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Issue Date: Vol. 41, No. 10 / August 25, 2001 - September 24, 2001, Posted On: 8/25/2001


Branding And Stong Customer Service Enable Allstar Distributing To Increase Marketing Appeal Of Flat And Bulk Vending Sectors


Nick Montano
Nick@vendingtimes.net

MONTREAL - Myrna Dorfman's popcorn business had just about reached its saturation point when she decided it was time to try something new.

Dorfman owned La Maison du Mais Souffle, an exclusive distributorship for a small popcorn machine and its packaged popping corn in Quebec and the Maritime provinces. She ran the business from her home, sold the concept to bars and restaurants , never taking "no" for an answer , and advanced the business as far as it would go.

At about the same time that the Canadian businesswoman discovered she couldn't sell any more popcorn machines, she learned about sports card vending machines. "I heard baseball card venders were all the rage," she recalled, "and I concluded it was time for another challenge."

Dorfman found a company in Brooklyn, NY, that made trading card venders, ordered machines and set up a distributorship. It was 1989, and Allstar Distributing was born.

Today, Allstar is one of the bulk vending industry's best-known manufacturers of capsule beanie and spiral gumball machines, and its sticker machines are renowned worldwide. More recently, the company, based here, has rapidly been gaining market share in the highly competitive flat vending merchandise arena.

"When I decided to try selling baseball card machines," Dorfman said, "I gave myself a time period. I opened up a small office and ran advertising in every single newspaper, both English and French.

"At first, after running the ads, I got very few calls and didn't sell one machine. I was beginning to get discouraged, but gave myself a few more weeks. And then, all of sudden," she remembered, "one day I sold a total of 50 machines to three people. There was no stopping me after that. I was on a roll, and it all happened in just three weeks."

Dorfman's marketing efforts were limited to the province of Quebec, where bilingual advertising is prerequisite to success. Her ads underscored "cash business," drawing a lot of attention from entrepreneurs looking for new business opportunities with little investment.

During its early stages, Allstar only sold trading card vending equipment, and referred its customers to wholesalers for product. "At this point," she told V/T, "I knew nothing about sticker vending machines."

FIRST CONTACT

Allstar's business strategy soon changed, however, after the company's trading card machine supplier, the now defunct Steiner Manufacturing, invited Dorfman to its Brooklyn, NY facility. At the time, Steiner built the "Sports Card Center," available in two-, three- and four-column configurations, sold by Allstar, along with stamp and sticker vending machines.

"That's when I first saw sticker machines," she said, "and I became really excited because I saw a vehicle that could be used to sell machine content. It represented a new and potentially bigger profit opportunity: repeat sales of stickers."

In addition to the sports card venders, Allstar began selling and servicing Steiner's sticker venders, becoming the Brooklyn manufacturer's biggest customer. The Canadian distributor broadened its product line in early 1990s with a spiral gumball machine from Lock America Inc. "I thought the gumball vender could be an allied product to the Steiner sticker machines," Dorfman explained, "and I would be able to sell them to sticker machine operators."

She was correct. Allstar was ordering 25 to 50 of the LAI machines at time. And as the company's reputation as a competent equipment distribution outlet began to spread, an increasing number of U.S. machine manufacturers were interested in establishing partnerships.

Allstar became Steiner's biggest customer within its first six months, and LAI gumball machine sales were strong. The Canadian company later represented sticker machines from Peninsula Vending, and The Amusement Factory's "Hot Shop" sticker vender, too. But profit margins on machine sales were moderate, and when its suppliers began raising prices, Dorfman determined that it was necessary for Allstar to begin manufacturing its own venders. These consist of three lines: spiral gumball, sticker and beanie capsule.

Allstar manufactured its first machine, a 4-ft. 10-in. spiral gumball vender, in 1993. Called the "Typhoon," the machine holds 3,000 gumballs in an 18-in. "Lexan" polycarbonate globe, features a Beaver mechanism and is available in a wide variety of colors.

The "Typhoon" gumball machine was conceived by Dorfman and built by Claude Lemieux, Allstar's chief technician. A skilled mechanic, Lemieux got his start with Allstar repairing and modifying Steiner machines, which tended to scratch trading cards during a vend cycle.

CREATING A BRAND

In 1997, the company launched its sticker machine line. The round-top "Allstar Sticker Machines" are made in different configurations to meet a wide range of applications. The flat venders stand 29 ins. to 33 ins. high , about 60 ins. on a stand , and are available in four- or six-column formats, with a capacity of 210 per column. Also offered in the "Allstar Sticker Machine" line are two rack models: the "Fun Stand" supports one sticker machine and three bulk heads; and "The Combo" accommodates Allstar's six-column sticker vender, two Beaver Machine Corp.'s "Northern Beavers" and three "RB16s."

The latest addition to the Allstar family, the "Typhoon Capsule Machine," vends 2.3-in., 2.75-in. and 2.9-in capsules. The company began developing this innovative machine around 1998, shortly after the Canadian government introduced a new $2 coin, known as the toonie (or twoonie).

"The 'Typhoon Capsule Machine' was a big project for us," Dorfman said, "because we wanted to offer a device that capitalized on Canada's new $2 coin."

The giant capsule vender also presented two challenges: what types of product can be sold through a bulk vender for $2 and how to design a machine that can hold and dispense a large capacity of oversized capsules? Determining the class of item to be sold for the new machine presented the easier challenge. Beanies and key chain beanies were popular at the time, and remain so today.

Designing a reliable machine to vend the capsuled beanies, on the other hand, was not so simple. In Europe, where high-denomination coinage is common, large-capsule venders are prevalent, and Allstar looked into importing them. On closer examination, however, the company found the plastic European machines to be too fragile for the Canadian market.

