awardsawards_product for “Products of the Year” were recently announced in a number of categories. Winners for new products of the year include:

  • Cookie category – LLC’s RUGER® Strawberry Wafers
  • Candy category – DOVE® Silky Smooth Cookies and Creme bar
  • Food category – Pierre Drive Thru Deluxe sandwich
  • Snack category – Kellogg’s Special K® Cracker Chips
  • Cold beverage category – Nestlé Sweet Leaf Tea
  • Hot beverage category – Barista Prima Coffeehouse® Vanilla Latte Café Beverage
  • Pastry category – Mrs. Freshley’s Cinnabon® Honey Bun

Learn the winners of micro markets, all-natural healthy, and OCS categories at VendingMarketWatch

 

Best Vending Machine Products are the cookie category winner, RUGER®, LLC’s RUGER® Strawberry Wafers, is served in multi-functional pouches perfect for traditional vending or micro markets, as is the Best Vending Machine Products diverse packaging sizes of the candy category winner Mars Chocolate North America DOVE® Brand Silky Smooth Cookies and Crème bar. The Best Vending Machine Products  in food category winner, AdvancePierre Foods Pierre Drive Thru Deluxe sandwich, fits the growing micro market trend by offering restaurant-style food.

Wellness focused, the Best Vending Machine Products snack category winner, Kellogg’s® Special K® Cracker Chips is regarded as a healthy choice snack low in sodium and calories. In addition, the cold beverage category winner, Nestlé Sweet Leaf Tea, is viewed as a healthy beverage alternative, made with pure cane sugar and no high-fructose corn syrup.

Consistent with the demand for café-quality office coffee, the Best Vending Machine Products is Barista Prima Coffeehouse® Vanilla Latte Café Beverage for the Keurig® Vue® system, has won the hot beverage category.

The last category is representative of a consumer favorite Best Vending Machine Products — Mrs. Freshley’s® Cinnabon® Honey Bunwhich won in this year’s pastry category.

Popular Vending Machine Snacks

Popular Vending Machine Snacks When it comes to using vending machines, we all snickers-barhave our fond associations. For many, vending machines bring connotations of going swimming when we were young and eagerly tucking into a packet of chips and cup of soup from the cafeteria’s vending machine after the swim! For others, vending machines may remind us of our university years, when the students would gather outside the lecture hall’s vending machine in order to stave off hunger pangs after a rather laborious two-hour lecture!

Whatever vending machines remind us of, it has to be said that what have now become an almost inherent feature of both urban and even rural landscapes around the world, never fail to cease in popularity. Given the somewhat unique longevity of what could be described in the modern era as being a slightly old-fashioned piece of equipment, it would be interesting to know what the most popular snacks are that people demand out of the time-honored vending machine.

Snickers

Popular Vending Machine Snacks  According to American Merchandiser’s the top selling snack in vending machines are Snickers. Part of this chocolate bar’s popularity is likely to stem from the fact that comprising of caramel, nougat, peanuts and chocolates, Snickers are not only mouth-wateringly delicious but they fill you up as well, which is, after all, what vending machines are all about.

Peanut M&Ms

Popular Vending Machine Snacks The great thing about Peanut M&Ms is not only do they taste great and keep you going until lunchtime, but they are also more nutritious and healthier than you may think. Being a predominantly peanut snack, with a light coating of chocolate, Peanut MandMs are the perfect way to satisfy those pangs of hunger and cravings for a sweet snack without devastating the diet.
Given the fact that Peanut MandMs are tasty, nutritious and filling, it is hardly surprising that they are one of the most popular snacks to be bought from vending machines, as they really can refuel you whilst you’re on the go!

Doritos

Popular Vending Machine Snacks Unlike a ‘conventional’ bag of chips, Doritos seem to go that bit further. This ultra-crunchy snack that comes in a variety and bold and unique flavors certainly fills an empty gap in stomachs and therefore have almost inevitably proven to be a popular choice of snack from vending machines around the world.

Twix

Popular Vending Machine Snacks The one thing that is great about the world-famous Twix is they are a fantastic accompaniment with a cup of coffee or tea. More often than not people will buy a coffee or tea from one vending machine and then choose a snack to go with it from another vending machine, which, according to American Merchandiser, is a decision which often falls in favour of a Twix.  More exciting videos at Vending Machine License: Is It Something You Need?

