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  • Dealing with products going out of date in the warehouse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

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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 [email protected] 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

Easy Repairs to Vending Machine Validators and Changers

AN INTERVIEW WITH Dale Barebo


DALE Barebo

In this episode of the Vending Business Show, we interview Dale Barebo, a successful vending operator, and vending sales manager.

He shares Common vending machine repairs issues with validators and changers & The major brands of validators and changers available today


EPISODE TRANSCRIPT:


Tom Shivers: I’m Tom Shivers with the Vending Business Show, here with Dale Barebo, Sales Manager of Phoenix Vending Systems, and today we’re going to talk about vending machine repairs, validators, and changers. So, Dale, thanks for being here.

Dale Barebo: No problem, thank you for having me. Let’s Talk about vending machine repairs

Tom Shivers: What vending machine repairs are easy for vending operators to perform on as it relates to their vending machine validators and changers?

Dale Barebo: Well, I would say that any vending machine repairs is fairly simple. When they get out to a machine it’s just a matter of not panicking and not getting upset. To diagnose it correctly and see if it’s taking money. If it’s not taking money, check and make sure that it’s clean. Just generally a damp cloth to wipe out the bill path or wipe out the coin path. Then, number one thing I always recommend for people to do, is simply just power the machine down, count to 10, power it back up and try it again. It’s just like your computer at home. The hard drive is gonna crash. It’s gonna lock up. It’s gonna lose its memory. You power it down, you power it back up. It’s reset and it’s up and working. And that’s the number one thing I always tell people to look for.

Tom Shivers: Okay.

Dale Barebo: It’s pretty simple.

Tom Shivers: All right, well, that’s easy.

Dale Barebo: It is very easy, and it’s not rocket science to work on these machines. It’s just, like I say, if you don’t panic, use a little common sense. You look for the problem that exists and a lot of the times I’m gonna say 70% of the time it’s dirt related. 20% of the time it’s something simple that there’s a dollar bill stuck in the bill path, there’s a coin in the coin jam. And 10% of the time it’s a problem that you’re going to need outside help, in which case you just remove the validator, you remove the change, and you put a replacement in, and you send it in and we get it repaired and send it back to you.

Tom Shivers: Yeah. I imagine there’s a number of common do-it-yourself repairs that vending operators could handle or even … not just vending operators, but anybody who owns a machine.

Dale Barebo: Correct, and I always tell everybody, anything we do you can do. It just comes down to, there’s a knowledge base that you have to have, but beyond that, cleaning is the big thing, like we talked about. 70% of it is gonna be dirt related, and if they can manage on a semiannual basis or once a quarter, to just get in there and just, when they’re servicing the machine just take those corrective measures to clean the coin path, to clean the bill path, to dust it off a little bit. They’re going to save themselves so much time and so much money because it’s gonna reduce the breakdown, and dirt is the enemy. Coins are dirty, dollar bills are dirty, people’s hands are dirty. That path is off and it gets into those things.

Dale Barebo: And that’s the big general maintenance things that most folks can do. As far as taking it out of the machine and taking it back to a bench and tearing it apart, yeah, you can do that, but again it might get more complicated, and you may not have the replacement parts. But, we sell the parts if you need them. If you break something it’s no big deal. Everything is replaceable on those units. There’s nothing that isn’t manufactured that we don’t have replacement parts for.

Tom Shivers: Okay, good to know. Well, what major brands are available?

Dale Barebo: Well, the major brands that are out there, basically, are gonna be Coinco and Mars. Those are the two major brands. There’s some other brands, such as Conlux and JCM and CashCode and all those. And we certainly look at all of those and we can repair most of those, and if we don’t there’s other service centers that can. Pretty much the major brands, the major players are Coinco and Mars and Conlux, and those guys produce probably most of the validators and coin changers that are out there, and those are usable in all manufacturers of machines, from Automatic Products, Dixie Narco, Vendo, Royal Vendors, [AMF 00:04:25]. Every machine that’s out there are gonna use the same changers, the same validators. There’s just different connections that hook into ’em, and again, today’s market is mostly [MVB 00:04:15] on the new stuff. The older stuff we carry replacement parts. We can fix those. There’s different models that go in there, and the manufacturers have made similar models that cross over.

Tom Shivers: So, Coinco, Mars, and Conlux.

Dale Barebo: I would recommend those three, yes.

