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Issue Date: Vol. 51, No. 5, May 2011, Posted On: 6/1/2011


Transforming Bulk Vending, One Operator And One Location At A Time


Hank Schlesinger
swag@earthlink.net
bulk vending, vending machine business, vending, bulk vendor, bulk vender, bulk vending operator, gumball machine, coin-operated, coin machine, coin-op news, Vending Times, Hank Schlesinger, Henry Schlesinger

There are some operators in this bad economy who are doing just fine. And as the economy continues to sputter and fails to gain traction, this unheard group of operators has somehow managed to increase their machine revenues and locations. Of course, they may grumble that they're working twice as hard compared with a few years ago, but that is pretty much what success in any business requires.

After speaking with them, it becomes crystal clear that it isn't necessarily the hard work alone that results in success. It's mostly the consequence of transforming their businesses. For some of them, these changes are dramatic and easily recognizable; for others, changes are subtle. What these operators have done is successfully adapt to a changing environment. They are not waiting for things to return to "normal."

Unfortunately, there doesn't seem to be a surefire blueprint for success when it comes to these operators. As far as I can tell, each solution is geared specifically to the needs of their own routes and the markets they serve. They have rewritten their playbooks, and in some cases this kind of rethinking came as a necessity as they watched revenues shrinking and locations close. In other instances, successful operators saw opportunities in a changing retail market and developed business plans to take advantage of that change.

One operator recently told me that when a dozen or more of his locations were lost, he found himself forced to adopt an aggressive program of building density within his remaining locations. Rather than have machines sitting idle in his warehouse, he simply placed them in existing locations. This is not as easy as it sounds, he explained. This approach requires a major rethinking of what each location could profitably handle. It is also more complex than just rolling new equipment into locations. Racks must be reconfigured, machines reconditioned and store management sold on the idea. Some locations found themselves with one-third more or even double the number of bulk heads. This operator often didn't get it right the first time around. The process took about a year of carefully tracking sales to match the right number of heads to each location.

Another operator told me that he has redoubled his sales efforts. He's retooled his sales pitch to highlight the added income locations could see by using his bulk vending service. He provides charts (with graphical representation of bulk vending data) and photos of his existing locations to drive home the point. He also offers a bounty to his kids and their friends: $50 or a gumball-filled bulk vender for each location they spot in which he successfully places equipment. When word spread about the reward, the bounty program was working, and it even reached Facebook. What he initially expected would amount to a few dozen leads within biking distance around his community, quickly grew into dozens of viable leads within a 50-mile radius. In fact, some of leads were hundreds of miles from his office, and out of reach of his service area. So far, he's gifted hundreds of dollars and several vending machines.

There are more stories. They're about operators who have managed to adapt to a changing business environment with minimal investments. And in the process, they are transforming the industry. For those operators who have hunkered down and are waiting for things to return to "normal" -- it could be a long wait.


Topic: Editorial: Music and Games

Articles:
  • What Information Overload? Bring On The Big Data!
  • Why Is It Here, And Where Is Bulk Vending Headed?
  • Uncertainty In Bulk Vending's Brave New World
  • Luck Is No Longer A Variable For Bulk Operators
  • Churn, Baby, Churn. Declining Dynamism In Larger Economy

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