Canadian Vending

Features Consumer Behaviour Trends
CAMA connection: Positive and Profitable

Positive and Profitable


March 31, 2008
By Ed Duggan operations manager Imperial Vending Services Inc.

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As we enter a new year we find ourselves on the incline yet again rising to face more and more challenges. The hardworking vending operator discovers the already-too-thin margins must survive the continued assault of increased product costs, increased labour cost to sales and gross profit ratios, and a marketplace perception that, at times, is characterized by a reluctance to accept price increases for products sold in our machines because “I know you are making a ton of money.”

As we enter a new year we find ourselves on the incline yet again rising to face more and more challenges. The hardworking vending operator discovers the already-too-thin margins must survive the continued assault of increased product costs, increased labour cost to sales and gross profit ratios, and a marketplace perception that, at times, is characterized by a reluctance to accept price increases for products sold in our machines because “I know you are making a ton of money.” 

Oh don’t be discouraged … we’re used to it by now. But, there may be some salvation, and yes, it does depend on us.

First, product cost increases are a reality and impact the bottom line directly. A good way to mitigate the negative impact is to continue to educate your suppliers to the challenges you face. Get creative with them to see how their knowledge can benefit your business. Their world is competitive with respect to product costs but maybe they can enhance your business in other ways. Every supplier endorses your goal to be successful and is aware of the price sensitive nature of our industry. Be loyal to your suppliers but let them know if they are in danger of losing a customer.

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Motivating your employees to perform better in these times requires, what seems like, on some days, all your creative genius to ensure your customer’s needs are being met. And it is all pretty simple, isn’t it. Giving the customer the quality products they want, when they want it, from clean, reliable, well maintained machines managed by a professional Route Driver with the proper skill-set to deal with the customers on the front line is simple. As with almost any position for which you are hiring, it is easy if you select the right individuals. From there you need to empower them to manage all the points of sale on the route as though they were their own. Proper training and motivation is paramount as the importance of the Route Driver in ensuring every experience your customer has with your machines is an enjoyable one cannot be underestimated. Good Route Drivers are cognizant of their impact on the vending service you provide. Good vending operators understand the challenges of the role and provide all the tools and assistance they can to help the Route Drivers be as successful as possible.

Lastly, meet the challenge that you are getting rich fast from your vending machines head-on. Educate your customers about the product costs and taxes so that they have a better understanding of the service you are providing. Develop a relationship with them and, when appropriate, give them insight about some of the challenges you face.

As a lowly vending operator in a world where everyone “knows you are making a ton of money,” and you are facing shrinking margins, focus on what you know is important: ensure every transaction is positive for the customer and profitable for you.o


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