Harry Kelly has been installing vending machines across the UK for the best part of five years and therefore has a good understanding of what snacks are popular. Harry writes for numerous websites, including www.wholesalecoffeecompany.co.uk.

AMS Vending Machines Durable and Dependable

AMS Vending Machines Durable and Dependable  An interview with John Whitwell of Buffalo Rock

John has been buying AMS equipment for 8+ years and comments on the quality, customer appreciation from the factory and factory reps and the versatility of their machines.

“The reason I use them is they are really dependable. We use very few parts on them over the past 10 years.”

“The brand new machine that’s coming out this year; we just got a few in. The appearance of the machine is just unbelievable compared to what it used to be. The numbers are lit up, everything looks great, compared to what it used to look like.”

AMS Vending Machines Durable and Dependable  “Again, I couldn’t praise more about the durability and dependability of these machines compared to what we used to deal with… good product.”

“One other plus about the AMS refrigerated machines, the 35 and 39 inch machines, is they use the same parts. Besides the shelf being wider, I don’t have to carry duel parts.”

 

 

 

EPISODE TRANSCRIPT:

 

AMS Vending Machines Durable and Dependable  Tom: This is Tom Shivers with the Vending Business Show, and I’m here with John Whitwell, who is the market equipment manager for Buffalo Rock. Today we’re going to talk about AMS equipment. So thanks for being here, John.

John: Thank you.

Tom: Now with buying AMS equipment, what do you think about the quality, the warranty, and customer appreciation from the factory and factory reps of their five wide snack machines?

John: I really enjoy using the AMS. I think we started back about eight or nine years ago, and I pretty much exclusively use AMS. I toured their facility. I’ve watched from the metal coming in to the end product. I’ve met Roy Steeley, the owner of that company, all the people that work there.

John: But the biggest factor, the reason I use them, is they’re really dependable. We use very few parts on ’em over all the last ten years. And then the sales rep that I have, Tim Paul, is really knowledgeable on the equipment, and if I need him here today, he’ll come today, if he’s in the country. There are times he’ll be in Puerto Rico.

John: But generally we have a great relationship, they do a great job, and that’s one thing that I never got out of some of the other manufacturers.

Tom: Now you buy both the snack machines and the refrigerated machines, is that right?

John: That’s right.

Tom: AMS is the only manufacturer that makes a 35″ four wide, refrigerated vendor. Do you use a lot of those?

John: Well when we first started purchasing them, we bought only the refrigerated, and that’s because the refrigeration unit was, actually, the expense was only a few hundred dollars more, and we lease them back to ourselves, so that’s a big savings. And they also make a food … I don’t know if you knew that, but they make a food machine, a 35 and a 39, and that’s all I use on food as well. I use their AMS 39 and 35s.

Tom: What types of food do you dispense from the refrigerated food machines?

John: We do everything from the big sandwiches, to some of the platters, like wing platters. You can just about configure it any way you want. And, of course, that’s pretty much set through our corporate office, how they want the machines set. But we can pretty much sell anything through ’em. And we sell a lot of different things.

Tom: AMS is the only company that makes an ETL approved, high security, outdoor vendor. Do you use a lot of those?

John: We use them in the schools.

Tom: Okay. What configuration of snack machine do you buy from AMS? Single helix or dual helix? Regular fluorescent light or LED light? Gum-

John: Well, everything that’s coming to us now is the dual helix, and LED, and, of course, they’re all ADA approved. Actually the brand new machine that’s coming out this year, we just got a few in, and the appearance of the machine is just unbelievable compared to what it used to be. The numbers are lit up, everything looks great compared to what it used to look like.

John: To me, again, I couldn’t praise more about the durability and the dependability of these machines compared to what we used to deal with. Just a good product.

Tom: What do you think about the new epoch look on the machines now?