Tom Shivers: Okay. Well, anything else you can share with us?

Dale Barebo: Well, I always just tell folks if they need anything to give us a holler. We do customer education programs that come out to your facility and help you guys do things. We have some criteria for that but they can call us and we can certainly talk to ’em. We don’t mind talking to folks over the phone to try to talk them through problems that they might have and source them in the right direction to help them out. No charge for that. So, we try to help you out.

Tom Shivers: Okay, great. Super. So, y’all are Phoenix Vending Systems. How do people get in touch with you?

Dale Barebo: Well, they can get ahold of us at 1-888-858-8583, and we consider ourselves an obsolete equipment repair company, meaning we can fix anything that’s been produced probably since the mid ’50s up until today, and certainly we carry all replacement parts for those things. We offer a one-year warranty on everything we fix, and we do a fixed price program for you guys that will do a … you know what it costs you when you send it in. So, it’s pretty basic and pretty simple. We got different programs for different sized companies. All they have to do is give us a call and we can certainly talk to them over the phone about that.

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

Vending Machine Marketing At The Machine Level


An interview with Larry Towner, a vending consultant.


Larry is a veteran vending operator who has had success in all areas of the vending business. Listen in on how to max out end-user sales,

The efficient system Which products sell best?, Product placement, Presentation, Setting the machine up, Loading the truck handling requests, optional items, New products tend to sell rapidly Part science, part art, Make the machine look fresh as well as vending machine marketing


EPISODE TRANSCRIPT:


Tom Shivers: I’m Tom Shivers with the Vending Business Show here again with Larry Towner, who is a vending business consultant. He has been in the vending business for many years and sold the majority share of his vending business a few years ago. Thanks for being here, Larry.

Larry Towner: Thanks, Tom.

Tom Shivers: In the last show, we talked a little bit about what to do when you get a new account or your first account. And I’ve heard you mention going forward from there what you call marketing at the machine level and vending machine marketing. What does that mean?

Larry Towner: Well, vending machine marketing and marketing at the machine level, Tom, is basically if you consider a vending machine to be a mini store, more or less it’s a small convenience store that’s located in someone else’s business. So when we talk about marketing at the machine level, when you’re in the vending business, there’s two people that you market to. You market to the accounts, which is how you actually get the vending accounts, and then you also market to the end users in the account. And when we talk about an end user, we’re talking about the people that actually put the money in the machines and purchase product.

Larry Towner: When we talk about marketing at the machine level, that’s what we’re referring to, how you maximize your sales out to the people in the account. How do you get most sales and how to … And then we tie that in also with an efficient system to actually operationally run your company in a smooth and efficient way. And a lot of what we talk about when we talk about marketing at the machine level is first off, you need to get to know which products actually sell the best. And each product there’s … If you look at the industry standards, there’s a series of products that consistently outsell everything else.

Larry Towner: This information is available from the National Automatic Merchandising Association, and from the magazines like Automatic Merchandising and Vending Times. But in general, every year it seems like … Well, it actually seems like Coca Cola is the number one selling drink. Snickers is generally the number one selling candy bar. And in general things like honey bun is actually the number one selling pastries. These are consistent to statistics that occur year after year.

Larry Towner: So you need to read through some of those trade magazines and find out what actually sells nationwide or worldwide at a high level. That’s right where you start. The second thing is how you market at the machine levels. Now, when we were running our business, what we would do is we had a specific set of things that we would run in every machine because if you’ve got a 30 or 40 select machines, just depending on the size machines that you put in, there’s always lots of space for optional products, what we call the optional products. But we would always run a certain selection of products at the machine level, and some of those would include … Snickers, of course, has been the number one selling candy bar, so we would always run Snickers.

Larry Towner: We would run a M&M yellows also and honey buns and usually Cheetos, Frito’s, Doritos, barbecue chips, and plain chips. Those were generally the largest selling potato chips. Usually, we would run like a peanut butter cheese cracker, some kind of a multi-cracker, some kind of a cheese cracker, some kind of a sweet cookie, and usually peanuts as well if we had that kind of information available. And then usually we would run Cheez-Its as well. The rest of the machine became kind of optional.

Larry Towner: Now, when I talk about vending machine marketing & marketing at the machine level, one thing you need to do is you need to kind of understand that in a machine, much like in a store … Tom, when you go into the grocery store, what do you notice? Isn’t things kind of set up in a certain way?

