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Small Vending Changes Make Cents

Paul Partyka |

FREEPORT, Ill. — Some things are just meant to go together — a hot dog and fries, for example. As a coin laundry owner, there’s probably a pretty good chance that you offer vending of some sort, and believe that it’s an ideal extra profit center.But like anything else, there’s always room for improvement. That goes for vending too. How much thought have you put into your vending program? Have you ever considered offering something other than food or drinks? What are the most popular vended items? Angela Olson, marketing manager for Seaga Mfg. Inc., a vending machine manufacturer, recently took the time to address some of these questions and share her thoughts about how laundry owners might increase vending revenue.FIRST THINGS FIRST“Vending is a great extra profit center for minimum floor space, depending on the type of machinery you buy,” Olson explains. “It’s a win-win situation.”Before you start changing things, she urges you to focus on the vending basics.“You need to do your research when it comes to vending. There are several publications out there that survey every year and collect data on what the popular vended items are.” Olson mentions the Vending Times and Automatic Merchandiser. The Vending Times does a census of the industry every fall that contains plenty of good information, she says. Automatic Merchandiser has a state-of-the-industry report that contains the previous year’s sales data for the most popular vended items.While this information should prove helpful, she realizes that every location is different. She urges operators to conduct customer vending surveys. Possible survey questions would include:• How many times a month do you visit the laundry?• Do you buy from the venders?• If you don’t, why not?• What would you like in the venders?If you know what’s on the mind of customers and observe what’s selling in your venders, you can use a little common sense.“If you have something that sells out regularly, put more of that in the vender. This isn’t that difficult, but it’s something you need to pay attention to and work with over time. Variety is nice, but a machine only has so much capacity.”Olson believes the most common operator mistake isn’t choosing what to vend, but knowing how to operate the machine. “People don’t bother to learn their machines. They don’t read the operator’s manual, don’t go online to find information and don’t call until things are bad. Learn how to operate the machine and make sure it’s running properly. The No. 1 thing we see is people not loading the machine properly and things getting stuck. If it’s not running properly, it won’t make money for you.” Keep the venders clean, she adds.If your machinery has the technical capability, it also helps to offer deals, such as buy one item and get one free after 6 p.m., she believes.Is it really necessary to promote the fact that you offer vending? “I think operators can benefit from advertising that snacks and cold drinks are available whether it’s in the form of door signage or an ad. Vending is a benefit to a location.”You can boost the bottom line by making sure your venders are totally visible and accessible to the customers. It may even help to have a table or two near the venders so people have a place to enjoy the snacks.WHAT’S HOT?Food and drinks are always popular, but other items are growing in popularity. “There are a lot of calls for DVDs, T-shirts, caps, souvenir-type items and, of course, laundry products. There are also over-the-counter medicines such as aspirin.” Before you start offering these products, Olson strongly suggests doing your homework.The vending industry is also in a big health initiative right now, she says. “The perception of vending machines, according to the National Automatic Merchandisers Association (NAMA), is that the products are not healthy or fresh. Most operators will tell you that they work hard to offer what’s in demand, even if it’s not the healthiest thing, and they rotate products for freshness.“Healthy products are coming on. Bottled water has surged in the past two years. Low-fat, low-calorie snacks are catching the eye. Sports drinks and energy drinks have surged as well. There are vitamin drinks. There’s no real front-runner other than Red Bull because there are just so many new products coming out.”Yet, she does admit that today’s most popular items are not necessarily the healthiest. “However, you can benefit from adding some healthy items and giving them a try.”There’s one other thing you should keep in mind when deciding what to offer: the competition.“Nearby fast food restaurants and convenience stores can be a factor. This is where a customer survey really helps. If the fast food restaurant is next door, your customers may want chips and drinks rather than purchasing a whole meal next door. Even things like vending carts with people selling hot dogs need to be taken into consideration.”EQUIPMENT OPTIONS“Statistically speaking, the life of a vender is 10 years. There are, of course, some older machines out there. A lot depends on the maintenance habits of the owner.”If you want to expand your offerings, some new equipment may be necessary. For example, older machines may not accommodate today’s larger bags of chips or taller candy bars. You might be able to update your current equipment, but that might not be a realistic possibility.Energy-efficient equipment is available, along with sophisticated technology, in addition to a wide variety of models, she says.What features should you consider? LED lighting is a great benefit, she says. This is available on Seaga’s premium machine and is designed to last for 50,000 hours. “This lighting has also been shown to boost sales. It catches your eye across the room.”Smart card technology is part of the vending industry. “With a smart card system, you can manage pricing, energy-saving features, etc. right from your PC. You can take the card to the vender and download all the settings.”When offering refrigerated products like milk and yogurt, health concerns are only natural. “We have health and safety features on the refrigerated machines so milk products and yogurt can be vended safely and with no worries.”Investigate different payment and leasing plans if you plan to buy a vender. It would be hard to give you accurate pricing information since there are so many venders available. However, a fully refrigerated vender, set for standard food sizes (sandwiches, etc.), might be in the $3,200 range.One last tip: If you’re looking to add a vender, check for rebates.CHANGING TIMESHas the $1 coin affected the vending industry? “We know that most laundries have coin-operated machines. We too have coin-op machines only. But we have not had a single call about when we’re going to come out and be able to take a $1 coin. I don’t think the popularity of the coin has created a demand yet. Some machines are giving back change in dollar coins. The payment system industry has deemed this appropriate, and it works well for them.“Our society is not leaning toward $1 coins yet. Debit cards or smart cards are more popular.”Olson is proud to see the education being stressed by the distributors and vending organizations — assistance with the healthy vending initiative, for one. “That’s a positive; it got the dialog about vending going.”Olson was also pleased to see concerned operators. “At the last Clean Show I had a flier that listed the most popular vended items in the country, along with the average price you would pay for them and the vend price operators from across the country were selling them for. I got nothing but praise for giving out this information.”Looking ahead, she offered this prediction: “I think we will become more like Europe is; using pin-and-chip-based payment. Cash is going to get less popular with the public, even on small purchases.” 

About the author

Paul Partyka

American Coin-Op

Paul Partyka was editor of American Coin-Op from 1997 through May 2011.

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