John: That’s what I was saying, the new look, to me, is just unbeliev … you know where it extrudes out and it just looks way better than the other ones. It’s a little bit more. Again, to me, as long as they work, that’s bet … you can have the best looking machine out there with all the bells and whistles, but if it doesn’t work, it’s not dependable and you’re going back to it, and you’re putting money in it as far as parts trying to make it work, then it’s no good unless it’s dependable. I think these things work great.

Tom: Do you use any of the healthy vend machines?

John: I don’t think we’ve gotten into that, I think there might be a few selections in there that they’ll code healthy vend, as far as whether it be a … I ain’t gonna say a chip because I can’t, I don’t think they are, but I know that the full line vending team does recognize, they’ll put something on there, I’ve seen it before, it says, “Healthy vend,” or something that’s on there. Is that what you’re talking about?

Tom: Yeah. Overall, which company, in your viewpoint, makes the best refrigerated vendor?

John: Again, to me, because I use AMS and I wouldn’t have stayed with them if I didn’t like it, but it’s not hard to change out the refrigeration unit if it’s bad. After a couple times, if you ever had to do it, pretty simple. So we stay with them, we really enjoy that machine. My guys’ll like it. Simple to use, that’s the biggest thing. Simple to work on.

John: One other plus about this machine, and again, I hadn’t … I’m not in touch with what the other ones do because I hadn’t given over the last ten years probably haven’t given them a whole lot of opportunity to come in here, because I get such good service out of the people from AMS, but the parts I use in an AMS 35 are the same parts that go in a AMS 39. Besides that shelf being wider, everything else is the same, so I don’t have to carry dual parts, and that’s a plus in itself.

Tom: That’s great. Now is there anything you’d like to tell us about Buffalo Rock?

John: We’ve been in business for a pretty good while, over a hundred years. I don’t know what, it was a hundred years a few years ago so I don’t know the dead on number. But I think it’s a great place to work for. I think we all is … because we have divisions all over Alabama and Georgia, and Mike Bunt is the CME, corporate marketing equipment, guy in Birmingham. We all work well together. And if we need things from each other, it’s just a phone call or an email away. We meet quarterly, and just a great place to work.

Tom: Alright, well, you’ve been listening toAMS Vending Machines Durable and Dependable  at the Vending Business Show, a publication of A&M Equipment Sales.  More Vending Business Blogs  USA TECHNOLOGIES ePORT G9

Vending Industry and Nutrition

Vending Industry and Nutrition U.S. Schools have been fighting obesity for six years now despite the financial hardship it has brought on and the vending industry has supported this cause – one example is NAMA’s Fit Pick program.

Vending Industry and Nutrition These wellness issues have been difficult for vending operators to deal with but necessary for long-term planning and changing consumer perception of vending.

The US Department of Agriculture is pressing for new rules for vending machines under the National School Lunch and Breakfast programs.  Vending operators would do well to lead the charge in consumer perceptions of vending, rather than following it.

It has been six years since U.S. schools began removing soda from vending machines. This was a controversial move. Some observers claimed it would create financial hardships for schools but would not change kids’ eating habits.

The removal of soda and other products has certainly created financial hardships for schools. Obesity rates among young people remain high. However, this past week, the journal, Pediatrics, reports that laws that curb the sales of “junk” food and sweetened drinks at school may play a role in slowing childhood obesity.

The vending and beverage industries have largely supported these efforts. They have done so in recognition of the seriousness of the obesity problem and in the interest of being good corporate citizens. The beverage industry has voluntarily removed soda from many schools. The vending industry, led by the National Automatic Merchandising Association (NAMA), has promoted wellness through its voluntary Fit Pick program.

Many vending operators have supported these efforts because they recognize they need to be health advocates. But from a profitability standpoint, it would be an understatement to say the wellness programs have been a challenge. At a time when the industry can least afford it, many school accounts have become less profitable.

While the wellness initiatives have been a tough pill to swallow, vending operators need to consider these efforts within the context of their long-term objectives. A key objective has been the need to change consumer perception of vending.

NAMA has invested heavily in a public awareness campaign to improve the vending industry’s image. The campaign has largely focused on promoting new vending technology. Research indicates consumers are viewing vending more favorably, particularly younger consumers. One reason is that the wellness activities are changing the traditional association of vending machines as purveyors of “junk” food.