Tom Shivers: Well, you got produce is on one side, and you got dairy up towards the back, and meat is in the back almost in every store. And then off to the other side there may be other items, and then in the middle there’s always something like frozen foods or something.

Larry Towner: Yeah. Does it always seem funny that all the stores basically lay themselves out all the same?

Tom Shivers: Yeah, it’s Kinda like a maze.

Larry Towner: It’s Kinda like a maze, yeah. Well, the idea there is that the grocery stores and the convenience stores and also the vending industry has spent millions of dollars in research to find out where you put things because you’ll find out that they sell the best in certain locations. And in the vending industry or basically it’s in all industries. Actually, people are drawn to the center of the aisles are the center of the machine in our case. And you tend to put your best sellers at eye level.

Larry Towner: So in vending machines, you want to take your best sellers and you basically want to put them in the center of the machine. And you want to try to get them at eye level, although that’s not possible because we work in a vertical arrangement, but best sellers in the center of the machine and work your way out from that way. This is a marketing technique. Another thing when you study marketing and actual selling, what you would call selling when you’re not there, which is what marketing actually is, is you have to be aware of presentation. And presentation includes things such as composition of the color or the package, how the package looks, and things like that.

Larry Towner: Generally, it’s not a good idea to put the same color packages right next to each other. So if you have two packages that happened to be red in color, you generally don’t want them sitting right next to each other because what happens is people look at it, they tend to get confused, and if they purchased the wrong product, then they tend to do things. In vending anyway, they’ll tend to hit the machine or get mad, and they might not buy from you.

Larry Towner: So you want to keep those kinds of things aware of what’s going on. When you’re looking at it, you want products that are in similar color packages to be separated from each other. Again, this is done at the machine level, and this is done usually the first time that you set … We call it setting the machine up. When we did our businesses, we set all of our machines up exactly the same way. We did that for a reason. We did that so that we actually set our machines up the same way. We set all our truck inventories just like they are in the machine, so when you’re working in your truck, as you do your pick list, when you go in and you actually pick out what you need and what items you need to restock, you just move just like you’re in front of the vending machine to pull all your product. If you do this at work very, very well.

Larry Towner: If you just go out and throw all the product in the truck, and you can’t find it, and you can’t this … The vending business is a business of minutes, so you want everything set up smoothly, well-organized so that you can find things. And that goes for in front of the machine. When I go to my machines now, and I still have a few out there, I don’t even have to think usually what’s in a slot. I know what’s in those slots because have been doing it for years. I know that in certain places there are certain products in all my machines, and so it just makes it that much faster. I also can track my sales a little better in my head. We don’t use a computerized system and never did to track our actual sales on at the column level, meaning how many times … How many Snickers are you selling in every machine, how many this, how many that? We use general statistics.

Larry Towner: We just found it to be a little more efficient. Although if you can mine that information can be very helpful, but it’s not necessary. So anyway, that’s marketing at a machine level. One of the other things, when you market at the machine level … Now, Tom, you, you’ve purchased vending products, is that correct?

Tom Shivers: Sure.

Larry Towner: If you had vending in your company, and let’s just say you wanted something special, would you want your vendor to supply that?

Tom Shivers: Oh, absolutely.

Larry Towner: Yeah, and that’s one of the things that we try to stress. Obviously, we’re in the business of trying to give people what they want. If you give them what they want, they generally will spend more money with you, and theoretically you should make more profit. So this is talking about requests. When we marketed a machine level, while we might put in many of the same products in each of the machines, we do allow for a certain number of optional type items. And optional means that it’s not part of your standard planning grant. It’s not so part of your standard arrangement. And optional items, for me, always came from customer requests. We would do a number of things.

Larry Towner: We had suggested in the last show when you put your first set of machines out that you actually hand the customer a request list with some of the items that you have and some of the items that might have or that they might want. And when you take those kinds of lists, we would post those, those lists up on the machines regularly throughout the year, usually once a quarter, maybe once every six months, just to see if anything’s changed or if anybody wants anything new. Oftentimes, people will tell you or make a request to you actually in person as you’re servicing the machine, but sometimes it’s just a nice memory jog or if they have a little note that they can write it down, hey I want Hershey’s with almonds or something like that.

