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Issue Date: Vol. 50, No. 10, October 2010, Posted On: 10/23/2010

Looking For Strategies In An Industry No Longer Idiot-Proof

Hank Schlesinger
bulk vending, vending, vending machine, vending machine business, vending machine operator, idiot-proof business, Hank Schlesinger, Vending Times, bulk vending editorial, coin-op, idiot-proof

An industry veteran recently said to me: "bulk vending is no longer idiot-proof." He explained ways in which virtually anyone with a pulse and a little motivation could not only succeed, but also prosper to an unreasonable degree back in the not-too-distant past. Those were the good old days, he claimed. The problem today, as he sees it, is too much competition in a market with too many product categories, equipment choices, price points and location types. Without anyone noticing, this small vending industry niche has evolved into a business that requires thought. Gracious! Bulk vending is no longer idiot proof.

Of course, those crazy kids have a meme for what he was describing. They call it "the new normal." They use the phrase to describe unpleasantness, such as a downgrade in lifestyle or bothersome inconvenience. So yes, the term probably fits in this case. After all, thinking is an inconvenience for some people. And the new normal for bulk vending is more complex.

But what isn't more complex these days? Thirty years ago consumers had exactly one choice when it came to phone service, take it or leave it -- Ma Bell or nothing. And many people, if they were lucky, had only a half dozen television stations. Going further back in history, Henry Ford's Model T came in one color: black -- take it or leave it, Ford didn't much care either way. Because black was the color that dried quickest, it kept the assembly lines humming along to meet demand.  

Few industries today offer "single option, take it or leave it" products. Those that stuck to their single product guns seem to have been done in by competition offering greater variety. This is good news for consumers, but a lot more work for suppliers. In fact, I'm hard pressed to think of a one-product company for either the upscale or down-market consumer. This is a huge paradigm shift that continues to strain the ingenuity of even the largest companies.

One of the most difficult tasks facing even the smallest vending operator just may be overcoming the time-honored business model that made the bulk industry idiot-proof. In those distant halcyon days, an operator could afford to think and act like a small businessman. A careful eye on the ledger books and a strategy based on endless repetition was enough to see him through good times and bad.

Today, that same operator still has to keep a close eye on the books, but he or she can no longer risk thoughtless repetition. In this regard, they have to think like a corporate chief executive. To put this in perspective, even small to midsize operators with fewer than 200 locations typically cater to a more diverse customer base than do large retail chains. Two locations, separated by only a few miles, may require entirely different merchandise mixes. On top of this challenge are the demands for inventory, location relations and an ever-expanding choice of equipment configurations. This is certainly not a task anyone could reasonably call idiot-proof.

Being something of a closet optimist, however, I tend to think there are enough people in the bulk vending industry up to the challenge.

Topic: Editorial: Music and Games

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