Today’s younger generation does not see vending machines filled with soda at school. They see machines offering more water and other noncarbonated beverages. They see snack machines with more baked chips and whole grain snacks. These students are tomorrow’s consumers.

Read more exciting articles  Take Over A Vending Route Or Start Your Own?

Read the full story: Nutrition Rules Hurt Short Term, But Ultimately Help Improve Vending’s Public Image  

AMS Combo Food Machine

AMS Food and Bottle Machines
AMS Combo Food Machines  TIm Paul: This is an AMS  Combo  Food Machine. The AMS Combo Food Machines vends a full variety of food products, perishable goods. Also, a couple of shelves for beverages. You can use milk, you can use any type of beverage because the AMS Combo Food Machine also has a health and safety timer. That way, if for some reason your temperature should rise above an acceptable range, it puts the machine out of service. Or if the door is left open where it rises above an acceptable level, the machine goes out of service.

TIm Paul: Most importantly with an AMS Combo  Food Machines, each shelf is fully adjustable for a large variety of products. Should you wish to vend a large double chili dog, for instance, it could be turned sideways like this. You could make this a three-wide here in a four-wide cabinet. You could make a two-wide, you could make a five-wide in this four-wide cabinet, depending on the product size of food you are using.

TIm Paul: This AMS Combo Food Machines  of course, is the 35-inch machine, which you would think of as a four-wide. It also comes in a 39-inch machine, which you would think of as a five-wide.

TIm Paul: The refrigeration system is fully enclosed, you have a screen to protect your compressor against dirt. Also, this machine’s bottle shelves holds six deep. They are six across in this particular model. They are eight across in a 39-inch machine.

TIm Paul: Like all AMS vendors, this machine also has our patented sense-it system, which enables a product to fall through the sensing system and register a vend. Should you be vending a large sandwich or something that for whatever reason that gets hung up, this machine will make a couple of jogs to dislodge this so that your customer always gets his product.

TIm Paul: The warranty on an AMS Combo  Food Machines is three years on refrigeration and electronics and one year general warranty. Give AMS a try.  Thank you for watching the AMS Combo Food Machines at the Vending Business Show for more blogs go to  Servicing New Vending Accounts Part Two

Vending Efficiency Operating Procedures

Vending Efficiency Operating Procedures  An interview with Larry Towner, vending consultant

In this podcast, Larry discusses:  Vending Efficiency Operating Procedures

  • Storing product
  • Statistically you touch an item 5 times before it sells
  • Create a plan for loading your truck so that you get a smooth flow of products
  • Loading drinks vs. loading snacks
  • Keeping things neat and orderly makes you more money
  • Dealing with products going out of date in the warehouse
  • Use vertical space to your advantage
  • Eliminate confusion

\
EPISODE TRANSCRIPT:
Tom: I’m Tom Shivers with the Vending Business Show here with Larry Towner who is a vending business consultant. He’s been in the vending business for a long time so thanks for being here Larry.

Larry: Thanks Tom, appreciate it.

Tom: In the last show, past couple of shows, we’ve talked about some interesting topics like marketing at the machine level and product turn. Basically, at this point, in the process, the vending operators may be selling more product. I imagine Vending Efficiency Operating Procedures  is, becomes kinda important at this stage.

Larry: Yeah, it’s kinda time to start talking about Vending Efficiency Operating Procedures  because now that you’ve got everybody selling product at a strong level, a couple of different problems that come up, everybody thinks oh it’s great to sell a whole lot of product, that’s great I’ll be making all this money except there’s a couple of things people don’t realize when they get out to selling a lot of product that, kinda like where do you keep it? And how do you move it? And a few things like that and so one of the things that we’ll start with, and there’s a series of shows that’ll go on talking about operations and efficiency and things like that, but one of the things that or where we’ll start is basically in your warehouse operation. And Tom, where do you think most people start in the vending business if they have a start a vending company? Do you they start with the-

Tom: Probably in the garage.

Larry: Yeah, probably in the garage is right. Or maybe just out of the truck and they use Sam’s club or one of the other warehouse clubs as their warehouse and that’s actually a great way to start but eventually you’ll get to the size where you need to start storing up a little product and usually everybody tends to move to their garage.