Larry Towner: Whatever it is that they happen to have a hankering for at that particular time. And those particular items go into the optional columns or the slots that you don’t necessarily have your main line things because some things, they just sell well. They sell well all the time, and you want to keep those things. At the machine level, what we find is that when you put in something new, it tends to sell very rapidly quickly. So if you put a new product in that they haven’t seen for a while, you’ll get a tremendous spurt of sales initially. They’ll come out, and they’ll purchase that initial product, and they usually buy it out very rapidly because they liked something. It’s something different, but that doesn’t necessarily mean it’s going to have longterm sales. So you have to be kind of aware of what’s happening when you put things out there, particularly if the manufacturers introduce a new product, say a new potato chip or new … whatever, a new flavor.

Larry Towner: You put it in, and you’re probably going to get a rush of sales on it initially. But then, it will slow down. So you have to be careful because you can get stuck with a lot out of date inventory. But with that said, that’s what marketing at the machine level is. I’m going to say it’s part science, it’s part art, some of it is we would change things at the machine level fairly often because it gives the appearance of it being new, and that spurs your sales. Sometimes we would also take things, and we just changed the arrangement in the machine every so often just to make it look new.

Larry Towner: And that’s another little tip to do what we call machine level marketing, where if you’re used to running Cheetos on the right side of the machine, move them over to the left side of the machine, that kind of thing. It makes the machine look fresh. It also gives you the ability to let the people know that the product actually is fresh because freshness in the vending business is critical. Don’t run out of date product. If you do, you’re going to end up not being in the vending business for very long.

Larry Towner: What comes to mind for you, Tom? Do you have any questions as far as the marketing at the machine level? I can go on for a really long time on this. There’s all kinds of little tricks, but these are some of the highlights that we’ve used through the years.

Tom Shivers: Yeah, I liked the … It sounds like you found that there are certain things that bring high efficiency to the vending business, and these are the kind of things that attack … What’d you call marketing at the machine level, getting the end user … maximizing end user sales basically.

Larry Towner: Correct.

Tom Shivers: So that’s fascinating actually, and it’s interesting that you can utilize basic statistics overall rather than collecting statistics from each machine.

Larry Towner: Yeah. Well, the industry publishes some beautiful statistical stuff. Now, that doesn’t necessarily mean that your particular company is gonna abide by those statistics. And I use one great example that the people at the bottling companies love to hear me use, at least one bottling company they love to hear me use it. In my company we had the number one selling drink in the wintertime was Coca Cola, and we track it per season just because. But we would see Coca Cola would outsell all the other soft drinks in the winter. But in the summertime, in my accounts, we had kind of a specific demographic that we hit. Mountain Dew would overtake and surpass Coke in the summertime. And overall we sold more Mountain Dew than we did Coca Cola in a year by the time we added it all up.

Larry Towner: Now, that highly counter to what the national statistics are. National statistics will say that Coca Cola should outsell everything else about two to one. And in many of our accounts that would be the case, but we had a lot of accounts with a lot of young guys. And we’re here in the South, so it’s very hot for most of the year, and they would drink Mountain Dew instead of coffee. For my company, that’s what we found out. But that doesn’t mean that we still … It means we wouldn’t not run coke. It just means that we were aware that Mountain Dew might outsell coke in the summertimes, in the hot months. And that’s local information, but you take those national things, they’re a place to start. And particularly if you’re new in the business, look at what everybody else is doing.

Larry Towner: I forget how many vendors are in the country, something like 10 or 12,000 full time professional vendors, and those are bigger companies. Everything they do can’t be wrong because they’re in business, and they’re sustaining their businesses. And so you have to learn from what they do so that you can be successful yourself.

Tom Shivers: Yes.

Larry Towner: Learn from somebody that’s been doing it for a while, and then make your changes or your particular changes later on after you get used to what you’re doing.

Tom Shivers: Yeah. It sounds like some great … just good entrepreneurial tips. Learn from the successful person to be able to do the same thing, right?

Larry Towner: Basically. There’s very little innovation in business overall. There are always the Steve Jobs and things like that, but they comprise a tiny percentage of the market when you look at all of the business that’s out there in the world. And your best ability is to identify when the market is soft and take advantage of the market versus trying to create a market, as it were. That’s basic entrepreneurial advice I learned a long time ago.

Tom Shivers: All right, Larry. Well thanks for sharing. Tell us a little about your consulting business.

