Vending

Texas operator survives pandemic setback with leasing, repairs and creative energy

While he admits the coronavirus is the biggest setback his business has faced to date, Chris Rodriguez is finding new ways to serve customers. He has expanded into machine leasing, has added personal protective equipment and is expanding his machine repair business.

Chris Rodriguez keeps busy building his vending repair shop.

August 5, 2020 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

The COVID-19 pandemic has devastated his convenience services business, but you wouldn't know it from talking to Chris Rodriguez. His business, Del Norte Snacks in El Paso, Texas, has had more than 90% of its locations close since mid-March, but the 44-year-old speaks with an air of optimism as he prepares for the post-pandemic era.

One reason is that COVID-19 isn't his first go-around with adversity in convenience services.

"We've been through 9/11 and 2008," Rodriguez told Vending Times with a smile.

Another reason is Rodriguez has always looked for new and better ways to serve his customers, most of which are worksites with 50 to 100 people, and he's always been able to find ways to serve these accounts profitably.

While he admits the coronavirus is the biggest setback his business has faced to date, he's finding new ways to serve customers. He has expanded into machine leasing, has added personal protective equipment, which is in high demand, and is expanding his machine repair business.

Chris Rodriguez used a mobile app based ordering system and wooden display shelves when he encountered requests for a micro market.

Earlier challenges proved instructive

It wasn't that long ago when Rodriguez had to find a way to meet customer demands for equipment that he did not think made sense from an ROI perspective.

In early 2017 some of his customers wanted him to install new vending machines or a micro market. The ROI for new equipment wasn't promising in Rodriguez's mind since the locations had 50 to 100 people, but competitors were making generous offers to win these accounts.

He came across Turner Logic SnackDot for Micro Markets, a mobile app based ordering system that allows an operator to provide a micro market using a mobile app and a mounted tablet rather than a self checkout kiosk.

He told his customers he would replace his vending machines with micro markets. But instead of a traditional micro market with a payment kiosk, he introduced a micro market where the customer picks products from wooden display shelves and pays using a payment app.

The customers could preload their accounts using their credit cards, then enter the purchase information on their smart phone. A screen on the app lists the prices that correspond with five colors displayed on products in the market. He also placed a mounted iPad tablet that runs the SnackDot app for employees that don't have smart phones.

The SnackDot micro market proved a winner for Rodriguez, as he was able to convert 25 customers from snack and soda machines to the SnackDot micro market.

The SnackDot system also proved an economically good investment, as it allowed Rodriguez to grow the business with less debt to service than vending machines.

Next expansion: machine leasing

The vending machines he replaced with the SnackDot system have recently proved helpful in his latest venture, machine leasing. He had several machines sitting in a warehouse from customers he converted to the SnackDot service.

He first dipped his toes in equipment leasing late last year, but he has since been spending more time with it due to the coronavirus.

Rodriguez advertised leased vending machines on Craigslist for $75 to $100 a month. He got five customers in his first month, including gyms and a dance studio.

"They were selling snacks and sodas at the counter," he said. These business owners realized the machine would free up an employee from dealing with the sales and at the same time help prevent pilferage. "This has enhanced their ability to run their business, and they don't have to dish out $4,000 or $5,000 for equipment."

He offers to deliver product to his lease customers for a fee, but most choose to service their own machines. When his accounts do reopen, Rodriguez will convert some of his vending accounts to machine lease accounts.

Next on the list: PPE products

Personal protective equipment is another recent expansion.

"Now we are getting calls because people are into the PPEs," he said, referring to personal protective equipment. "There are going to be some factories and public places that are going to be needing this type of vending equipment. To put out new equipment like this is going to be too costly for some people."

So far, he has placed four PPE machines — four-column glassfront snack machines — on a lease basis.

Like other vending operators who have expanded into PPE vending in response to COVID-19, Rodriguez has struggled to find reliable PPE product suppliers. Those lease customers who are using the machines for PPE have been protective of their sources and are reluctant to share their information.

Rodriguez also wants to market leased machines to new vending operators, which he has advertised on Craigslist and Facebook.

"They're trying to do something new," he said.

Future growth: machine repairs

He has also been using the downtime to build an equipment repair shop next to his home.

"It's given me time to work on the shop," he said for the coronavirus. "It's giving me time to do things I wouldn't be able to do if I had a regular work schedule. I'm working on things I would have planned on working on in 10 years."

It took three years to recover from the Great Recession, and Rodriguez thinks the pandemic could be as slow a recovery.

The family of five has mainly been living on savings and income from some multi-family buildings they invested in.

Rodriguez was able to get a $10,000 the Economic Injury Disaster Loan from the Small Business Administration. He did not find it worthwhile to apply for a Payroll Protection Plan loan since the loan, while potentially forgivable, was restricted in what it covered and in duration.

Long-term, he'd like to see some of his kids — 24, 15 and seven years old — get involved in the business.

For an update on how the coronavirus has affected convenience services, click here.

Photos courtesy of Del Norte Snacks.

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