Larry: A couple of things about your garage. First off is, if you are married or you have a significant other or whatever, they general don’t like their garage full of snack food and drinks and things like that so it can lead to some tense moments in the family life and one has to just be aware that that might happen. But when you set your warehouse up and it really doesn’t matter how big your warehouse is, but you wanna have your, kind of your mind on efficiency and how do you move product easily.

Larry: One thing that we’ve done through statistics and things like that is that we’ve found that when we take products and from the time we receive a product to the time a product goes into the customer’s hands, we have actually handled it five times. And that’s an awful lot of moving of product if you think about it. If you’re gonna do some significant volume, if you say move a 100,000 items a year, you’ll have touched those items 500,000 times a year because you’ll have touched them five times.

Larry: So if you can remove one of those steps out of there, that’s say 400,000 times that you touch everything instead of 500 and that will lead to more profitability down the road. When you go in to laying your warehouse out, and this can be as simple as your garage, or it can be as complex as a very large drive in warehouse where you’re gonna be loading multiple trucks at any given time, you kinda wanna have a plan as to how you load your truck and subsequently your combines with your truck. Which your truck then should combine with your machines so that everything has a very smooth flow to it and that keeps you from having handle things too many times.

Larry: So I always say first off, in the vending business we have two basic types of products. We have drink products and we have snack products and those two things. What’s the difference between those two, Tom?

Tom: One is liquid and the other one’s not.

Larry: That’s correct. And the difference is, tell me a little bit about the weight of each of those items.

Tom: Well the drink’s gonna weigh more than the snack.

Larry: Absolutely. And the drinks are much, much, probably 400 times heavier, I don’t know the exact number but it’s quite a bit so when we go to lay out a warehouse, we always try to set. For me anyway, I always try to set drinks where they’re essentially at truck level when I bring ’em in. I try to set my warehouses up where I can back the bumper of the truck up to ground level and we can move things into the truck without having to lift them up and you’ll understand that if you get into the vending business and you go to load a hundred cases of drinks every day and you have to load ’em up three feet into your truck every day versus just rolling ’em straight across the dock plate or something like that.

Larry: Now that’s tough to do when you’re in your garage but you can set up a ramp system and you can make a kind of removable thing where you can actually roll your drinks up on a hand truck, into your truck, from the ground. And these are little things, but at the end of a long day, when you go to load your truck or the beginning of a long day, just depending on how you set up your particular route, these little things make a big difference as to how tired you are and how much extra work you can actually do.

Larry: We always set our drinks on the ground. We generally try to put them on pallets because what my goal was is, that even in a garage type situation, I put it on a pallet, I invested the money in a pallet jack because if I took my drinks, I could actually take a whole pallet and pull it right over to the back of the truck and load from the pallet into the truck. It makes it much, much easier, must faster, and then you can roll the pallet back and put it back where it goes because keeping things neat and orderly is what’s gonna help you make extra money.

Larry: If you go into a UPS warehouse or something like that, you’ll find a huge automated system that keeps things tracked and itemized and inventoried and in the vending business, Tom, what’s one thing about vending products that you know that’s critical in a vending product, they all have something printed on them, what’s that that’s printed on every vending product?

Tom: The date. Or UPC code.

Larry: There’s an expiration date. Yes. And the basic problem with expiration dates is, is that when that expiration date arrives, you need to throw that product away or eat it either way but it’s no longer sellable as of the expiration date. And one of the things that always, always, always when I ran my businesses or I run my businesses I should say that absolutely infuriates me is to have product go out of date sitting in the warehouse and believe it or not, it happens in every company and it happens because people try to cut corners so you have to have a flow system where the old date product, the longest purchase to go gets put on the truck first and this is done by good organization, making sure you can see all of your product, don’t have any place where product can fall down behind other product or get hidden by other boxes and when you go and you purchase product, make sure you move the old inventory up and push the new inventory to the back. Sounds simple but you’d be amazed how much it doesn’t happen.

