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Vending Business Information, Issue #069
December 20, 2015
Comparing The Vending Business To The Snack Box Business
The vending and snack box businesses are similar in many ways but they are also different in many ways. Today we will examine the two businesses.
Account SizeWhen you are looking at the size of the accounts the two businesses service there are big differences. A full line vendor (a company that uses machines to sell coffee, snacks, cold food, and soda) normally will not take an account that doesn’t have at least 50 employees that are in the location of the machines for 8 hours a day.
A snack box company will normally place a box in a business that may only have one person working there on a full time basis. One employee can eat enough product to make a nice account. To be fair a lot of snack box companies are looking for locations that have 3 or more full time employees or have a good walk in business.
Commission Versus HonestyIn the vending business most companies of any size will ask for a commission off the sales you receive from the sales at their location. Usually the larger they are the larger the percent they will ask for. It is not uncommon for a good vending account to receive between 10% to 25% of your gross sales.
I’m asked on a regular basis from people just starting out in the snack box business if they should offer a commission to their accounts. The answer I always give is no. A company in the snack box business will not get paid for every item that moves through the box so they consider that the items that are not paid for are like a commission the vendor is paying.
Frequency Of Service DaysA good vending account will need to be serviced at least once per week and that is if they don’t have a cold food machine. Most accounts will need to be serviced 2 times a week even if they are a smaller account. Larger accounts will get serviced once per day if you want to hold onto them.
A good snack box operator will normally see each of their accounts every 12 working days. This was the service cycle I used until I retired. If I had an account that needed service more often (which were few) I would try to put them on two routes or I would leave more than one box at their location.
Stale ProductNo matter how large or how small a vending account may be there will be stale items. In general the vending accounts want a good variety for their employees and with vending machines you have several slots to fill in each of your machines. Cold food is always the machine that you will get the most stale items out of. Most vendors will not put a cold food machine in an account unless they can figure on getting the snack, coffee and soda business. The reason for this is most cold food machines do not make money, they are normally no better than a break even proposition.
The snack box company will have stale items to contend with, also the items in a snack box that are normal items to go stale are chips and crackers. Most of the other items that are handled in a snack box have good long codes and by rotating the boxes from one account to another it helps to hold down on stale items. Snack box customers are normally not as hard to get along with as they know they are not a large source of income and it takes many more accounts to make a route.
Number Of Customers Needed To Make A RouteIf you are a vending company with only one employee (yourself) one sizeable account can make all the work you can handle. Many times an account with 700 or more employees will work weekends and you will be expected to take care of their employees on the weekend.
If you have 6 snack box routes and see your customers every 12th working day you will need 360 customers to make a route. One day you are running the route and the next day you are counting and refilling the boxes getting ready to take them back out the next business day. The weekends for a snack box operator are free from running a route.
I just had a run of boxes made. Prices have been creeping up and I’m going to be forced into raising my prices on the boxes. If you are thinking of purchasing more snack boxes in the near future I would suggest you go ahead and do it by December 20th.
Wishing you success!
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