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Is It Time To Push The Envelope In Bulk Vending?

Posted On: 9/23/2011

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Pushing the envelope is a well-known aviation expression. It refers to testing the limitations of an aircraft's capabilities or "flight envelope" of altitude, speed and load. In other words, inside the envelope you're safe while pushing the envelope is risky. Flying outside the envelope is even more risky, if not foolhardy.

The technical term was popularized in Tom Wolfe's 1979 book, "The Right Stuff" and the subsequent movie. The pilots and astronauts story really pushed the envelopes. Suddenly office supplies seemed glamorous. So who could blame businesspeople for adopting the phrase? "We're really pushing the accounting envelope," sounds cool, maybe even dangerous when accountants say it around tax time.

There are even bulk vending operators pushing the envelope. They have chosen not to participate in the game of stealing locations and waiting for another operator to steal them again. This is more prevalent in large chain accounts, but it is also common in profitable mom and pop locations. As one longtime operator recently told me, "We're just trading locations most of the time."

Those who are pushing the envelope in bulk vending are seeking new types of account. While not entirely abandoning the common wisdom of the industry, they are taking calculated risks with new categories of venues. In the vast majority of cases, these are small operators trying such new location types as bookstores, flea markets and venues catering to booth rentals for specialty items and crafts.

Are they profitable? It depends on the operator and the location. But the larger point is the calculated risk. Never before has there been a wider selection of equipment, merchandise or potential price points in bulk vending. It only makes sense that the number and types of potentially profitable locations could expand accordingly.

However, it seems that this expansion, according to a strictly unscientific poll, hasn't taken place, or it progressing very slowly. Why aren't operators pushing the envelope? For one reason, there is risk involved. Even a calculated risk is still a gamble. In many cases, expansion into new types of locations requires new equipment and merchandise. I would also venture to guess that there is a time factor at play. Acquiring and setting up locations takes time and energy, commodities that are in short supply for most operators.

Then there is the difficulty of how to calculate the risk. Obviously, a large rack with more merchandise represents greater risk than a single or double-head installation. Likewise, the purchase of new equipment is a larger risk than pulling used equipment from the warehouse. There is also the uncertainty of geography. A location closer to home is less expensive and more convenient to service.

Even given these risks, it's worth noting that those brave test pilots who pushed the envelope were responsible for some major contributions to aviation. They took calculated risks that paid off. Obviously the stakes are different in business than test piloting, but the basic ideas are the same. It is also worth noting that some of the biggest and most successful companies in high-tech are in the midst of taking calculated risks. Even a quick scan of the business pages reveals deal after deal in the tech sector. They are betting on the future by laying the groundwork for new markets and products far into the future. They are pushing the envelope.