Larry: And one other thing when we go to lay out a warehouse and particularly in a garage type situation, you really wanna make sure you use vertical space. And when I say that invest in some shelving or build some shelving, either way, it doesn’t really matter but get some shelving. You can good, inexpensive shelving. Pallet racks work really well. They’re very, very inexpensive and you can stack your products up vertically. Drinks always go on the ground ’cause they’re heavy and you really don’t wanna be lifting drinks but your snack products can go all the way to the ceiling ’cause they just don’t weigh anything. A box of chips only weighs, I don’t know not even a pound and anybody can pick up a box of chips, including women.

Larry: So that’s just some little tips. The organization of it is, is that when you go from your warehouse into your truck, you wanna have a flow. You wanna have everything in the same place and we always organized our warehouse the same way we organized our trucks, which in turn, was dependent on how our planograms were set up in the machines, meaning, as we talked about in the last show when we were marketing at the machine level, we had certain things in certain places. We then took, we worked our way backward from the machine level to the truck. When you walked into one of our trucks on the shelves, it looked just like the machine. The top shelf stuff was on the top shelf. The middle shelf and so forth and so on down the shelf so when you walked up to that machine and you wrote down you needed six of this and six of that and six of this and six of that, you went into that truck and the truck was exactly the same way, where the top shelf had all those products and the middle shelf.

Larry: And then, at the end of the day, or the beginning of the day depending on when you load, you go into the warehouse, everything is in the same place there as well so you’re never confused because you put something in the wrong place. Does that make sense?

Tom: That’s great stuff, Larry. Thanks for sharing. Tell us a little about your consulting business.

Larry: Well, we do consulting. We give these kinds of tips and more out to the various people that are particularly start up companies or companies looking to the make step in vending that are looking to move up and do more in the vending business but startups are really who need the most help. We can be reached at servicegroupinternational@earthlink.net and just drop us an email and we’ll see if we can get together and possibly help you out.

Tom: You’ve been listening to Vending Efficiency operating Procedures at the Vending Business Show, a publication of A & M Equipment Sales.  More Videos to look at  FDA Requirements for Vending Machines: What You Need to Know

Vending Machine Product Turn


AN INTERVIEW WITH LARRY TOWNER, VENDING CONSULTANT.


Larry TownerLarry is a veteran vending operator who has had success in all areas of the vending business and in choosing a vending machine product. Listen to learn why  it’s important to have the proper selection of products in a vending machine:

  • Know the number of times a product turns in a year

  • Know the difference between large and small profits

  • Most vendors shoot to turn once every 2 months

  • You want inventory to turn as fast as possible

  • The key to profits is product selection

  • Rotate products thru a cycle (the steak flavored potato chip)

  • How to maximize product turn

  • The McDonald’s McRib sandwich

  • When users know what’s there all the time they tend to ignore the machine

  • What’s new this week?


EPISODE TRANSCRIPT:


A VENDING MACHINE PRODUCT TURN CONVERSATION

Tom Shivers: I’m Tom Shivers with the Vending Business Show, here with Larry Towner, who is a vending business consultant. He’s been in the vending business for many years, and not too long ago sold the majority share of his vending business. Thanks for being here, Larry.

Larry Towner: Thanks, Tom.

Tom Shivers: In the last show, we talked about marketing at the machine level, and you pointed out a lot of interesting things. For example, which products sell best, product placement, presentation, setting the machine up, and then … a lot of other things that come into play there as well. Even another one was making the machine look fresh.

Tom Shivers: Why is it important to have proper selection of products in a machine>

Larry Towner: Ah, the magic question, why do you want the right products in the machine? Well, the basis of machine level marketing, or planograms, or whatever you want to call them, planograms is actually the picture of how your machine looks and where everything is placed, gets into a couple of different things, but the biggest issue there is to essentially give the people what they want, which in turn is going to give you what we call product turn. Product turn is the number of times that you sell a given product in a week, month, year, day, whatever it happens to be, but generally, it’s referred to as the number of times that a product turns in a year, and most businesses look at turn as being critical. Turn can be the difference between making large profits and making small profits.

Larry Towner: The key to machine level marketing is to make sure that you put the right products in there so that you can get enough turn to justify having the product in there, and when we say turn, what we mean is that if you sell a product … Just for example, if you sell one product, and you sell six columns of it, say, six full columns or 12 selections each, whatever, however you want to look at it, let’s just say you sell six versus selling 12, if your margin is the same, of course, you’re going to make more money selling 12 versus selling six, and that’s what we consider to be turn.