Larry Towner: Well, what we do with our consulting business is much of what we’ve just described things here. What we do is we help people become super efficient in their businesses so that they can be successful. We can teach all aspects of the vending business and other businesses as well. Actually, we were talking a bit about sales here last night, and some people have since contacted me and wanted to know more about just how to sell, and do we do any sales training? So we can teach you how to sell business to business, mostly.

Larry Towner: Now, personal sales or a different issue, but in a business-to-business sales, we can teach you how to do that, can teach you how to run your operation efficiently, can come in and do … After you’ve already been in business for a while, come in and do a market analysis a take a look at how you’re running your operation. Are there things you can do to improve? Our goal basically is to help you become more profitable, and we can make you become more profitable. We don’t really want you as a customer, not in a negative way, but our goal is to make you more profitable. That’s how we get paid. We can be reached at servicegroupinternationalatearthlink.net. And that’s the best way to get ahold of us, and we’ll go from there.

Tom Shivers: All right, great. And you’ve been listening to the Vending Business Show, a publication of A&M Equipment Sales.

Vending Accounts – Post Sale

AN INTERVIEW WITH LARRY TOWNER, VENDING CONSULTANT.


An interview with Larry Towner, vending consultant.

Larry is a veteran vending operator who has had success in all areas of the vending business. Listen in as he answers another good question.

“Ok, so somebody says yes, I want your vending machines in my office, then what do I do?”

With vending accounts This can make or break a lot of vending companies.

B2B sales involves an agreement, be careful what you agree to do.

A good rule of thumb is to under promise and over deliver.

Give yourself enough time to arrange the move.

Have everything ready to go ahead of time.


EPISODE TRANSCRIPT:


A VENDING ACCOUNTS CONVERSATION

Tom: All right. Well, do we have time for another question here?

Larry: Sure we do.

Tom: Okay. Well, yeah. Let’s see, somebody says, “Yes,” and they want … They’re saying, “Okay. I’m ready to get started with your machines.” Then what do you do?

Larry: Yeah. This is a great question because this can make or break a lot of companies. If you go out and you have to be real careful in your presentation as to what exactly you’re agreeing to, I guess I want to say.

Larry: This is a business to business sale in general. It’s a business to business sale. You’re going to be placing your business inside of somebody else’s business. That can get a little … I don’t want to say touchy, but people want the right things put into their business. They have a preconceived notion of exactly what’s going to happen and how things are going to go. You have to be very careful with what you say when you actually do the sales presentation and what you’re agreeing to in your vending account.

Larry: As somebody says, “Yes,” so here’s the thing. This is one of my rules. I was taught this in selling many, many, many years go. That’s under promise and over deliver. That’s one of the first things.

Larry: So whenever I’m talking to a customer and the customer says to me a question like, “Hey, that sounds great. We’d love to get started right away. When can you move the machines in?” I always counter back and say … I usually ask questions with a question. It’s an old sales technique. But I say, “When do you want them?” And they say, “Well …” That’s the first question. That’s the first question. It’s like when do want them because if they have somebody in there, they’ve got to make arrangements to get them out of there and things like that. All of this takes a little bit of time.

Larry: The second thing is, “Do you have your equipment ready? Is it ready to go?” If it’s not ready to go, how much time is it going to take you to get your equipment ready to go and your inventory and all the things that you need?

Larry: As you know, these vending machines don’t fill themselves and walk into the vending account. You have to have a means to move them. If you don’t happen to have the equipment that it takes to move vending machines, you’re going to have contact one of your local suppliers who will probably have several choices of machine movers for you to contact so that he can move equipment into the account because it’s not easy. Soda machines weigh 600 pounds and getting one through a door can be a very interesting experience. I’ve done it many, many, many, many times. I did move most of my own equipment.

Larry: One of the first things is give yourself enough time to get done what you need to get done. That is arrange for the move. Make sure if you’re trying to schedule somebody else’s move time, be really, really careful of when they can get in. We always told people because we never moved machines in the rain. We say, “We can do it at such and such a date provided it doesn’t rain.” We always gave ourselves an out because if we did have inclement weather, rain or snow actually, too. But anytime that you’re moving big piece of equipment, you got a safety factor you have to worry about. Anyway, that’s just a little bit of an aside. But I always gave myself enough time.

Larry: Then what I would do is I would go in and say … I would have the equipment ready to go and hopefully I would have it ready to go much … Probably a week before they actually needed it. At that time I would call the customer and I would just say, “Hi, Mr. So-and-So. This is Larry from, my company’s name.” And I’d say, “We’ve got your equipment ready. When you’re ready for us, we’ll be there.”