"A plastic machine is not sturdy," Lemieux noted, "especially in the critical base area, where the weight of the machine and its product can put 80 lbs. of pressure on it. We prefer to use fiberglass'it's more expensive, but it's really strong stuff."

Before building a fiberglass production model, Lemieux assembled a "Typhoon Capsule Machine" prototype constructed of wood and plastic and employing Beaver components. He modified the Beaver hopper that holds the merchandise wheel. Other parts had to be adapted for the size and weight of new capsules and their contents. Beaver parts are still modified for production models.

"The most difficult part of the design was putting in the dispensing mechanism [merchandise wheel] and getting it to work properly," emphasized Lemieux, who spent eight months developing and testing the design.

Special attention also was given to the capsule machine's storage and display area. Allstar considered the 18-in. globe used for its spiral gumball machine, but it would not hold enough capsules for high-volume locations. Instead, the company developed a transparent bulk-loading cylinder capable of holding at least 200 large capsules. Vended capsules travel along a spiral track to the merchandise pickup door located at the machine's base.

The Canadian manufacturer specializes in custom graphics for all its machines, using the latest silk screening processes to add logotypes. This has made Allstar lines popular with some of the largest coin machine operations in North America, including Folz Vending (Oceanside, NY) and Sugarloaf (Boulder, CO), which recently awarded the company a contract. Dorfman claims that her company was the first to offer a sticker machine with a meter, which is included on all Sugarloaf machines and sold as an option to other customers.

Allstar also is expert in adapting equipment for international markets. Overseas customers send their nation's coins to Allstar, which in turn sends them to its coin mech supplier, ESD.

While Allstar was developing its own brand of bulk and flat vending machines, Dorfman continued to focus on positioning the company as a prominent product supplier. It began by distributing products for other manufacturers, first stickers and later beanies. Allstar's founder believed the best way to serve her machine customers was to provide them with product.

Allstar's first proprietary sticker series, "Dog Heads," rolled off the printing presses about six years ago, becoming an instant hit with young Canadian customers and spawning copycats by other sticker companies. The company also designs and manufactures temporary tattoos, 25ó mini stickers (for capsules) and beanies.

Dorfman applied for the license to produce and sell "Pok├©mon" stickers for flat vending machines in Canada without realizing the significance of the Nintendo property. "It was the best thing that ever happened," she recalled, "we shipped several million of them. It was the most powerful brand I've ever witnessed. If we sold millions in Canada, which has a smaller population than California, can you imagine how many sold in the U.S.?"

Allstar's "Pok├©mon" license expired on December 31, 2000, and was not renewed, as the brand had run its course. During the licensing period, the company produced three "Pok├©mon" series ,10 designs in the first, 50 in the second and 25 in the third , for a total of 85 unique sticker styles.

TRACK RECORD

A company is only as good as its last [good] sticker, Dorfman said. "It takes a lot longer to get to the top than to the bottom in this business. But that's true in any industry." The sticker expert thus pays close attention to trends and consumer preferences. "The Simpsons," a longtime Allstar sticker series, is popular in Canada. And in that country, where hockey is not unlike religion, NHL stickers outsell NFL and NBA merchandise combined. "When the Toronto Blue Jays won the World Series in 1992 and '93," she observed, "you would think MLB stickers would do well, but they didn't." Another incongruity she noticed is that tattoos sell very well year-round in Canada, where most operators dedicate one column to the medium.

"Someone once said to me," she recalled, "that once every 10 years a license like 'Pok├©mon' comes along and makes up for all the losing licenses."

In the meantime, Allstar, and the operators who vend its products, are finding success with its new sticker designs, which include "Winnie the Pooh Heads," "Project X," "Smiley Classics #2," "Road Signs" and "Mind Readers."

This spring, Allstar launched an all-out marketing initiative in the U.S. with the introduction of the "Xpressions" sticker series, along with several "Glitter" and "Colored" tattoo lines. Dorfman told V/T that Allstar's "non-violent" content has been particularly well received by American operators, who are concerned about the public image of vendible products, especially tattoos.

Allstar continues to represent sticker lines manufactured by other companies, including Sandylion's Disney stickers for which it is an official reseller in Canada and the U.S. She works closely with New York Sticker Exhange's Adam Ippolito, whom she met while he was working with Steiner.

Recognizing that cyclical nature of the flat merchandising distribution business, Dorfman saw the need for alternative revenue sources. Thus, Allstar provides equipment services to some of the nation's most prominent restaurant and retail chains. The company started its route operations about eight years ago, beginning with a pizza restaurant chain in Ontario. Dorfman's husband, Harold, joined the company to direct this business segment.

Allstar reports that its cordial relationship with the chain solidified its reputation as a dependable vendor offering a lucrative "other" income source. "Word spread, and other restaurant chains became interested in our operating program," Dorfman said, "so we decided to go national.

"Route operations are important," she added, "because if machine and product sales slow down, you have that additional revenue." She also uses the company's relationships with its chain accounts as a tool to assist other operators in securing similar accounts by providing letters of recommendation and earnings reports.

Today, Dorfman oversees Allstar's route managers who service equipment placed in locations from Vancouver to the Maritimes. She works directly with route personnel who handle Ontario, Quebec and the Maritimes. In the western provinces, Allstar employs one manager, who hires and supervises about a dozen routemen. This manager also prepares sales reports, relieving Dorfman of this burden.

Through its different facets , machine sales and design, product development, and even route operations , Dorfman's primary objective is to make Allstar's customers successful. She spends a good part of her workdays speaking with customers and often invites them to Montreal, taking them on the road for a firsthand look at operating and merchandising.


Topic: Vending Features

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