Larry Towner: Most people consider turn to be how fast you turn your entire inventory, and most vendors shoot to turn their entire inventory in, I’d say a figure of about six times a year, or once every two months. If you look at your dating on your products and things, that’s really where those figures come from. The figures come from the fact that most of our products have about a two month date one them, roughly, if you look at potato chips. Pastries, of course, are a little shorter, and any fresh food you do, of course, would be much shorter.

Larry Towner: But that gets to be the critical issue, is that you want your inventory to turn because you make more money when the product turns, or sells, basically. If you can turn your entire machine … If you take, and you take a 40 select machine, and you turn the entire inventory over six times a year, if you can make it turn seven times a year, that’s like adding another two month cycle into your year, so that’s like having your year be 14 months instead of being 12 months, and that can be significant money. The key to product selection and marketing at the machine level are giving your customers what they want, when it’s all essentially the same thing, that’s where it becomes critical, because to get the extra profit out of it, it adds up to some very, very serious money.

Larry Towner: At one time, I did a little study. I said, “If I can get each of my machines to turn one column more per week, that I would average,” on average it was something like, “an extra $5,000 a week in income,” and that’s significant in a small business. It’s significant in a large business. If you can get one more turn, you get an extra $5,000. So that’s why turn is so critical.

Larry Towner: Kind of interesting, isn’t it, Tom?

Tom Shivers: It is, it’s fascinating. It’s like you’re optimizing the whole business around the products that are selling in the machines that you have, though it sounds like you really have to experiment, perhaps, to find out which products turn the fastest or the best.

Larry Towner: Yeah, you actually, you do, you know? You want to try new products. New products always sell well. They always tend to turn pretty well, but the question is, do they have longevity? What eventually you’ll learn is, you learn at each given account what really sells, and what kind of cycles you can rotate things through.

Larry Towner: We rotate our products, or we always rotated our products through kind of in a cycle, and when I say that, I mean, we would give a product … I don’t know if I have a hard example, but an optional chip, we call them optional chips. It might be, say, a steak-flavored potato chip, and we would run those about every three to four months, just for example. We would find that when we would put them in, they would get snapped up and purchased very, very quickly. What we would do is we would watch to … at a point where they started to slow down a little bit, then we would take them out, and we wouldn’t run them for another four months.

Larry Towner: The best example I can give you of that kind of thing is McDonald’s, and I say it because right now, as we sit here, I know that McDonald’s has their infamous McRib back out in the stores, but they don’t run the McRib all year long. They only run it every so often, and when they do, they tend to get pretty good sales out of it, and so that’s a different kind of example, but it’s the same example. We always try to do the same thing with some of our optional chips.

Larry Towner: You’ll find that some of your chips will sell all the time, and when you get those chips, you leave those in, and they sell consistently, day in and day out, but your other chips, candy bars, it doesn’t matter. It all has its cycle, and you can cycle it through, and that gives you maximum turns, and so that’s how you get maximum turns.

Larry Towner: If you go … I’ll give you another example. Tom, have you ever had vending in any of the businesses you’ve ever worked in through the years?

Tom Shivers: Sure.

Larry Towner: When you walked up to the machine, and it was the same stuff in there that you saw for the past two months, were you real excited about buying any of it?

Tom Shivers: No. I mean, you know what’s there, so you just kind of ignore it, I guess.

Larry Towner: Yeah, you kind of ignore it. See, that’s … When you get at machine level marketing, that’s what we always try to not have happen, because we realize that … The difference is, see, a vendor goes to the machines, let’s just say, he goes once a week, or even if he goes on a daily basis, as a vendor, if you go to the machines, and the machines look stale and boring, and when I say stale and boring, it’s like, “The same stuff, the same blah, blah, blah,” it’s time to change the machine. Just change how it looks. Move stuff around, maybe add some new product.

Larry Towner: That way, what happens is, is people go to the vending machine. My goal, anyway, was always to have people go to the vending machine and say, “Hey, what’s new here today?” Or, “What’s new this week?” Pretty much every single time … We did the majority of weekly accounts, so every time we went, every week we went, we would try to add something new and take something out, so that the machine always had something different in it that people could look at and try.

