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Issue Date: Vol. 50, No. 12, December 2010, Posted On: 12/26/2010


Raise Your Half-Full Glass


Alicia Lavay
Alicia@vendingtimes.net
vending, vending machine business, vending census of the industry, vending industry statistics, pool table, coin machine business, coin-op news, vending news, Vending Times, Alicia Lavay, Half-Full Glass

The VENDING TIMES 2010 Census of the Industry should have landed in your mailbox in mid-November. Given current market conditions, the contraction in sales volume across all the major categories of our industry won't have shocked any of our readers. When unemployment rises, workplace populations decline and volume shrinks. And people who are out of work and worried about making the next mortgage payment are less likely to frequent locations offering coin-operated amusement and music equipment.

However, at least one pool table manufacturer I've spoken with sees the decline in equipment on location as an opportunity. If, in fact, there are fewer machines on location, this may be a healthy sign, suggesting that operators are dropping accounts that are no longer profitable and concentrating on those in which they can make enough money to survive. Or it also might indicate that certain types of equipment, most likely full-size hot beverage machines, are being replaced by smaller semi-vending types more commonly thought of as pertaining to coffee service.

In games, as in vending, the primary question is whether the number of eligible locations really is shrinking. But an important secondary question is whether operators are losing potential business because eligible locations are attempting to run their own equipment.

This, of course, is not a new problem. On the long view, it only has become a problem at all after the emergence of a distinct operating industry, in the middle third of the 20th century. Prior to that, in nearly all cases, if you ran a saloon and you wanted a player piano or a Wurlitzer band organ or a nickelodeon, you bought it yourself, and relied on the fellow who sold it to you for answers to technical questions that you could not figure out on your own. The apparatus had a high price, but you got to keep all the money.

However, there were compelling reasons for the emergence of an operating segment. Look, for example, at a pool table from the perspective of the patron. Pool tables, even very durable and well-made ones, need to be leveled accurately when installed, and require periodic maintenance: felt gets ripped, the bumpers get all banged up and grungy, the cue tips fall off, the chalk wears down, and so forth. The patron is less and less likely to risk money in the piece as it deteriorates.

While a capable saloon-keeper probably can dope out leg-levelers, and would not have a lot of trouble figuring out how to replace the rails or re-cover the slate, he has many other things to worry about -- and, having paid a lot for the piece, he probably is very reluctant to go out and spend even more on replacement parts and supplies. Forward-thinking and energetic operators long have known that their sales proposals are not primarily about the commission; if the account buys its own equipment, all the revenue it generates is commission. The value proposition includes: (1) "You know how to run a tavern that will attract and retain customers"; (2) "You do not know how, or you do not have the time, to keep a pool table fully functional, attractive and accompanied by the supplies players need;" but (3) "We know how to maintain a pool table that will attract and retain patrons"; so (4) "by pooling our skills, you will get more people in here, and they will buy drinks as well as playing the pool table"; and (5) "not only do you save the very substantial expense of acquiring the table, but you get half the revenue it generates, in addition to the profit from all the additional sales you'll make if more people come and stay longer -- all at no cost to you, and with the certain knowledge that you can toss me out on my ear if you ever decide I'm not doing a good job."

And operator-administered leagues, with a schedule of tournaments, offer strong reinforcement to that proposition.

For this reason, I think that this positive-thinking manufacturer may be right. If there are a lot of viable pool table locations that either are trying to run their own games, or don't have any games at all, then he should be able to assist operators in identifying these places and going after them with a compelling sales pitch. It certainly worked for the pioneer coin-op pool table manufacturers four decades ago.

Similarly, in vending, innovative operators find ways to increase route efficiency by rationalizing machine service schedules, streamlining inventory throughout, widening payment options for their customers and developing new ways to serve a broader base of clients. The location certainly can buy a vending machine if it wants one; but more now than ever, businesses know that they must devote their full attention to their primary task. Vending and coffee service are essential catalysts of workplace productivity, and will emerge stronger than ever when recovery sets in. So, when we raise our glasses this holiday season, I encourage all of us to look at those glasses as "half full."


Topic: Upfront with the Publisher

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