Larry: Sometimes what you’ll find is you say, “The guy came in yesterday and picked up the equipment.” So he is now without vending and your equipment’s ready. You go and you move it in. Now you bring your equipment in a week before you were supposed to and because the customer actually has the need for it at that time, you’re already starting off a long way towards getting very positive referrals because you delivered before you said you would.

Larry: If you think about that, Tom, when you do business with somebody you like to get a little more out … If you make a deal and you’re satisfied with the deal, but they bring you a little more, doesn’t that mean something to you?

Tom: Yeah. I had the expectation of getting what they said, but then they gave me something additional? That’s always cool. You got to love that.

Larry: Yeah and what that does is, is that builds the confidence in you as a businessman from your company standpoint into their company. He says, “This guy’s all right.” Even if you start off on that foot. Now, you come in a week late, then what happens?

Tom: That is like, “Uh-oh.” I’ve lost my time. I’ve got to reschedule things. Stuff like that.

Larry: Exactly. Exactly. That’s where when somebody says, “Yes,” it’s critical that you absolutely make sure that you’re i’s are crossed and t’s are dotted. I mean, your t’s are crossed and your i’s are dotted. I went backwards there.

Larry: But just you want to make sure that you can deliver at least on time. Now, in a worst-case scenario, say, who knows? Something happens and you can’t get the equipment. You’ve planned for the equipment to be there two weeks from today. In your mind you say, “No problem. I’ll have it there for a week from today,” but something goes wrong. You don’t get it there until that week. At least you’re still on time.

Larry: That’s why you want to as we say, promise, extend out how long you can do it, but deliver it early. Promise … Make your promises small, but deliver big as it were. If you do that, you’re on the right foot.

Larry: One of the other good tricks in the vending business is to at the time that somebody says, “Yes,” you say, “Hey,” and you make up a form. It’s really just a real simple form. You take your inventory list or what you think you’re going to sell there. Just make up a list and say, “Hey, can you pass this around? We want to make sure that people get what they want.” You put your product list on there. Your Lay’s potato chips and Hershey’s candy, Snicker’s candy bars and M&M yellows and things like that. You write all that down. They just make check marks by it. “Yeah, we want this. Yeah, we want this. Yeah, we want this.” That’s a really good tip. That starts you out on the right foot. These are all marketing concepts, by the way. This is marketing. This is not sales. This is actually vending machine marketing.

Tom: There at the bottom, do you put a little blank line for add your own or something?

Larry: Absolutely. You are always open to take suggestions. Doesn’t mean they’re going to get it. But you’re always open to take suggestions because they might have one item there that you’ve never thought of that you buy and you find out it sells really well there. You take it off to another location. You find out it sells there. All of a sudden you’ve got a sleeper unit that generates you extra sales that you might not have known about. We’ll get into some of that. That’s a lot more of what I call machine marketing.

Larry: Marketing at the machine level because you can market at the machine level meaning your product selections and things like that is a different type of marketing. That’s how you generate the most profits out of your machine.

Larry: Just from the general account sales standpoint, you put that stuff out and it helps to build your credibility. It also gives them what they want. Giving people what they want is how you make sales. You don’t walk in and dictate to them because they’re going to say, “Right. See yeah.”

Tom: Yeah. Good stuff thanks for sharing, Larry. Tell us a little about your consulting business.

Larry: Well, like I say, some of the tips and tricks that you’re seeing here are a lot of what we offer in our consulting business. We specialize in making vending companies very efficient from a sales and marketing standpoint and how to generate maximum profits both operationally and via the various different marketing means. That’s what we do.

Larry: We are available at [email protected]. If you have any questions and we are working on a website that will be up pretty soon. At least we hope.

Tom: All right. And you’ve been listening to the Vending Business Show. A publication of A&M Equipment Sales.

Vending Business Sales Methods

Vending Business Sales Methods  An interview with Larry Towner, vending consultant.

Vending Business sales Methods  Larry is a veteran vending operator who has had great success in all areas of the business.

Listen in as he answers a question from someone just getting started in the vending business:

“I am starting my snack/soda combo vending business. I have machines with 19 snack and 5 can drink selections. I must have faxed 500 businesses so far in the Arizona area and I can’t get one location. I need someone to help me find businesses in my area that need vending machines that I can service for free for them.”