Larry Towner: I’ve been in and worked in too many places in the past where nothing ever changed, and you just kind of got to the point where you’re like, “Yeah, whatever.” And so, that’s what our goal is, is to maximize turns, is to keep rotating things around and changing things up.

Tom Shivers: Yeah, it makes a lot of sense. I mean, you definitely want it fresh, like you said, and kind of like you were talking about the McDonald’s McRib sandwich is kind of a scarcity play, because you never know when it’s going to be there and how long it’s going to be, and then when it’s gone, it’s gone for a while.

Larry Towner: For a while, right. But they do tend to cycle it and bring it back, so you know it’ll come back sometime, and they sell it and that, and we do kind of the same thing, because we have, essentially, 40 selections or so, 32 to 40 selections, most of our machines are 32 to 40 selections, and drink machines run anywhere from five to 10, but even with the drinks, we tended to rotate drinks around a little bit. We’d always add a couple of optional flavors in that were … and I say optional in that pretty much our planograms had Coke, Diet Coke, Mountain Dew, Dr. Pepper, Pepsi, and then usually another … we would have flavors and things like that, but we would rotate the flavors around too.

Larry Towner: We’d run orange for a while, then we’d run grape, and then we’d run … Warm months we’d run tea, and then we’d run non-carbonated stuff in the summer, maybe chocolate drinks like Yoo-hoo or something like that in the wintertime. That way, you always had something that’s fresh and new also, even in the drink machines, because while people want what they want, they also do like to try new things, so that’s kind of the concept of turn, and that’s the way that you, or it’s the way that I’ve found that maximizes turn really well.

Larry Towner: That’s why we do it, and we do it … If you take and run the numbers sometimes, you’ll see it can add up to significant in money.

Tom Shivers: Yeah. Well, thanks for sharing, Larry. Tell us about your consulting business.

Larry Towner: Well, what we do is we do consulting. We give you tips like this and a whole lot more, just depending on wherever you’re at with your vending business. We work mostly with startups, or people that have been in business and are looking to get bigger, and/or are struggling with their business, trying to figure out what are they doing, how are they doing it, and how can they become more efficient?

Larry Towner: Efficiency is something that’s absolutely critical in the vending business. It’s probably a topic we need to talk about for another show, but efficiency comes out to how you make the decisions on which product to buy, and how you actually operate your business, how do you walk into the business and do your job when you actually get accounts? How do you, right down to the nuts and bolts … If we can save you minutes, we could save you dollars, so that’s what we do. We do analysis and we can help you with sales and marketing. We can help you with all kinds of things, all aspects of the vending business.

Tom Shivers: All right. You’ve been listening to the Vending Business Show, a production of A&M Equipment Sales.

User Friendly Vending Machines

User Friendly Vending Machiones  Barry Wood: Hello, my name is Barry Wood. I’m part of the sales staff here at A&M Equipment.

Barry Wood: I want to show you a User Friendly Vending Machine  that we recommend to all people that are non-vendors for their own facility. It’s easy to program. This particular machine is painted on three sides. On the facings themselves, we put polycarbonate. It doesn’t scratch, it looks better longer. On the inside, you have a 40-selection machine here, along with five selections of gum and mints. Each machine is easy to load by virtue of drawers that come right out to your level, so you can put your products inside your helixes here.

Barry Wood:User Friendly Vending Machines   Programming itself, too, is also a snap just by pushing one button here and going to the front of your machine. On the inside, you have rebuilt Mars coin mix and validators. Mars is one of the most outstanding money-handling systems on the market. His little brother is a 32-select. Again, painted on three sides and on the inside, also, with polycarbonate on the facing. They program the same, they load the same. Again, your drawers pull out for easy loading. Mars coin mix and validators on the inside.

Barry Wood:  User Friendly Vending Machines  will give you years of great service. Thank you. For more information on different snack machines most of them User Friendly Vending Machines click on Snack Machines at the top of the page.  Thank you for watching User Friendly Vending Machines at the Vending Business Show.  For more blogs  New To The Vending Business?