  • Using only one method of marketing is not a good idea.
  • Larry describes his method of marketing.

EPISODE TRANSCRIPTS:

 

Vending Business sales Methods  Tom Shivers: I’m Tom Shivers with the Vending Business Show here with Larry Towner who has been in the vending business for a number of years and has even sold the majority share of his vending business a few years ago. He’s a consultant now and thanks for being here, Larry.

Larry Towner: Thanks, Tom. It’s a pleasure.

Tom Shivers: Yeah. Well, I wanted to kind of review what we went over last time real briefly. We were talking about getting new accounts or Vending Machine Sales Methods  . You mentioned a couple of good tips there, like a plan to land new accounts first of all. Then we talked a little about referrals and you said, “Hey, you need to know the key people in your accounts, those middle managers.” Then you went on and talked a little bit about focusing in on a specific area of geographic area for your operations and how that can influence friendly competitors and sharing leads with them. Thanks for that … for those tips. I also came across a really interesting question from a fellow who’s kind of struggling at a follow-up, how do you get new accounts question. Let me tell you what he’s asking here. He says, “I’m starting my snack soda combo vending business. I have machines with 19 snack and five can drink selections. I must’ve faxed 500 businesses so far in the Arizona area and I can’t get one location. I need someone to help me find businesses in my area that need vending machines that I can service for free for them.” He’s kind of … You see what he’s asking for there, Larry?

Larry Towner: I have an idea of what he’s asking for. Yes, I do. It sounds like this is … We had mentioned in a previous show just a little bit about not purchasing equipment until you have accounts. This is kind of an example, it sounds like to me, of a guy who’s gone out and bought a bunch of equipment, hasn’t really done any market research before buying the equipment and now has a whole bunch of machines sitting in his garage that he can’t get out onto location.

Larry Towner: One of the first things I noticed just in this question is that he talks about really only one way of generating business and that is he’s often faxing things. Now, Tom, I wanted to ask you a question. You run a business and I assume you have a fax machine, ’cause most of us do-

Tom Shivers: Sure.

Larry Towner: What do you do with those unsolicited faxes that come into you?

Tom Shivers: Well, I immediately grab them up, read them, and call the number on the fax.

Larry Towner: Is that on the way to the garbage can or after? Right. What I hear when I see this is I see somebody that it kinda sounds like this fellow’s been off to one of these ball … we call them ballroom or blue sky promotions where he’s gone in and they’ve told him, “All you have to do is fax off these things and they’ll be beating a path to your door. If you send 500 out, you’ll be guaranteed to get some results.” Well, the … While the faxing of things does work, it’s not probably really the most effective method for selling and or marketing. It is a one-sided thing.

Larry Towner: First off, actually generally costs businesses money. When you cost someone money, they really aren’t too responsive to your offer. It’s kind of like in today’s world, faxing really … blind faxing is almost unheard of. I would never blind fax myself. I might do blind emails where I’m sending it off, but emails don’t cost anybody any money. If they have interest in it, they might respond to it.

Larry Towner: Eventually if he sent enough faxes, he would get a response. I don’t know that the numbers would be, but 500 is really, really not that many to send out. I know when they used to do direct mail, if you mailed something to somebody, you were gonna look at a one to two percent response if everything was right. That means, if the offer that you had was perfect to the market and it was a perfect statement and everything was written and it was on the right paper and it was this and it was that.

Larry Towner: There’s hundreds and hundreds of items that go into doing direct marketing like that. If everything was right, you’d get a one to two percent. Which means, on 500 responses, if you got two percent you would get one. That’s really all you’re looking for at that. On faxing, it’s gonna be even less than one percent. Tom, you do a lot with internet. If you send out 50 thousand emails on internet, what kinda response rate do you get?

Tom Shivers: Well, if I’ve taken the time to really understand my audience on that list and try to answer the questions I know that they’re asking, then I might get a 20% open rate. That’s an optimistic number, actually, on email open rate. An open rate is just that, it’s just an open rate. It’s not a conversion rate-

Larry Towner: Right.

Tom Shivers: Which is much more effective. If you’re getting … Say you get 20% open rate, then you might get a five percent click rate off of those that open-

Larry Towner: At of that, if you’re soliciting, you’d be lucky to get one. Would that be right?

Tom Shivers: Yeah.

Larry Towner: You’d be really lucky to get one customer out of that. That’s the kind of things that we … that when we talk about that, a lot of it’s just statistics. When we study sales and marketing, sales is strictly a numbers game. If you’re gonna do sales, it is completely you just have to hit more doors. Now, the … As they say, one of the things in the sales game is is that what’s the easiest thing to get rid of? It’s a piece of mail or a fax or an email. That’s the easiest thing to get rid of. Those go right in the trash. The second easiest thing to get rid of is a phone call. You say, “Goodbye,” and you hang up and that gets rid of it.

Larry Towner: Getting rid of bodies, we’ve found, has been a little bit more difficult, meaning it’s been said that trying to get rid of a body is rather difficult. When you’re standing face-to-face with somebody, you tend to get a little better response than you do if you don’t. When we go about doing sales and marketing, you really have to go out and you actually have to knock doors. You have to go and you have to go talk to people.

Larry Towner: Some of my tricks on doing that are that you just ask everybody you know, “Hey, do you have vending machines?” It’s really that simple. Almost everybody has a vending machine where they work. “Well, are you happy with who you have now? Is there anything that could be made better?” You target in on those things and you ask anybody. It really doesn’t matter. I always just ask people that I meet walking into the business. “Hey, do you have vending machines?” “Yes, we do.” “Are you happy with it?” “No, the guy never puts in what we want,” or, “The damn things never work,” or whatever, any number of answers.

Larry Towner: Every once in a while you get, “No, we’re really happy with them. They do a really good job.” and blah, blah, blah. Then, what you’re doing is a bit of marketing research, really. You’re finding out who your competitors are and what they do and how they do it and do they do it well. When you go in with that kind of information, and you can pick that information up from anybody that you talk to that works at a business or is related to that business at all. It can be the janitor can give you that information. They’ll tell you the people that use the vending machines, if they’re dissatisfied with their service provider or their company that comes in and does their vending. You’ll find out about it pretty rapidly. You’ll also find out if they do a good job pretty rapidly. They’ll usually, even if they do a good job, they’ll still listen to you for a little bit unless it’s the owner’s brother in law or something like that and then pretty much you’re out the door.

Larry Towner: You’ve gotta go out face-to-face. You can do all the faxing and all the emails you want, but if you’re not out knocking the door, too, every day, you’re really not gonna win. That’s not a lot of fun and you’re gonna face a lot of rejection. We always say my conversion rates when I go out and do sales calls is about one in ten. I know that when Larry Towner goes out and he knocks 10 doors, he usually gets one account. That’s something, now, I’m a little more experienced than most people so an average person, if you go knock 20 doors, the chances are you’re gonna get an opportunity to get one account. These statistics just come from years and years and years of selling. An inexperienced person is gonna have a conversion rate of about one in twenty.

Larry Towner: Now, does that mean that you go out, you knock that … here you go. You knock on the first door. You get to 19 and you say, “Wow. I’m gonna knock this next one. It’s gonna happen.” No. It never happens that way. What happens is is you’ll go out and you’ll make 50 sales calls and your last three you’ll get the accounts. It always seems to be that way, or the last … or, it’ll work conversely the opposite way. You’ll go knock the first door, you’ll get an account, or the second door, one of your very first ones. Then you won’t get two until the very end. You have to stay at it.

Larry Towner: This is amortized. This is looked at over big periods of time. If you make 100 sales calls in a week, you’re pretty much gonna get about 10 accounts. When I say that, that’s of all sizes. It’s not being specific. If you’re going after big accounts, it can take you years to get big accounts, years and years and years it can take you. You have to be after them every three months or so, and that’s when you get into real professional selling if you’re going after a thousand person plan or something like that. You’re gonna have to be extremely professional. I’m just talking about the average business out there, with anywhere to 50 … 20 to 100 employees. You pretty much can knock the doors and they’ll at least give you an opportunity to make a vending account.

Tom Shivers: Okay. No. This fellow obviously is just getting started in the-

Larry Towner: Right.

Tom Shivers: Vending business and you definitely addressed a lot of the questions that he is freaking about right now. In a previous show, and it was how to get started in the vending business. It’s a previous show that we did. I would have him go check that out and anyone else who wants to understand more about the concept of sell before you buy, which you went into real well there. You’ve been listening to Vending Business  Sales Methods  at the Vending Business Show, a publication of A&M Equipment Sales.For more sales blogs  Vending Sales Secrets

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